On 2 October 2026, the Ministry of Housing and Ministry of Finance jointly presented a €2.05 billion fiscal package within the 2027 Budget draft, targeting housing affordability through tax instruments. Key measures: (1) VAT reduction to 4% (from 10%) for new build-to-rent (BTR) developments with 100% units designated as affordable rental for 15 years (est. €450M cost); (2) IRPF deduction enhancement for landlords in stressed areas reducing rent 10% (from 5% to 90% deduction, up from 60%); (3) IBI (property tax) surcharge of up to 150% on vacant homes >2 years in stressed areas (municipal option); (4) ITP/AJD exemption for first-home buyers <36 years purchasing <€250k in stressed areas; (5) Corporate Tax credit of 20% for institutional investors (SOCIMIs, funds) acquiring and renovating vacant stock for affordable rental.
Key Takeaways
- Supply-Side Focus: The package shifts from demand subsidies (which inflate prices) to supply incentives, particularly targeting the 3.8M vacant homes (INE 2025) via penalties and renovation credits.
- Regional Coordination Required: IBI surcharge and stressed area designation depend on regional governments; Catalonia and Basque Country have already opted in, Madrid and Andalusia remain opposed.
- EU State Aid Check: The SOCIMI renovation credit (Art. 14.7 LIS modification) requires EU Commission notification as potential state aid; approval expected Q1 2027 under GBER (General Block Exemption Regulation).
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement