The Spanish government prohibits investors from buying flats below 70% of the market price

MadridAfter hours of very intense negotiation, the PSOE and Sumar have reached an agreement in extremis within the Council of Ministers to approve a package of housing measures. "The effort was worth it," proclaimed the Minister of Housing, Isabel Rodríguez, in the subsequent press conference, despite the lack of agreement among the groups of the plurinational majority. They have until Friday to secure their support, when the regulations must be voted on in an extraordinary plenary session in Congress requested by the Spanish executive. In fact, La Moncloa trusts that social pressure on the streets will sway the groups towards a 'yes'. "The context is a window of opportunity," assert sources from the executive. One of the main novelties is the limitation on the purchase of homes by investment funds: according to the text of the decree-law, to which ARA has had access, a private entity is prevented from buying apartments below 70% of the market value price, but with limitations.

"Any entity with or without legal personality that has as its corporate purpose the acquisition of real estate," says the text. However, it makes exceptions: if the destination of the housing purchase is directed at an affordable or social price for a minimum term of five years; if the object is the residence of people who require socio-sanitary care; or if they are managed by third-sector entities or for victims of gender-based violence. At the same time, public entities are excluded from these limitations, as well as private ones that adhere to the administration's code of good practices in housing matters, and also when it involves a property obtained as a result of a judicial or mortgage foreclosure.

Another novelty is the regulation of room rentals. It will be required to prove that there is a real need for this type of contract and, if this is not the case, it automatically becomes a habitual residence contract. Furthermore, the price is limited: the rent for all the rooms cannot exceed the price the property would have as a whole according to the Ministry of Housing's reference price index. In any case, it introduces a safeguard for Catalonia, which already has this issue regulated: regional regulations will continue to be applied.

All measures are taken in a context of maximum social mobilization following the eviction last week of 87-year-old Maricarmen Abascal in Madrid. For this reason, even the explanatory memorandum of the housing decree-law makes reference to it. "This decree-law is a broad package of structural measures that introduce changes to the legal system to provide guarantees for the constitutional right to access housing [...]. These are measures that have broad and greater social support [...]. If public administrations close off any perspective of action on redistribution, social justice, and modification of the legal system, which, even if complied with, represents a social and institutional failure, such as what happened in the case of Maricarmen Abascal".

Deductions of up to 100% for owners

The PSOE and Sumar have decided to divide the measures into two different decree laws.

A first decree law that includes measures requested by both the left and Junts and the PNV, with the doubt being whether it is viable for them all to go ahead at once because there may be cross-vetoes. Aside from the limitation on the purchase of homes by vulture funds and the regulation of room rentals, the first decree law includes the extraordinary two-year rental extension; a maximum of 2% annual increase in the rent price when it is time to update it; and the halting of evictions of vulnerable families, with exceptions. This may be a point of contention with Junts, as it has already struck down this measure previously in Congress. The Junts members were asking to differentiate between the small and large landlord. According to the draft to which ARA has had access, evictions will not be able to occur if the landlord is also in a situation of vulnerability if they stop receiving the rental income or if it is a natural person with fewer than two properties. The tax incentives requested by the Junts members are also being introduced. Landlords will be able to avail themselves of significant deductions when paying personal income tax (IRPF) on the positive net yield of the income they receive. It could be up to 100% when, in the case of not being a large landlord, they renew the contract after five years with the same tenant and with a reduction of at least 5% of the previous rent. Also if you are a small landlord (up to 10 homes) and you rent out the property for the first time and the initial rent is below the reference price index of the Ministry of Housing.And a second decree-law that goes further and establishes indefinite rental contracts, a request from the Tenants' Union that had also been adopted by Sumar as well as Podemos, ERC, Bildu, Compromís, and the BNG, and which was the point of contention with the PSOE until the very end.Friday vote

The vote will take place on Friday in the Congress of Deputies, because the Spanish executive has requested an extraordinary plenary session, also taking advantage of the pressure on the street, especially at the Puerta del Sol in Madrid, where the encampment is being maintained. The Spanish Prime Minister, Pedro Sánchez, has called for the approval of this "ambitious" package. In a video published on X, he argued that the housing decree-laws allow for "building a sufficient parliamentary majority to combat the housing emergency". Thus, he appealed to the left-wing and plurinational parties, as he admitted that from the PP and Vox "he cannot expect anything": "We have listened and we have acted. Now it is up to the groups to do their job. I ask that you be empathetic with the citizenry and prioritize the interests of the people over those of the speculators".

To understand the difficulty of squaring the circle, one only needs to explain the behavior of the Sumar ministers. They have decided to hold a press conference parallel to the official one at La Moncloa to qualify their position. The Minister of Social Rights, Pablo Bustinduy, has said that he rejects the tax breaks, which were a demand from Junts and were included with the desire "to reach an agreement." He also stated that the five Sumar ministers wanted a single decree-law and that the automatic renewal of contracts be included in the same package –reports Martí Odriozola–.

Precisely the fact that they are separated into two different packages distances Podemos. "It's a mockery," asserted the secretary general, Ione Belarra, who has not clarified the direction of her vote. For its part, Junts also does not clarify how it will vote and asks for time. For Gabriel Rufián (ERC), on the other hand, the direction of the vote is clear: yes. Despite considering the decree-law insufficient, he believes the measures are "useful" and directly challenges Junts: "Why does Junts vote in a self-destructive way if it is falling week after week in the polls?", he asked.