Three days in force
The Government's housing decrees barely came into effect. Royal Decree-Law 26/2026, published in the Official Gazette on 30 September, and Royal Decree-Law 27/2026, dated 1 October, were rejected on Friday 2 in Congress.
The first, the more comprehensive, failed with 178 votes against—from PP, Vox, Junts and UPN—against 172 in favour, from PSOE, Sumar, ERC, Bildu, PNV, Podemos, BNG, Coalición Canaria and Compromís. "Consequently, the decree-law is repealed," announced the president of Congress, Francina Armengol. The second, on contract renewal, was rejected with votes from PP, Vox, Junts, PNV, UPN and Coalición Canaria.
The vote coincided with a wave of mobilisations called by the Tenants' Union in more than 50 cities, with some 70,000 demonstrators in Madrid according to the Government Delegation.
Rent: no cap and no extension
For tenants in Marina Alta, the most immediate change is in rent. The first decree capped annual rent increases at 2% until the end of 2027 and granted a two-year extension to contracts expiring before 31 December 2028. It also included tax relief in personal income tax for tenants earning up to €33,000, which the Government calculated would reach 1.6 million households across Spain.
The second decree went further: it required landlords to pay tenants 12 months' rent as compensation if they did not renew the contract for another five years without justified cause, or seven months if the landlord was a company, and set a six-month notice period.
With the decrees' repeal, that protection disappears. The 2023 Housing Law allows rent limits in areas declared tight, but there are none in Marina Alta. The Dénia Town Council has asked the Regional Ministry several times to declare the city a tight housing zone and, according to the councillor for Territory, Maria Josep Ripoll, has never received a reply.
Market pressure is no lighter. In Xàbia, rent reached €16.62 per square metre per month in the first quarter of the year, according to Fotocasa, the highest figure in the region.
Tourist flats: no VAT and no IBI surcharge
The first decree introduced 10% VAT on tourist rentals. It also enabled councils to apply surcharges of up to 150% on the property tax (IBI) for tourist flats and up to 100% on vacant housing.
It is one of the measures with most potential impact in the region. In Dénia alone, the Tourism Register of the Valencian Community counted 5,129 licensed tourist residential properties in August. With the repeal, tourist rentals no longer bear that VAT and councils lose the surcharge tool.
The other side: relief for landlords and the tourism sector
The decrees' fall reads very differently for much of the region's economy. In Marina Alta, tourist rentals and second homes are a pillar of the tourism model: in Dénia, almost nine out of ten tourist places are in homes, some 25,000 compared with just over 2,400 in hotels.
For that sector, repeal means avoiding an immediate rise in costs. Tourist supply no longer bears the 10% VAT that the decree introduced, which would have raised prices for guests or cut landlords' margins. Councils will also be unable to apply the up-to-150% surcharge on property tax for tourist flats.
Second-home owners, very numerous in the region, also escape a planned increase in personal income tax on non-primary residences from 2027 onwards. And small landlords who rent out a home recover room to negotiate rent and contract length.
Those who voted against argue moreover that the measures would have been counterproductive. Junts argued that many would have resulted in less supply, higher prices and greater difficulties of access, the opposite of what they intended. The 2% cap disappearing also does not mean rents will automatically rise.
Evictions and bulk buyers
The decree suspended evictions of vulnerable people until 31 December 2030, a measure Congress had already defeated in February. It also banned, until the end of 2028, entities dedicated to buying properties or mortgage portfolios from doing so below 70% of their valuation.
On the fiscal front, it taxed undistributed profits of socimis, listed property companies, at 25%, and reduced VAT on public housing to 4%.
Why they voted against
Junts, whose seven votes were decisive, argued moreover that the text does not stop vulture funds, that protection for vulnerable tenants is not guaranteed, and that several measures amount to "decree expropriation of three generations' savings". It asked the Government to draft a new decree. PP and Vox voted against both texts.
The Housing Minister, Isabel Rodríguez, had asked the opposition, especially Junts, to abstain to allow the decrees to be convalidated.
And now, what
The decrees' fall leaves open the possibility of an early election. The President of the Government, Pedro Sánchez, has opened a period of reflection to decide whether to call elections before 2027. Junts, meanwhile, has announced it will send the Government an alternative proposal.
In the region, the repeal leaves two conflicting realities. For the tourism sector and landlords, it is fiscal relief in an economy heavily dependent on visitors. For those seeking somewhere to live, the problem remains intact: buying a home in Xàbia now requires 69% of a typical household's disposable income, the highest effort on the entire eastern coast, and in Dénia protected housing for sale is approaching €260,000.
