Housing is a fundamental right recognised by the Spanish Constitution and the new Housing Law, which will enter into force in the coming weeks, seeks to ensuring access to housing, promoting affordable renting and protecting tenants, through the following measures:
- Cap on rent revaluation in force
- Rent control in stressed areas
- End of tenants' inappropriate expenses, such as estate agent's fees, rubbish collection fees or community charges.
- Tax incentives for homeowners
- Penalties for empty flats
- Protection in case of evictions
Do you want to know what they are? We'll explain them to you below!
New features of the Housing Law affecting rents in Andalusia
Rent price index
One of the most important new features of the new Housing Act is the creation of a rental price index to regulate the prices of rented housing throughout Spain, in order to avoid price escalation in the rental market.
This index will establish reference prices for each geographical area and will be updated annually, with the objective of ensure access to decent and adequate housing for all.
In this way, tenants will be able to know whether the price they pay for their home is above or below the reference price for their area and, for their part, landlords will have an objective reference when setting the price of their home.
However, it is important to note that currently there is no rental price index in Andalusia.. Once the law comes into force, it will establish the regulatory framework for the creation and updating of the rental price index throughout Spain, including Andalusia.
Can I get a rent increase in 2023 with the new Housing Law?
Rent prices that are renegotiated from 2023 onwards may not rise by more than 2%. From 2024, the maximum allowed increase will be 3% and from 2025, the increase in the rental price will always be lower than the CPI, with the creation of a new reference index.
If you are a landlord, you cannot exceed these limits and if, on the other hand, you are a tenant, you do not have to pay this increase in rent. In fact, you can report it.
Rent control in stressed areas
Owners of homes located in stressed areas will not be able to raise the price of their rented flats. In other words, housing located in areas where the housing market is under pressure. due to the high demand for housing and the shortage of affordable housing supply.
In this sense, it will be the communities (and, in some cases, the municipalities) that will be able to declare an area of their territory to be under stress. However, we can confirm that there will be differences between large and small landowners:
- Small landlords (with less than 5 dwellings owned): they must freeze the rental price by setting as a reference the price of the last contract in force.
- Large landlords (with 5 or more dwellings in ownership): the rental price of properties located in stressed areas may not exceed the price index set by the autonomous community.
- End of improper expenses: the tenant will not pay the agency fee, the rubbish tax or the community fees.
From now on, owners of rental properties will be responsible for paying estate agents' fees:
"The landlord shall always bear the costs of property management and the formalisation of the contract".regardless of whether they are natural or legal persons.
In addition, the owners will have to bear other costs such as the rubbish tax or the community fees.
Changes in the way rent is paid
The new Housing Law establishes that the tenant must pay the rent, which is to be paid by "through electronic means".
However, it contemplates the possibility that "exceptionally, when one of the parties does not have a bank account or access to electronic means of payment, and at the request of the latter, payment may be made in cash and in the rented dwelling".
Tax incentives for homeowners
The new Housing Law establishes that owners of homes in stressed areas will be able to benefit from personal income tax deductions if they apply price discounts, or if they rent the home to young people or other vulnerable groups.
- 90% deductionif the landlord makes a rebate of at least 5% on the rent.
- 70% deduction, if the owner rents the property to young people between 18 and 35 years of age or if the property is assigned to social rental programmes.
- 60% deduction, if the owner rents a property that has been renovated within the last 3 years or the rental price is limited by legal regulation (social housing).
- Seasonal rentals in Andalusia
The new Housing Act proposes the creation of a working group to regulate the situation of seasonal renting and flat-sharing.
You can check the current status of the Tourist rental in Andalusia (requirements and necessary documents) at this link.
Other measures in the new Housing Law
Protection in case of evictions
The new law extends the protection of people affected by eviction. One of the main novelties is that it will be compulsory to notify those affected of the date and time of the launch in foreclosure proceedingsThis will enable them to prepare and seek alternative solutions. In addition, the following have been established further extensions in eviction proceedings, which can take up to two years.
Finally, in this regard, the regulation also reinforces support for the most vulnerable people with the compulsory access to out-of-court settlements. This means that negotiation between the parties will be encouraged in order to reach agreements that avoid eviction and allow those affected to keep their homes.
Surcharges on empty dwellings
The new law also includes a Real Estate Tax (IBI) penalty of up to 150% for empty dwellings (which have been unoccupied for more than two years), belonging to owners of 4 dwellings or more.
When does the new housing law come into force?
The rule has been sent to the Senate and is expected to enter into force. before the municipal and regional elections on 28 May.
Until the entry into force of the new Housing Law, the rules laid down in the Urban Leasing Law continue to apply.
Lawyer for real estate law
As we have seen, the new Housing Law brings important developments for the rental market and the protection of tenants' rights. However, in some cases it can be complex to interpret and apply, which is why having a lawyer specialised in real estate law can be of great help.
If you are looking for advice in this area, do not hesitate to contact our law firm in Malaga. Our lawyers specialising in real estate law will advise and guide you to the right path.