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Date Published: 27/10/2021

ARCHIVED - Everything you need to know about the new housing law in Spain

ARCHIVED ARTICLE

Some of the measures include income tax deductions for landlords and the creation of more affordable housing in Spain

<span style='color:#780948'>ARCHIVED</span> - Everything you need to know about the new housing law in Spain

The Spanish Government announced a number of novel measures as part of the Law for the Right to Housing on Tuesday October 26 that aim to control the rise in rental prices and give more access to the housing market to vulnerable and low-income families.

The 7 key changes to the law are as follows:

1. Communities declared stressed areas

Autonomous communities may declare their region as a ‘stressed’ residential market for a period of up to three years. In order to qualify, the community must confirm that rental income exceeds 30% of the average income per household and that, in the last five years, it has risen by five points above the Consumer Price Index (CPI) of the region.

2. Rents limited for owners of more than ten homes

Larger companies and institutions that own more than ten rental properties in stressed areas will be limited in how much rent they can charge. However, the Ministry of Transport, Mobility and Urban Agenda has indicated that, while this measure has been drafted into the law, it will take 18 months to prepare the benchmarks and thus enforce it.

3. Income tax deductions

The current deduction of 60% in personal income tax from the rental of a habitual residence will go down to 50%, but this will be modulated up to 90% in stressed areas.

Benefits are available to those renting to young people aged between 18 and 35 years old (a reduction of 70%), while income tax deductions of 60% are available for protected housing.

4. Penalties for empty houses

The new law dictates that regional authorities can apply a 50% surcharge on the real estate tax (IBI) on all homes that remain unoccupied without a justifiable reason for more than two years; this increases to 100% if the property is empty for more than three years and to 150% if the owner has several vacant houses in the same municipality.

There are a number of justifiable reasons for leaving a home empty, such as buildings under construction and those involved in a legal dispute.

Notable exceptions to the rule include properties for sale (one year maximum) or for rent (up to a maximum of six months).

5. Suspension of evictions

A move which has been warmly welcomed is that the courts will now be able to suspend the evictions of vulnerable people and families for up to four months.

6. Increasing the availability of social housing

The new law guarantees that 30% of urban land in new developments will be reserved for social housing.

7. Affordable housing

Finally, the legislation will aim to create “incentivised affordable housing” whereby privately owned homes will be subject to tax breaks for renting at reduced prices.

Image: Archive

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