This Housing Right Act goes into effect this fridayExcluding tax incentives applicable to personal income tax on residential real estate leases, effective January 1, 2024.
Begins the norm application published yesterday in the Official State Gazette (BOE) after more than two years of travel and amid criticism from supportersbusinessmen, real estate portals and other organizations who think that this law will not serve to solve the housing problem in Spain.
The first draft version of the Housing Act was approved by the Cabinet in October 2021 and passed as bill a few months later in February 2022 and is now passing through Congress for approval. emergency processing
After months of intense deliberation within the coalition government and with parliamentary groups, Congress gives the green light to Housing Act on April 27, the Senate did the same on May 17. Eight days later, it arrived at the BOE to take effect on May 26.
This is the first democratic state Housing Law and one of the reforms included in the Recovery, Transformation and Resilience Plan and one of the milestones agreed with the European Commission for the payment of ‘Next Generation EU’ funds.
Rent limits, big forks and evictions
Among other measures, the Housing Act imposes new frontiers to the rise rental price all over Spainallows the number of large landlords to be reduced from ten to five properties in certain circumstances and prevents these owners from evicting vulnerable tenants without prior settlement or arbitration.
Specifically, the norm maintains the 2% limit in rent growth for this year and raises it to 3% in 2024, thus establishing a new reference index valid for the region outside the CPI before 31 December next year.
On the other hand, law Reduces the concept of large owners from ten properties to five properties and extends the restrictions for landlords in stressful areas to natural persons.
In addition, the new law introduces a number of measures to make it more difficult for economically vulnerable people to evacuate, especially when the landlord owns a large property. Like this, the evacuations they cannot be performed without a predetermined date and time.
Tax incentives and IBI surcharge for vacant homes
An improvement in the Personal Income Tax (IRPF) regulation in tax matters has been established. to encourage affordable rental of habitual dwellings, through modulation of the reduction in the net return on habitual residential rent. For this purpose, a 50% discount percentage is determined in new lease contracts and this rate can be increased according to certain criteria (stretched area, rehabilitation).
A clear definition has also been introduced so that City Halls may impose a Property Tax surcharge on homes that have been vacant for more than two years.and except for justifiable reasons for temporary vacancy, provided that the owner has at least four residences in this case.
Likewise, a modulation of the surcharge has now been established. It is in 50% of the liquid IBI quota, which can reach 150%.it depends on the number of vacant houses in the same owner’s municipality area and the length of time they have been vacant.
Incentive Affordable Housing
The concept of subsidized affordable housing was introduced as a necessary figure to increase supply in the short term. It is concerned with providing tax or civic benefits in exchange for privately owned housing used for rent at discounted prices for persons whose income does not allow them to access a home at market price, including third sector organizations (associations, foundations). .
The law also thinks andl Promotion of protected housing for rent at a limited price. A minimum of 50% is determined for rental housing within the land reserved for subsidized housing.
In addition, the percentages of land reserves for subsidized housing are increased, 30% to 40% on developable land (new urbanization actions) and 10 to 20 percent on unconsolidated urban land (urbanization reform or renewal actions).
Establishment of the Housing Advisory Council
The law also provides for the establishment of the Housing Advisory Council. To ensure the participation of all representatives in the preparation and development of housing policies.
It will be a collegiate body of the State with a technical, advisory and advisory nature for programming public housing policies and will consist of representatives of different Ministry Departments with housing-related powers, third sector associations and other representative associations. Representatives of business and professions affected by the law, various specialist professionals from the financial sector, as well as from the housing, university field or research.
Permanent public protection of subsidized housing
The indefinite nature of the subsidized housing is determined and always guaranteed for a period of at least thirty years. Some basic conditions have been established at the state level that define the permanent public protection regime of subsidized housing promoted on qualified reserve land. In all other cases, a disqualification period of at least 30 years is established.
Also, it reinforces The role of applicants’ registration for access to subsidized housing and the establishment of objective grant criteria.
The real estate industry that criticizes the law
Real estate portals Pisos.com, Idealista and Fotocasa includes “coercive policies” against landlordsignoring that the real elephant in the rental market room is the lack of supply”.
The General Council of the Spanish Official Colleges of Realtors (Coapi) described the new Housing Law as a “collage of short-term ineptitude”. Gerard Duelo Ferrer, president of the Barcelona General Council and Coapi, described the rule as “paved and confusing” as well as “invasive, intrusive and unstable”.
Likewise, he emphasized that the law interferes with rent prices by trying to provide rent control and this affects constitutional rights and freedoms. harms its owners “seriously”.
From the CEOE, its chairman, Antonio Garamendi, has confirmed several times that the Housing Act is “intrusive” for the rental market, warning that it will cause “the opposite” of what it intended.
Juan Antonio Gómez-Pintado, head of Spain’s Promoters Constructors (APCEspaña), announced the need for a Housing Act on his behalf, “but not this one.” “The Housing Act has been ideologized and worst of all, it does not solve the current problem,” said Gómez-Pintado a few days ago.
Likewise, he gave the example of Catalonia, in his view, “they have a Law similar to that promoted by the central government, and the consequences are dire: they have disappeared.” 54% of the houses on the market and the rent increased uncontrollably“.