Balearic agents hoped the decrees’ defeat would restart the rental market. Three days later, the government brought most of them back.
NLS News · Wednesday 7 October 2026
“Scared off”
José Miguel Artieda, president of the Balearic estate agents’ association, said last weekend he hoped new rental contracts would pick up again after Congress rejected the government’s two housing decrees. His warning was blunt. Landlords are being “scared off”, and a smaller supply of rental homes will only push prices higher.
His criticism of the decrees was equally direct. He described them as presented hastily, without expert consultation, unbalanced and without consensus from the affected sectors, and said they created serious legal uncertainty. He stressed that the housing emergency is urgent, but argued the answer has to come through consensus and measures that give legal certainty.
The numbers behind the warning
Artieda pointed to data from Madrid’s Observatorio del Alquiler, which reported an “unusual acceleration” in the reduction of listed rental homes in the week the decrees were approved. Adverts were being pulled, and the Observatory estimates supply of residential and temporary rentals is about 4,290 units below what would have been expected.
That figure covers all of Spain, not Mallorca alone. It reflects listings withdrawn during one week of uncertainty, not a permanent loss of housing.
Then Tuesday happened
Artieda’s hope of stabilisation depended on the decrees staying dead. They didn’t. On Tuesday 6 October, the cabinet approved two new decrees, part of a 21-measure package that Sánchez says addresses rent protections, first-home finance, supply and speculation. For Mallorca, three elements stand out:
- Tourist-rental VAT: Holiday rentals would face 10% VAT, in line with hotels. The Majorca Daily Bulletin reports this would apply to 26,143 properties in the Balearics, which have been exempt from the tax so long as no services are offered during the stay.
- Compensation for non-renewal: A landlord refusing to renew a tenancy outside the listed exceptions could owe the tenant 12 months’ rent, around €18,000 in the Balearics, according to the Bulletin. The decree includes six exceptions.
- First-home loans: Interest-free state loans of up to €50,000 for first-time buyers.
The Balearic Government is reported to be considering a legal challenge to the decrees, which it has called an abuse of law.
The political backdrop
Sánchez called the new decrees a matter of humanity and said voters will have the final say on 29 November. The government says speculative operators, not small owners, should carry the greater burden. The BBC’s analysis describes the election call as a calculated move that puts housing, the issue most concerning Spaniards in polls, at the centre of the campaign.
Whether these decrees survive is uncertain. They go to the Diputación Permanente, the 69-member body that holds Congress’s functions during the election period. The rental-renewal decree is scheduled to take effect on 15 November, but only if it is validated, which looks difficult without the PNV’s support.
NLS Analysis
For Mallorca, the decrees pull in two directions.
For landlords, two kinds of uncertainty overlap. One is about rules: whether the renewal decree survives, and whether the tourist-rental VAT does. The other is about who governs after 29 November. Artieda’s concern, that uncertainty itself shrinks supply, doesn’t need the decrees to become law to bite. The more contested the rules, the more owners may sit out.
For buyers and investors, Mallorca’s market is defined by scarcity, with limited land and a small supply of prime homes. A tighter rental market doesn’t change that, but it does shape the case for buy-to-let versus owner-occupation. Agents advising on that choice should check each decree’s final text.
NLS Conclusion
Mallorca’s agents wanted calm. What they got was a pause, then a revival, with a vote date still to come and an election behind it. For anyone letting property in the Balearics, the decrees may be dormant, but the debate is not.
Sources: Majorca Daily Bulletin (4, 6 and 7 October); BBC; The Olive Press; Público; The Objective; Citizens Advice Bureau Spain.
