The Law for the right to housing has already completed its entire legislative journey. The Official State Gazette (BOE) publishes this Thursday the text of the new standard, which in its ninth final provision establishes its entry into force for “the day after” its publication. In other words, the law will be active as of this Friday, although the aspect that has most stood out from it, the possibility of establishing controls on rental income from the autonomous communities, will foreseeably have to wait months.
That issue, that of price caps, is the one that generated the most controversy in a tortuous political negotiation that has lasted for years. The idea was already present in the budget pact that the PSOE and Unidas Podemos reached in the first Sánchez government back in 2018, and caused strong differences in a decree on housing that both forces negotiated to change the Urban Leasing Law (LAU). When, through elections, the formation now headed by Ione Belarra became part of the Executive and it was decided that the instrument to establish rent controls would be a new law, the definition of this mechanism also generated great tensions between the coalition partners. And the system would undergo new changes in the last phase, that of parliamentary negotiation, to win the favorable vote of other groups such as ERC and Bildu.
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But the price controls will not be immediate. First of all, because it requires that the autonomous communities, which have transferred the powers in housing, be the ones that urge the declaration of price stress areas. It is a procedure assessed by the new law, which requires collecting data that justifies why this step is taken and proposing corrective measures. Once a territorial government agrees with the Ministry of Transport, Mobility and Urban Agenda, which coordinates housing policies at the state level, the establishment of a stressed area, limits to monthly rental income may be established in this area. But it will be done only on new contracts, and not on those that are already underway.
In addition, to set the price caps for large holders (those with more than 10 homes, or more than five if they are all within the stressed area and the autonomous community justifies the need to lower the general limit) it will be necessary to have a reference price index. Transport is reforming the one that it already has because it does not respond to the needs imposed by the new standard (basically, that it reflects the evolution of prices in a more up-to-date way and that allows differentiating properties based on certain characteristics), a process that the Government hopes to complete “as soon as possible” and that he believes that it will go in parallel with the procedure for declaring areas of tension. But there is another possibility for communities that, like Catalonia, already have their own price index: that they request the homologation of that system from the ministry.
For small owners, who are the majority of landlords in the Spanish rental market, prices will be limited based on the previous contract. These may also have new tax incentives, although these are the only part of the law that will not enter into force until January 1, that is, coinciding with the following fiscal year. In general, the reduction available to landlords, currently 60%, will drop to 50% (that is, half of the money they receive for rent does not count for income tax purposes). But in stressed areas, and depending on certain assumptions, those percentages will rise. The most interesting is, in exchange for lowering the price by 5% compared to the previous contract, obtaining a 90% reduction.
Other aspects of the law will be visible before. As of this Friday, for example, there will no longer be any assumption in which the tenant is the one who pays the real estate agency fees when entering into a rental contract. The norm requires that the landlord be the one who faces this payment, normally equivalent to one month’s rent. The new urban regulations that force, in new developments, to reserve 40% of the houses that are built as subsidized housing (or 20% if it is done on already consolidated urban land) will also enter into force immediately. And also the new eviction procedures, which allow these to be slowed down in cases of vulnerable families and, in general terms, require more procedures to expel someone from a home (in cases that go through civil means, not criminal proceedings).
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