Podemos threatens to block Spain's housing decree over landlord tax breaks demanded by Junts

Political standoff

The Spanish government's plan to pass a new housing decree this month has hit a fresh obstacle after Podemos warned it would withdraw support if the text includes tax breaks for landlords. The measure, which aims to extend rental contracts expiring in 2026 and 2027 and regulate temporary lets, needs backing from a fragmented Congress where both Junts and Podemos hold decisive votes.

Just as there are indispensable votes on the Catalan right, there are also indispensable votes on the left.

What the decree contains

The decree, announced on 29 June, is structured in two blocks: one to contain rental prices through measures such as mandatory written contracts, regulation of temporary rentals, and IRPF bonuses for landlords who lower rents; the other to boost affordable housing supply, including a VAT rise to 21% for tourist flats. The government is negotiating with Junts, which demands tax deductions for property owners and other concessions.

Podemos's red line

Belarra stated on 7 July that Podemos "will not support, actively or passively, tax gifts to landlords." She accused the government of doing nothing to solve the housing crisis and feeding speculation. Podemos also announced it would abstain on the spending ceiling, citing increased military expenditure.

Nobody can expect Podemos to approve tax gifts to landlords. If something has brought this government down, it has been doing nothing on housing.

Sumar pushes back

Sumar's deputy spokesperson Aina Vidal urged Podemos to abandon maximalist positions, arguing that a decree is not an electoral programme and that it would be incomprehensible for a left-wing party to vote against a text that extends rental contracts for over three million people. She called Junts "the real estate employers' association" but said its demands were legitimate.

I have no doubt that, when the time comes, Podemos will do what it has to do.

Government's dilemma

The executive faces a tight calendar. Sumar wants the decree approved by the Council of Ministers before the extraordinary plenary on 23 July, but the PSOE is cautious, fearing a repeat of April's defeat when PP, Vox, Junts and UPN voted against a similar text. If negotiations drag on, the decree could be approved on 28 July and voted on in late August or early September, still within the 30-day validation window.