The Royal Decree-Laws 26/2026 and 27/2026, published this week and which introduced significant changes regarding housing, residential rental, temporary rental, taxation, and tourist housing, have not passed their validation in the Congress of Deputies.
The outcome completely changes the scenario we were analyzing just a few hours earlier.
A royal decree-law comes into effect upon publication but is provisional. The Constitution requires Congress to subsequently pronounce on its validation or repeal. When it does not obtain parliamentary validation, the regulation ceases to be maintained in the legal system.
In this case, there is also an unusual circumstance: the Royal Decree-Law 26/2026 was in effect since October 1 and the Royal Decree-Law 27/2026 since October 2. That is to say, they had an extraordinarily short legal life.
This necessitates differentiating two issues.
On one hand, the measures that were planned for the future cease to be consolidated.
On the other hand, the actions or legal situations that may have occurred during the hours or days when the decrees were in effect should not be automatically considered non-existent.
There is a clear precedent in housing matters: a royal decree-law can come into effect and then be rejected by Congress, thus nullifying the introduced modifications.
Therefore, beyond the voting result, it will be necessary to check the formal publication of the repeal agreement and, in specific cases that occurred during this very brief period of validity, analyze the situation individually.
But for the future, the scenario is already much clearer.
One of the most significant changes was in the Royal Decree-Law 27/2026.
The regulation aimed for, once the initial minimum period of a rental contract was exceeded, if the parties did not communicate its termination, the contract would be extended for successive complete periods of five years when the owner was a natural person and seven years when it was a legal entity.
It also raised the notice period required from the owner to six months and established, with certain exceptions, compensation for the tenant when it was the landlord who decided not to continue.
These measures are not consolidated.
Once the repeal is effective, the previous wording of the Urban Leasing Law becomes applicable again.
The previous system establishes a minimum period of five years for natural person owners and seven for legal entities and, subsequently, if neither party expresses their intention to terminate, annual extensions up to a maximum of three additional years.
The ordinary notice period for the owner returns to four months, and the new general compensation contemplated by RDL 27/2026 disappears.
The owner regains greater predictability regarding when they can regain possession of the property.
This reduces one of the new risks we analyzed earlier: that entering residential rental would imply assuming a potentially much longer commitment and a high cost to later recover the property.
In theory, greater flexibility may make it more attractive to keep certain properties in regular rental, as it decreases the economic cost associated with a future exit.
But it is also not advisable to automatically conclude that the supply will increase.
The regulatory package that is now disappearing also contained significant tax incentives for owners who kept their properties in residential rental.
Therefore, a restriction and an incentive disappear simultaneously.
The net result will again depend on the profitability that each owner finds in the different alternatives.
The Royal Decree-Law 26/2026 also introduced new limitations on the updating of certain rents until the end of 2027.
With the repeal, that extraordinary regime will no longer apply.
Updates will revert to being carried out according to the regime applicable to each contract and the current general legislation, without the new specific limit created by this Royal Decree-Law.
From the market perspective, this eliminates a new restriction on the evolution of existing rents.
For owners, it means maintaining a greater ability to adjust rents within the limits already established by previous legislation.
For tenants, the additional protection that this regulation incorporated disappears.
The possible effect on future prices will continue to depend fundamentally on the relationship between supply and demand.
The Royal Decree-Law 26/2026 aimed to establish a much more detailed regulation of temporary rental.
To use this modality, there had to be a real and verifiable temporary cause, generally lasting between 31 days and twelve months.
The purpose was to clearly differentiate between a genuine temporary displacement and a lease that, due to its real characteristics, should be considered a regular residence.
Since the decree is not consolidated, that new specific state regulation disappears.
This does not mean that temporary rental is left without regulation.
The Urban Leasing Law, the Civil Code, and the other applicable state, regional, and municipal regulations continue to apply.
But the new additional framework that aimed to considerably restrict the use of this modality disappears.
Seasonal rental retains one of its main advantages over residential rental: greater contractual flexibility when there is a genuine temporary use.
Therefore, one of the movements that the new regulation could have provoked —the return of some properties from temporary rental to residential— loses strength.
This may mean that part of the supply currently operating under temporary contracts continues to do so.
From the perspective of regular rental, it has a dual reading: a measure that could have forced some properties to return to the residential market is eliminated, but other restrictions that could have caused owners to abandon that market directly also disappear.
The final result is not, therefore, automatic.
The decree established another relevant modification.
The sum of the rents obtained by individually renting the rooms of a property could not exceed the price corresponding to the full rental of that same property.
This limitation is also not consolidated.
Therefore, room rental will continue to be subject to the previous legal framework and will not have the new economic limit provided by RDL 26/2026.
For certain owners and investors, this maintains the economic appeal of this modality compared to traditional rental of the entire property.
And this may continue to influence the distribution of supply between complete residential rental and room rental.
