Spain’s government shelves flagship housing decree until September after Junts and Podemos balk

The decree that was meant to cap the legislative term

A 69‑page real decree‑law was supposed to be the government’s signature move before August, a “widely transversal” package that Portavoz Elma Saiz had promised in June would command a broad congressional majority. The draft, negotiated over weeks between PSOE and Sumar, included an automatic two‑year extension of rental contracts expiring before 30 June 2028, a regulation of seasonal and room‑based rentals, an increase of VAT on tourist flats to 21 %, a tightening of sanctions on digital platforms, tax incentives for landlords who freeze or lower rents, anti‑eviction shields for vulnerable households, and a reform of the land law. The government described it as a mosaic capable of pleasing the entire investiture bloc that re‑elected Pedro Sánchez in November 2023.

It will be a broad, transversal real decree law that incorporates measures supported by different groups throughout the legislature so that everyone can feel represented.

Why it fell apart

The breadth that was meant to unite the coalition instead became its undoing. Junts per Catalunya, essential for any majority, told the government the text was “more of the same” and complained that it lacked measures on squatting while being laced with electoralism. The party also demanded stronger price‑control levers, though it simultaneously shared the PNV’s wariness of state market intervention.

Podemos, led by Ione Belarra, drew a red line: the land‑law reform had to be removed, tax breaks for landlords were unacceptable, and the anti‑eviction shield needed to be reinforced. The PNV conditioned its support on the same land‑law provisions that Podemos wanted scrapped, demanding urban‑planning agility, legal certainty for developers, and respect for regional competences. Sumar’s spokesperson Ernest Urtasun conceded that the government was accepting the delay “because the groups themselves asked for it,” but insisted that no party had walked away.

Nobody has left the table. Everybody wants to sit down, talk and make proposals. Nobody has said they don’t want to push this forward.

From housing to fires

With the housing decree struck from the agenda, the government rushed to reconfigure the last Council of Ministers before the recess. The executive announced that the session would instead concentrate on fighting the wave of wildfires linked to the current climatic emergency. The shift allowed Moncloa to project urgency in a domain where political blame is harder to pin, after a session that had already seen the Treasury suffer two defeats on the stability path, foreshadowing trouble for the autumn budget.

The road to September

The Housing Ministry, led by Isabel Rodríguez, released a statement affirming that “the rush of the calendar can be an obstacle to the agreement, given the complexity of the text” and that the deal is “closer than at any other moment of the legislature.” The government intends to use the summer weeks to intensify talks with Junts, Podemos, the PNV and the rest of the investiture ranks, hoping to bring a revised decree to the cabinet as soon as the new political term begins. The delay is the second housing setback of the year: in April, a decree extending rental protections was shot down by the right‑wing bloc plus Junts, with the PNV abstaining. Avoiding a repeat of that defeat is now Moncloa’s overriding priority, but the cross‑pressures among its allies leave the September deadline anything but secure.