The Government is finalising a housing decree that reintroduces the deduction for the purchase of a first home in the IRPF, with a potential tax saving of up to €1,356 annually. The measure, which could be approved in July 2026, also includes deductions for rentals and an increase in VAT on tourist apartments.
The Executive is preparing a housing decree that, if approved, will restore a deduction in the IRPF for first home buyers that was eliminated in 2013. The measure, currently being negotiated with various parties, promises a tax saving of up to €1,356 annually for those who sign a mortgage after its entry into force, expected in July 2026.
Who benefits and how the deduction works
The deduction, initially proposed at 15% of the amounts paid for the mortgage, would have an annual limit under discussion, although the historical limit was €9,040. This means that a family could deduct up to €1,356 per year, providing a direct boost to their finances that, according to Government sources, aims to stimulate housing demand and reactivate associated consumption.
The main beneficiaries will be first home buyers, but advantages are also contemplated for small landlords who rent out properties, tenants with rental deductions, and those over 65 who sell their homes to pay for a care residence. The real estate and banking sectors could also see a rise in activity, according to the Executive's calculations.
The decree will not be limited to mortgage deductions. It will include a progressive system for rentals: greater deductions for low incomes and reduced benefits for higher incomes, aiming to lower rents in pressured areas. Additionally, the VAT on tourist apartments will be raised to 21% and temporary rentals will be regulated to prevent abusive practices.
Key figures and application timelines
The potential tax saving from the mortgage deduction, calculated on the historical limit of €9,040, equates to 15% of the deductible base. However, the final text may adjust this cap and establish a limit on the number of properties owned to prevent abuses, according to negotiation sources.
For rentals, the deductions will be tiered. For example, if the rent is below the official index from the Ministry of Housing, the landlord could deduct a higher percentage; if it exceeds that index, they would lose part of the benefit. The definition of "small landlord" will be key to determining who can benefit.
The decree is expected to be approved in July 2026 and will come into effect immediately. Mortgages signed from that date will be able to apply the deduction in the following year's IRPF declaration. Rental contracts with extensions until 2028 will also be affected by the new rules.
What it means for buyers and tenants
For those considering buying a home, the timing could be crucial. If the decree is approved in July, signing a mortgage after that date will allow access to a deduction that does not exist today. The savings could be significant, especially for middle incomes declaring in the IRPF. However, the Government warns that there will be no fragmentation of the decree: the entire package will go together, so its approval will depend on political support.
Tenants, for their part, could benefit from direct deductions in their declaration if the landlord opts for the progressive system. Additionally, the extension of contracts and the regulation of temporary rentals aim to provide them with more stability. The increase in VAT on tourist apartments aims to discourage their use and free up housing for permanent residence.
The economic context, with still high inflation and a growing demand for affordable housing, makes these measures a bet by the Executive to boost the economy from the residential sector. The deadline for approving the decree is July 2026, and those who do not adapt their contracts or meet the tax requirements could lose the benefits. Meanwhile, the real estate market is watching closely: if demand is reactivated, prices could tighten even further in some areas.
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