Spain Approves New Housing Rules, but a Friday Vote Could Undo Them

Spain’s Council of Ministers approved two royal decree-laws on Tuesday, extending a ban on evicting vulnerable tenants to 31 December 2030, capping annual rent increases at 2%, restricting purchases of housing bought below 70% of its appraised value by so-called “vulture funds” until the end of 2028, and adding a two-year extension for expiring leases. The package followed a week of nationwide protests after the forced eviction of 87-year-old Madrid tenant María del Carmen “Maricarmen” Abascal, a case that put Spain’s housing crisis — and the investors buying into it — back at the centre of national politics. Under Spanish law, a decree-law like this one takes legal effect immediately on approval, but it only survives if Congress “validates” it within 30 days — and that vote is scheduled for this Friday, 2 October, with the outcome genuinely uncertain.

The Vote That Decides What Survives

This is not the government’s first attempt at these measures. An almost identical package — the same two-year lease extension and 2% rent cap — was approved by decree on 22 March 2026, took legal effect immediately, and then failed its Congress validation vote on 28 April, when the conservative People’s Party, the far-right Vox and the Catalan pro-independence party Junts per Catalunya voted it down. Those measures lapsed after barely five weeks in force. Prime Minister Pedro Sánchez’s minority government is now repeating the same manoeuvre with a larger package, needing the same parliamentary arithmetic it failed to secure five months ago.

To improve its odds this time, the government split the package in two. The main decree — covering the eviction ban, rent cap, lease extension and vulture-fund restriction — was negotiated with the wider group of parties that backed Sánchez’s investiture, and Spanish real-estate press regards it as the more likely of the two to pass. A second, separate decree pushed by coalition partner Sumar — automatic, indefinite lease renewal after five years unless a landlord shows cause — was deliberately kept out of the main package because Junts per Catalunya and the Basque Nationalist Party, both needed for validation, oppose it as tantamount to expropriation. Junts has called the decree “worrying” without saying how it will vote; even Podemos, a government ally, has criticised splitting the package as a “trick.” Congress votes on both decrees on Friday.

The vulture-fund provision matters specifically to institutional and international capital active in the Spanish market. As written, it bars entities that acquire housing at less than 70% of its appraised value from buying property — and whole buildings — until the end of 2028, unless the housing goes to social rental. Spain’s listed REIT-equivalent vehicles, known as SOCIMIs, also face a tax reorientation intended to push their investment toward affordable housing rather than what the government calls speculative buying. Housing Minister Isabel Rodríguez used the case of Abascal’s landlord — a small company called Urbagestión that rejects the “vulture fund” label — to argue the rules target predatory buying behaviour rather than any one type of investor, a distinction that will matter for how narrowly or broadly the eventual law is enforced.

Zagdim’s View — What foreign and institutional buyers in Spain should be watching this week is not the headline measures themselves but Friday’s validation vote, because Spain has already shown once this year, in March and April, that a decree like this one can take legal effect and then collapse five weeks later. Until Congress votes, the safer planning assumption for anyone active in the Spanish rental or acquisition market is that today’s rules are provisional rather than settled — the direction of travel toward tighter controls on distressed-asset buying and rent increases is clear, but whether this specific version becomes durable law is not yet decided.