The housing law will become a reality tomorrow, Friday, two days before the regional and municipal elections of 28-M. It will enter into force after being published in the Official State Gazette (BOE), although it will foreseeably take months to be put into practice, especially the measures related to price control in stressed areas. The rule, which has generated great discomfort in the real estate sector and has even been questioned by the Bank of Spain, regulates and caps the rental price, allows the definition of large fork in stressed areas to be reduced from ten to five homes and modifies eviction processes complicating the eviction of squatters, among other things.
The autonomous communities governed by the PP (Community of Madrid, Andalusia, Galicia, Castilla y León and the Region of Murcia) have already announced that they will not apply the law in matters that affect their powers. From the PSOE they have urged the main opposition party to enforce the rule.
Price control is one of the most controversial measures contained in the law. The CPI is eliminated as a reference index to update the rent and the contracts that are renewed in 2024 may not exceed a 3% increase when the owner is a large holder (individuals or legal entities that own more than 10 properties for residential use or a constructed area of more than 1,500 m2 for residential use, excluding garages and storage rooms).
In cases where the lessor is not a large holder, the increase will be the one agreed between the parties and, if they do not reach an agreement, it cannot be more than 3%. In addition, before December 31 of next year, a new reference index applicable to the territory outside the CPI will be created.
As for stressed areas, the competent administrations in housing matters may declare them as such if the average charge of the cost of the mortgage or rent plus basic expenses and supplies exceeds 30% of the average household income, or when the rental price of the home has increased at least three points above the CPI in the previous five years.
On the other hand, it introduces a series of measures to make it difficult to evict people in a situation of economic vulnerability, especially when the landlord is a large property owner. In this way, evictions cannot be carried out without a predetermined time and date.
It will also oblige the owners to exclusively pay the fees of the real estate agents and it will be prohibited for the owner to pass on other expenses such as the garbage fee or community expenses in the rental price to the tenant.
Fiscal benefits
The housing law also introduces tax credits in personal income tax for small owners who put their house up for rent in stressed areas. It contemplates a reduction of 90% when the rent is reduced by 5% of the total of the previous contract, 70% if it is rented to young people between 18 and 35 years of age or is used for social rent with a price below market and 60% of Bonus if the house has been rehabilitated in the two previous years.
The tax deductions will not take effect until January 1, 2024 and the owners will not be able to take advantage of them, therefore, until the Income Statement of 2025.
The Economist
