After the Streets Filled, Spain Acts on Housing

There is a particular logic to a government response that arrives after the protests have turned violent—a logic born not of foresight but of pressure, of the recognition that the streets have become the loudest voice in the room. In Spain, that pressure has now produced a policy. The government of Prime Minister Pedro Sánchez has introduced a new tax on seasonal and tourist rentals, part of a broader effort to address the housing crisis that has driven hundreds of thousands into the streets in more than fifty cities, and to build a fund of approximately ten billion euros to support first-home loans .

The measure was published in the Official State Gazette on September 30, as part of Royal Decree-Law 26/2026. It introduces a specific tax regime for tourist accommodation, applying a 10 percent VAT rate to certain short-term rentals and permitting municipalities in "stressed" housing markets to levy surcharges on the property tax (IBI) of up to 150 percent for owners with four or more tourist properties . The decree also extends the reduced 10 percent VAT rate to renovation and repair works on homes intended for habitual rental, with requirements including payment by bank transfer and a minimum building age of two years .

The context for these measures is a housing market that has become increasingly inaccessible for ordinary Spaniards. According to the Bank of Spain, tourist accommodations represent 10 percent of the rental market nationwide, with concentrations reaching nearly one in two rented properties in the historic centers of Seville and Málaga. At least six municipalities in the Canary Islands have more tourist beds than residents . The average rent in Madrid has nearly doubled in a decade, while wages have stagnated. A 26-year-old social worker and a 23-year-old software engineer told reporters that the average salary of 1,200 euros per month cannot cover an average rent of 1,200 euros—a calculation that "obviously does not add up" .

The protests that preceded the decree were the largest since the COVID-19 pandemic. The immediate trigger was the eviction of Maricarmen Abascal, an 87-year-old woman forced from the apartment she had lived in for seventy years after an investment fund acquired the building and raised her rent by 275 percent. The government attempted to respond with two housing decrees that would have strengthened protections for renters and limited speculative investment, but Parliament rejected them on October 2 after the conservative Popular Party, the far-right Vox, and the Catalan separatist party Junts voted against . The rejection prompted protests in more than fifty cities on October 3, with the Madrid Tenants' Union calling for a general strike .

The new tax on tourist rentals is, in effect, a second attempt to address the crisis through fiscal means. The decree also establishes a sanctions regime for online rental platforms, with fines ranging from 100,000 euros for minor infractions to one million euros for very serious ones, which can be increased to 2 percent of the platform's global turnover . The measures take effect in December. Whether they will be sufficient to calm the anger that has filled Spain's streets remains to be seen. The protests have not ended. The tenants' unions have not withdrawn their call for a general strike. And the government, which is now considering early elections, has staked its response on a policy that arrives not as a solution but as a recognition that the problem can no longer be ignored.

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Sources: Capital, Demócrata, CNA, RaiNews, SRF