Spain’s Congress rejected both emergency housing decrees Prime Minister Pedro Sánchez’s government had put into force a week earlier, voting 178-172 against the main tenant-protection measure and 184-166 against a second decree on lease renewals — a defeat that erased the rent cap, eviction suspension and investment-fund restrictions this outlet reported on October 1, and that has since drawn tens of thousands of protesters into the streets of some 50 Spanish cities.
What the Rejected Decrees Would Have Done
The two measures, Real Decreto-ley 26/2026 and Real Decreto-ley 27/2026, had been in force since September 30 but required parliamentary confirmation within 30 days to stay law. The first decree capped annual rent increases on existing contracts at 2% through December 31, 2027, suspended evictions of vulnerable households without alternative housing through December 31, 2030, barred investment funds from buying residential property below 70% of its appraised value through 2028, added a 10% VAT charge on tourist rentals that had previously been VAT-exempt, and offered a state-backed 0%-interest loan of up to 20% of a property’s price (capped at €50,000) to first-time buyers, according to idealista.com. The second decree would have made expiring lease contracts automatically renew unless the landlord compensated the tenant with 12 months’ rent to end the tenancy.
Both failed. It was the government’s second attempt at this package: an earlier version was voted down by the same three parties — the Popular Party, Vox and the Catalan separatist party Junts — on April 28, 2026, according to idealista.com.
Why Junts Voted No — and What Happens to Sánchez Now
Junts’ votes were decisive both times, and its objection cut in two directions at once. Junts spokesperson Miriam Nogueras argued the decrees would “only lead to owners removing their properties from the rental market, and thus driving up prices” — the standard landlord-supply argument also made by Catalan business groups such as Foment and Pimec, which had lobbied Junts against the bill. But Nogueras also said “these decrees still allow speculators to buy property and evict people,” arguing the rules were simultaneously too harsh on small owners and too porous for the institutional funds they were meant to target, according to Al Jazeera. Housing Minister Isabel Rodríguez framed the stakes differently, telling lawmakers before the vote: “With this vote, we are deciding whether we do not want another eviction or are willing to face the next one.” Sánchez himself warned Congress to “do the right thing or history will judge you sooner than you think and more harshly than you can imagine,” per Euronews.
The defeat is now a question about Sánchez’s own government, not just housing policy. Moncloa sources say he will use the days immediately following the vote to decide whether to call a snap election — November 29 is the earliest date permitted under Spanish electoral law — and PSOE figures reportedly view an early vote as increasingly likely, though Sánchez’s office says no decision has been made, according to Spain-focused reporting on the aftermath (The Olive Press).
What Changes for Tenants, Landlords and Foreign Buyers
With both decrees void, the legal landscape reverts to what existed before September 30: there is no national 2% rent-rise cap on existing contracts, no blanket eviction suspension for vulnerable tenants beyond what ordinary law already provides, no automatic lease-renewal-or-pay rule, and no 70%-of-appraised-value floor stopping investment funds from buying distressed housing stock at a discount — the restriction this outlet flagged on October 1 as targeting institutional and foreign capital active in the Spanish market. Landlords who had expected tax incentives for voluntarily lowering rent in non-“stressed” markets lose that incentive too, and the proposed 0%-financing scheme for first-time buyers does not go ahead.
For individual foreign buyers specifically, nothing changes this week either way. The much-discussed proposal to impose a tax of “up to 100%” on property purchases by non-EU, non-resident buyers — announced by Sánchez in January 2025 — was never part of either decree rejected on October 2. That bill was submitted to Congress in June 2025 and has not been formally debated or voted on since, according to idealista.com’s reporting at the time. Friday’s vote leaves that separate, stalled proposal exactly where it was: ordinary purchase rules — transfer tax or VAT, notarial deed, anti-money-laundering checks and Land Registry inscription — continue to apply to non-EU buyers as before.
The Protests, and What’s Not Settled
Demonstrations followed through the weekend of October 3-4 in roughly 50 cities. Madrid turnout estimates ranged from 70,000, per government figures, to 500,000, per the city’s Tenants’ Union — a gap both figures were reported alongside rather than resolved, per UPI. In Valencia, protesters clashed with police, removing barriers and throwing objects; officers responded with rubber bullets, and Spanish public broadcaster RTVE reported nine officers injured and five arrests. “There is a lot of anger in the streets,” a Valencia Tenants’ Union spokesperson told the BBC.
The protests trace directly to the September 23 eviction of 87-year-old María del Carmen Abascal — “Maricarmen” — from the Madrid apartment she had lived in for seven decades. Police removed her on a stretcher; the company that owns the building later agreed to let her return once she is discharged from hospital. “I haven’t managed to defend my home, but I have fought so that others can learn to fight for what’s theirs,” Abascal said, according to AP. Her eviction drew encampments in Madrid’s Puerta del Sol and in Barcelona and put the government under pressure to legislate in the first place — the pressure that produced the two decrees Congress has now rejected.
Zagdim’s View — The vote changes less for international property buyers than the headlines suggest: the rules that would have mattered most to them — the fund-purchase floor and the stalled non-EU buyer surtax — are either dead with the decree or were never part of it. What actually moves is the tenant side: the protections that existed for five days last week are gone, Spain is back to pre-September 30 law, and whether anything replaces them now depends on a political fight over an early election that has nothing to do with housing mechanics.
References
Al Jazeera – Spain’s Parliament Rejects Gov’t Housing Decrees Amid Mass Protests / Euronews – Spanish Congress Rejects Housing Laws Despite Sánchez’s Warning They’ll Be Judged Sooner Than They Think / Associated Press via WRAL – What to Know About Spain’s Housing Protests Sparked by the Eviction of the 87-Year-Old Maricarmen / idealista.com – Spain Rejects Housing Measures: Impact on Renters and Tourists / idealista.com – Draft Bill to Double Property Prices for Non-EU Buyers / UPI – Tens of Thousands in Spain Take to Streets to Protest Housing Crisis / The Olive Press – Spain’s Prime Minister Pedro Sánchez “Taking Time to Consider Snap Elections” After Losing Housing Vote
