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Date Published: 02/06/2026

Spain urged to bring back lower taxes on electricity and gas as households struggle

Spain’s Labour Minister says measures that helped keep bills down should be reinstated as inflation rises again

Labour Minister Yolanda Díaz has called on the Spanish government to urgently bring back a series of measures aimed at helping households cope with rising living costs.

Speaking on Monday June 1, the very day the crisis measures were scrapped, Ms Díaz said she wants a new emergency decree that would restore tax breaks on electricity, gas and other energy bills, along with a nationwide limit on rent increases.

The measures were initially introduced back in March as part of the government's response to rising prices and international tensions, but some of them have now expired.

"The war in the Middle East continues to affect families' finances," Ms Díaz said, warning that higher energy costs are still putting pressure on both households and businesses.

She argued that a new package of support is needed as inflation remains at 3.2%, adding that wage increases are not currently keeping pace with rising prices.

"We urgently need a new decree," the minister added, calling for the return of measures that have recently lapsed, including those linked to rental housing.

One of her key proposals is bringing back limits on rent rises. According to Ms Díaz, the previous system still allowed rents to increase but capped annual rises at 2%, helping tenants avoid much larger jumps in housing costs.

She also wants to see lower taxes on electricity and gas restored. Government figures suggest that without the temporary tax reductions introduced during the energy crisis, electricity prices would have been higher and inflation would have risen significantly faster.

The Labour Minister also used the event to call for changes that would benefit small businesses and self-employed workers, including the introduction of a VAT exemption system already used elsewhere in Europe.

The government has not yet decided whether any of the remaining support measures, including the VAT reduction on petrol and diesel, will continue beyond June 30. Ministers are still assessing the impact of the situation in the Middle East and its effect on energy markets and household finances.

Trade unions are also pressing for support to continue through the summer and have proposed additional measures, including direct financial aid for lower-income households.

For now, discussions are continuing within the government, but Ms Díaz made it clear she believes families and businesses still need help dealing with rising costs.

Image: Freepik

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