Keys to housing law
It took more than three years for the government to sign into law the housing that comes with ambitions to change the real estate market as we know it. The PSOE-Podemos coalition achieved it in the last leg of the legislature, with its separatist partners from ERC and Bildu as the key, as if by chance, to the doors of the 28-million-mile municipal and regional election campaign, which Sanchez had previously done. Brace yourself for repeated promises of social and affordable housing.
Right to Housing Act He is already on his way to the Senate, will mean interference in the rental market, which will remain partly in the hands of the independent communities. These will be the people who will be able to ask for the name of the municipality or district as confirmed and thus reduce the rental prices. But they will not be able to decide on other aspects, such as setting an annual ceiling for rent increases or obliging the landlord to pay real estate agency fees through lease mediation. This is the standard:
stressful markets
This will be the key so that communities and city councils can name a municipality, district or neighborhood with stressed rents and maximum rents. The law creates a definition of a stress market that will occur when local and regional authorities can prove that a home payment (mortgage or rent) represents an effort of more than 30% of household income in the area or that prices have risen more than 3 percentage points above the consumer price index in years past five.
The stressful residential market announcement will last three yearsbut may be extended annually “when the circumstances which prompted this declaration exist and justify in advance general measures and actions adopted to reverse or improve the situation since the previous declaration”.
Rental price ceilings
Rent price caps will apply exclusively to so-called sure markets and will be implemented in two different ways depending on whether the affected party is a large or small landlord, another definition created by law. For large owners (more than ten houses, but with the possibility of reducing it to five), the limits will be set by a reference price index that has not yet been designed, and this will affect contracts signed after the new law is in force.
This indicator will also set the price for small owners if a home is added to the market that has not had a valid lease in the previous five years. That is, in new apartments entering the market in stressed areas.
For the rest of the small landlords, the rental price limit will be set at the previous contract price. They can only increase it up to 10% when carrying out rehabilitation works, energy efficiency measures or ten-year contracts with tenants.
Reducing the definition of the large holder would be in the hands of the independent communities. Owners of more than a dozen urban properties for residential use or a built-up area of more than 1,500 square meters for residential use, excluding in any case garages and storage rooms, are considered substantial by law. But if the Home Rule requires it, owners of up to five or more urban properties may be considered for residential use in this way, provided they are in the same area declared as aggravated.
Forced lease extension
The law also gives power For tenants to decide whether or not to continue with the rented dwelling despite the termination of the contract. In those areas called firm, the lessee may extend the lease extraordinarily for annual periods, for a maximum period of three years, during which the specific terms and conditions of the existing contract will continue to apply.
The landlord may not contest the tenant’s decision unless other terms or conditions are established by agreement between the parties, a new lease agreement is signed with applicable rent restrictions, or the landlord can demonstrate the need to redeem the house for themselves or their first-degree relatives, among other reasons. other.
Involuntary extensions of one year are also considered after that if the tenant can prove that they are in a state of impairment and that the landlord is a significant landlord.
Rent limits increases
The CPI will cease to be the benchmark for annual rent increases and will give way to ceiling increases such as the current 2%. In this way, in 2024 the increase limit will be 3%, and from 2025 the annual guideline will be set by a new indicator that will be generated by INE “In order to avoid disproportionate rent increases in lease contracts.”
Agency expenses will correspond to the owner
An end to the legal vacuum that has characterized in recent years that it is customary for the tenant to be responsible for the fees of the real estate agency, especially in large capitals such as Madrid and Barcelona, where demand far exceeds supply. . The housing law requires it Estate management expenses and formalization of the operating contract by the owner. Until now, this has been equivalent to the monthly rental price.
In the same way, the tenant may not be charged for other expenses attributable to the landlord such as community fees, litter charges, or any other expenses “if not previously agreed upon.”
electronic payment
The new standard also requires that rent be paid through electronic means. There will be exceptions only when one of the parties does not have a bank account or access to electronic means of payment and, at their request, can be made in cash and in the rented home.
Additional IBI fee for vacant homes
In order for landlords to put more homes on the market, the government has agreed with its partners to penalize landlords who leave their property unused. It will do this through the IBI surcharge and will affect those homes that remain vacant for more than two years except for justifiable reasons for temporary vacancy.
The additional cost will be up to 50% of the net tax amount in the case of real estate Residential use who have been unemployed for more than two years; 100% when the vacancy period exceeds three years, and may be adjusted based on the vacancy period; An additional fee of 50% (up to 150%) may be added in the case of properties owned by two or more owners of unoccupied residential properties in the same municipality.
It will be taken into account as justification for vacant accommodation Temporary transfer for work or training reasons, change of address due to dependency or health reasons or social emergency, property intended for second home use up to a maximum of 4 years of continuous vacancy, property subject to employment or rehabilitation procedures, or other circumstances that make it impossible That it is actually inhabited, or that the dwelling is the subject of a lawsuit or causes a pending judicial or administrative decision that prevents its use and disposal, or that it is a property that offers its owners for sale in market conditions. , for a maximum period of one year in this case, or for rent, a maximum of six months.
Changes in personal income tax deduction
The rental deduction for personal income tax will decrease from 60% to 50% in new leases, but may rise to 90% when the house is in a tense area and the rent is reduced by 5% compared to the previous facility.
Also for homes in stressed markets, the decline in personal income tax will reach 70 % when landlords rent a home to young people between the ages of 18 and 35.
The decrease in personal income tax for landlords will also occur when the home undergoes rehabilitation in the two years prior to the signing of the contract. In this case it may be 60%.
More protection for handcuffs
The Housing Act, which the government agreed with ERC and Bildu, also provides more guarantees for delinquent and occupier tenants not to be evicted. The rule is reconsidering the procedure for requesting the eviction of a home occupant. The landlord will have to prove that they are not a large landlord and if the occupants use the requested home as normal to accept the claim.
In the case of large landlords, they must prove whether or not the occupant is in a vulnerable position and then prove that they have undergone a conciliation or mediation process set up by the relevant departments.
Moreover, the release of residences may be delayed by up to two years and it will be necessary to notify in all cases, regardless of whether or not execution has been previously attempted, the date and time of execution. evacuation.
Subsidized housing
pedigree land reserve For subsidized housing, it increases from 30 to 40% in developable land (new development measures) and from 10 to 20% in unconsolidated urban land (reform or regeneration measures for urbanization).