One of the peculiarities of RDL 26/2026 was that it combined restrictions with incentives.
Very high reductions in personal income tax on the net income from residential rental were planned, reaching in certain cases up to 100%, along with reductions of 95%, 90%, 85%, 80%, or 70% depending on the circumstances.
A new state deduction for certain tenants was also contemplated.
These modifications are not consolidated with the repeal of the Royal Decree-Law.
Therefore, owners and tenants will continue to be subject to the existing tax regime prior to the approval of the package.
This point is important for analyzing the market.
The repeal reduces the contractual rigidity introduced by the decrees, but it also eliminates part of the economic compensation designed precisely to keep properties within regular rental.
An owner regains greater flexibility, but will no longer have those new tax advantages to choose residential rental over other alternatives.
For the vacation rental market, this is probably the most immediate economic consequence.
The Royal Decree-Law 26/2026 modified the VAT Law with effects expected from December 1, 2026.
The reform established that rentals of furnished apartments or homes for 30 nights or less would no longer be exempt from VAT even if no services typical of the hotel industry were provided, except for certain exceptions related to the owner's regular residence.
Those operations would be subject to the reduced rate of 10%.
Since the measure had not even reached its expected effective date, the repeal prevents it from being consolidated.
The previous system remains.
The rental of a home is, in general, exempt from VAT when no complementary services typical of the hotel industry are provided.
When hospitality services are provided —for example, certain periodic cleaning, catering, or hotel attention services— the tax situation is different and may be subject to the tax.
The previous legislation does not automatically convert a short tourist stay into an operation subject to the 10% simply because it lasts less than 30 nights.
For a significant portion of VUT owners, this is a considerable economic difference.
In the previous analysis, we raised two possible effects of the new VAT.
The owner could pass that 10% onto the guest through higher prices or absorb part of the tax by reducing their margin.
That new factor disappears.
Therefore, an additional pressure on the final prices of tourist stays is eliminated that would have begun on December 1.
This does not mean that vacation accommodation prices will drop.
They will continue to depend on demand, season, occupancy, competition, operating costs, and local regulation.
What disappears is a specific cause of cost increase that could have led many owners to revise their rates.
The RDL 26/2026 allowed certain municipalities located in areas of strained residential markets to establish specific surcharges on the IBI of properties intended for tourist accommodation.
The increase could reach 50%, 100% for certain owners with multiple properties, and up to 150% in certain cases with larger portfolios.
This new possibility is also not consolidated.
Municipalities will continue to have the fiscal powers they already had previously, but the new specific surcharge introduced by this Royal Decree-Law for tourist housing disappears.
For owners and managers of multiple VUT, this avoids a new potential increase in the annual fixed operating cost.
And, as with VAT, it reduces the immediate pressure to pass on new costs to the price of stays.
The combination of both measures would have introduced a significant change in the economics of many accommodations.
On one hand, a possible 10% VAT on short stays.
On the other, potential IBI surcharges.
Their disappearance means that tourist rental will not face, due to these two decrees, the increase in costs we analyzed earlier.
This can have several consequences.
Accommodations with reduced margins will have less pressure to exit the activity.
Owners will have less need to raise prices solely to compensate for these new taxes.
And it decreases one of the economic incentives that could have caused certain tourist properties to return to residential rental.
Therefore, the repeal may favor the continuity of part of the current tourist supply.
It is important to differentiate both things.
The repeal of these decrees does not mean that tourist housing is deregulated.
Regional and municipal regulations, urban planning regulations, registration and marketing obligations, community rules, and all other existing obligations prior to this remain fully in force.
The only thing that disappears are the additional modifications specifically introduced by RDL 26/2026 and 27/2026.
For owners, therefore, the need to check which specific regulations apply in their autonomous community and municipality does not change.
The Royal Decree-Law 26/2026 also included the TU CASA program, aimed at facilitating the acquisition of a first home.
The mechanism would allow complementing a private mortgage with public financing of up to the lesser amount between 20% of the property's value and 50,000 euros, at an interest rate of 0%.
This measure will also not be consolidated through this Royal Decree-Law.
From the perspective of the buying and selling market, therefore, a new potential source of demand disappears.
In the previous analysis, we pointed out that this aid could allow access to purchase for households that currently did not have the necessary savings for the down payment, but that, if the supply remained limited, part of that increase in purchasing power could end up reflecting in prices.
That potential effect also disappears along with the measure.
The package established temporary limits on certain acquisitions of properties by companies whose activity included the purchase of real estate when the price was below 70% of its appraised value.
The repeal also eliminates that additional restriction.
Therefore, that segment of the market will continue to operate under the previous rules.
This maintains greater freedom to carry out operations on assets with significant discounts, although it also means that one of the mechanisms intended to modify who could acquire certain properties disappears.
It can influence, but there is no single answer.
