EU Parliament backs tax incentives and faster planning to address housing shortage
MEPs call for renovation funding, construction investment and a 60-day planning permit deadline as part of a new EU housing strategy
11 March 2026 | 📧 editor@ipropertyradio.com
The European Parliament has adopted a set of recommendations aimed at tackling the housing crisis across the European Union, calling for tax incentives, increased renovation funding and a major reduction in planning red tape to boost housing supply.
The proposals form part of the final report of the European Parliament’s Special Committee on the Housing Crisis. The report was approved during the plenary session by 367 votes in favour, 166 against and 84 abstentions.
MEPs say millions of Europeans are currently experiencing precarious living conditions due to rising housing costs and supply shortages. The report calls for coordinated EU initiatives to support both new construction and renovation as part of a broader strategy to improve access to decent, sustainable and affordable homes.
Among the measures proposed is a requirement that planning permits be processed within a maximum of 60 days, supported by simplified and digital permitting systems intended to accelerate housing delivery.
The Parliament also calls on the European Commission’s forthcoming Affordable Housing Plan to earmark specific funding for renovation programmes. MEPs say improving the energy performance of existing housing stock will be critical in addressing energy poverty while also meeting climate objectives.
Under the proposals, all new homes should meet higher quality standards in areas such as insulation, energy efficiency and indoor air quality.
The report also highlights concerns about the rapid growth of short-term rentals in many European cities. MEPs argue that upcoming legislation must balance tourism activity with the need to maintain access to long-term housing for residents. While common EU objectives are recommended, national, regional and local authorities would retain flexibility to design measures suited to their own housing markets.
In addition, the Parliament calls for a stronger role for public and social housing in urban areas to increase supply for vulnerable households.
On the investment side, MEPs are advocating incentive-based tax measures to support low- and middle-income households. These include removing tax barriers for first-time buyers, such as high registration fees, and adjusting tax systems to make long-term rental housing more affordable.
The report also urges better coordination of existing EU funding streams and suggests that unused Recovery and Resilience Facility funds could be redirected to support the construction and renovation of social, cooperative and affordable housing.
MEPs say any revision of EU state aid rules should facilitate public investment in social housing while respecting the diversity of national housing systems.
The recommendations also address capacity issues in the construction sector. The Parliament calls for action to strengthen the EU’s industrial base for construction and renovation, including scaling up innovative and sustainable building products and reinforcing supply chains for raw materials.
It also proposes minimum “Made in EU” origin requirements for components used in EU-funded projects.
Labour shortages are another focus of the report. MEPs call for improved training, fair wages and better working conditions for construction workers, alongside easier mobility for skilled workers across EU member states and mutual recognition of professional qualifications.
Borja Giménez Larraz, the Parliament’s rapporteur for the report, said Europe faces a structural shortage of housing.
“A generation that cannot afford a home cannot build a future. Europe is short 10 million homes, rents are up by more than 30%, and young people and families are paying the price,” he said.
“For the first time ever, the European Parliament is setting out a roadmap: a housing simplification package, faster permits in 60 days, investment in skills, legal certainty and protection for property owners and tenants, the mobilisation of private and public investment, and stronger support for young people, families and people with disabilities. No more excuses. Member states must now deliver.”
Irene Tinagli, chair of the Special Committee on the Housing Crisis, said the scale of the issue requires coordinated action across Europe.
“Housing is a fundamental social priority, and in the past year our committee has demonstrated that the housing crisis in the EU is real, affecting people in all member states,” she said.
“The housing crisis has far-reaching consequences for the quality of life of Europeans, impacting people’s health, social cohesion and access to economic opportunities. EU action is essential to restore balance and fairness in the housing market, because everyone deserves a place to call home.”