From the owner's perspective, some of the measures that increased the rigidity of regular rental disappear:
there will be no new successive extensions of five or seven years;
the new general compensation for non-renewal disappears;
the new extraordinary limit introduced by the package disappears;
and temporary rental maintains greater flexibility.
This could reduce the incentive for some owners to withdraw their properties from regular rental or sell them.
But at the same time, the new tax reductions designed precisely to make that residential rental more attractive disappear.
Existing alternatives remain: temporary rental, rooms, sale, and, when legally possible, tourist rental.
Therefore, the effect on supply will likely differ depending on each market.
The disappearance of the new limits provides greater adjustment capacity to the contracts that remain subject to the previous regime.
But the fundamental factor will remain the same: the relationship between the number of available homes and the number of people who want to rent them.
If residential supply increases more rapidly than demand, pressure on prices may decrease.
If supply continues to be insufficient, prices will continue to face upward pressure even if regulations disappear or are introduced.
Therefore, the repeal changes the incentives, but does not alone modify the structural variables of the market.
Here the consequences are somewhat easier to identify.
Two costs that could directly affect profitability —the new generalized VAT on many short stays and the new specific IBI surcharges— will not be consolidated through these decrees.
This reduces the immediate risk of cost increases for owners.
It also decreases the possibility that some marginally profitable accommodations will exit the activity solely due to these new obligations.
And, if the tourist supply remains higher than it would have been with the new burdens, competition among accommodations will also be greater.
In purely economic terms, this eliminates one of the pressures that could favor price increases in tourist accommodation.
Not all the package acted on contracts and taxes.
The RDL 26/2026 also contemplated a line of up to 2 billion euros in guarantees aimed at financing actions related to social and affordable housing.
It also included other measures aimed at increasing the residential stock.
These initiatives will not continue through the rejected decree either.
Therefore, restrictive measures and measures aimed at increasing supply disappear simultaneously.
This again demonstrates why it is too simplistic to interpret any regulatory modification solely as favorable or detrimental to housing prices.
Each measure acts on a different part of the market.
This is probably the simplest way to understand what happened.
For just a few hours, the possibility of a profound modification of the functioning of Spanish rental was opened.
Potentially much longer contracts.
New compensations.
More regulation of temporary and room rentals.
New tax incentives.
Changes for buyers.
A new tax treatment for tourist housing.
And new instruments aimed at increasing supply.
With the parliamentary rejection, that new framework is not consolidated.
Once the repeal is formalized, legal relationships will again be governed by the legislation that was in force before these modifications, without prejudice to the specific effects that may have occurred during the very brief period in which the decrees had the force of law.
For the market, the fundamental question remains the same as we posed in our previous analysis.
What use is most attractive for each property?
Regular rental.
Temporary rental.
Room rental.
Tourist housing.
Sale.
Keeping it for personal use.
The now-rejected package simultaneously modified the costs, taxation, and flexibility of almost all those alternatives.
Its disappearance avoids that immediate change.
But it does not eliminate the competition between uses.
And as long as there are significant differences in profitability, risk, and flexibility between the different modalities, owners will continue to compare them before deciding where to place their properties.
In practical terms, it is advisable to avoid making decisions based on measures that will ultimately not be consolidated.
In particular, owners of tourist properties should not modify their pricing strategy thinking about the new 10% VAT planned for December by RDL 26/2026, nor incorporate the new IBI surcharges specifically provided for in that regulation into their forecasts.
Residential rental owners should also not assume the new extensions of five or seven years or the compensation introduced by RDL 27/2026 as permanent.
The exception is those operations, contracts, or specific actions carried out during the very brief period of validity of the decrees. In those cases, it will be prudent to individually check which regime is applicable once the repeal agreement is formally published.
The vote does not solely determine where prices will go.
What it does is eliminate a very broad set of changes that would have altered the incentives of owners, buyers, investors, and tenants.
From now on, it will be necessary to fundamentally observe three variables:
the evolution of residential supply, the behavior of temporary rental, and the evolution of tourist housing.
If the supply of regular rental increases, it will be a sign that greater contractual flexibility weighs more than the tax incentives that will ultimately not come into effect.
If temporary rental and room rental continue to grow, it will mean that many owners still particularly value flexibility.
And in the vacation market, it will be necessary to check whether maintaining the previous tax treatment favors the continuity of supply and limits some of the pressure on prices that the new tax burdens could have produced.
In any case, the scenario that began to be outlined with RDL 26/2026 and 27/2026 lasted only a few days.
The housing market now largely returns to the previous regulatory framework.
And the fundamental question also returns: ensuring that there is enough supply to meet a demand that continues to be high.
Article updated as of October 2, 2026. The Congress of Deputies has rejected the validation of Royal Decree-Laws 26/2026 and 27/2026. At the time of preparing this analysis, the formal publication of the corresponding repeal resolutions is still pending. The possible effects produced during their brief period of validity should be analyzed individually when appropriate.
