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Housing Law: main measures and how it affects landlords and tenants

The new Housing Law, the first to regulate at the state level the basic rights and duties of citizens in relation to this fundamental right, has been shrouded in controversy due to its nature as a regulator of the real estate market and protector of tenants’ rights.

Although part of its articles (in particular, the one related to the declaration of the In practice, other measures will probably remain inapplicable for the next few years in many Spanish localities after the results of the last regional and municipal elections. landlord-tenant relations.

To make it clear to you what your duties and rights are after the entry into force of this regulation, we tell you the main measures of the Housing Law .

Housing Law: a framework regulation to guarantee the right to housing

The Housing Law occupies a hitherto unoccupied position in our legal system: although there is a extensive production of autonomous community regulations on housing, The same was not true with respect to the existence of a state standard setting out “those basic and equal conditions guaranteeing uniform treatment of the right to housing recognized by the Constitution”, as explained in the Explanatory Memorandum of the Law.

The Constitutional Court itself has highlighted the “non-existence of a state legislation on housing that serves as a parameter of constitutionality to the high autonomic normative production on the subject “.

Thus, although all the autonomous communities have assumed full competence in housing matters in their Statutes of Autonomy, without exception, the State can influence housing policy to a certain extent.

In this case, the new regulations seek to establish a homogeneous regulation of the most essential aspects of housing policies. These are some of its objectives:

  • Create a basic state framework of rights and duties in relation to housing and its ownership.
  • Facilitate access to decent and adequate housing for people who have difficulty accessing housing under market conditions, especially young people and vulnerable groups.
  • To promote an offer at affordable prices and adapted to the realities of urban and rural areas.
  • To ensure the functionality, safety, universal accessibility and habitability of housing, thus guaranteeing people’s dignity and health.
  • Define the fundamental aspects of state housing planning and programming.
  • To regulate the basic legal regime of public housing parks, ensuring their development, protection and efficiency.
  • Encourage the development of housing typologies suitable for different forms of coexistence and habitation.
  • Improve protection in home purchase and leasing transactions.

How the Housing Law affects tenants and landlords

There are several measures within the Housing Law that affect landlord-tenant relationships. These are the most outstanding ones:

New definition of large homeowner and vacant housing

Under the new Law, a large holder is defined as an individual or legal entity that owns more than 10 urban properties for residential use or a built-up area of more than 1,500 m2 for residential use, excluding garages and storage rooms.

In the area of stressed zones, a large holder will be considered to be the owner of 5 or more urban properties for residential use located in the same zone declared as stressed, while small holders will be those individuals or legal entities that own less than 5 dwellings.

In addition, a definition of ‘vacant housing’ is included so that municipalities can apply a surcharge on the Real Estate Tax (IBI) to those homes that have been vacant for more than 2 years, and provided that the owner has a minimum of 4 homes in this situation.

New IBI surcharge in case of vacant properties

In line with the preceding point, the Law modulates and allows to increase the IBI surcharge to unoccupied residential property The maximum amount of the IBI liquid quota was 50 percent, which can now reach 150 percent “depending on the duration of the vacancy and the number of unoccupied dwellings also owned by the same owner in the municipality”.

All of this “except for justified causes of temporary vacancy, as established by law”.

Maximum annual increase in the rental price of housing

One of the most important measures contained in the Law consists of establishing, for housing leases in which it is appropriate to update the rent during 2024:

  • A maximum increase of 3 percent in the rental price in the case of large tenants.
  • In the case of the remaining owners, the increase will be that agreed between the parties and, in the absence thereof, may not exceed 3 percent. In practice, the tenant only has to refuse the agreement for the same ceiling to apply as for large tenants.

As of 2025, a new reference index, to be designed in the coming months by the National Statistics Institute (INE), will be used for the annual update of lease contracts, replacing the CPI, to avoid disproportionate increases in rent.

During 2023, the rental price update will be a maximum of 2 percent.

Extraordinary one-year extension in case of social or economic vulnerability

The Law introduces an extraordinary extension of one year at the end of the contract, which may be requested in proven situations of social and economic vulnerability when the lessor is a large housing tenant.

Real estate management and contract formalization expenses, to be paid by the lessor.

This is another of the star measures of the regulation, clarifying the structure of expenses in the event of formalizing a habitual residence lease relationship.

More tenant protection against evictions

The Law also introduces important improvements in the regulation of the eviction procedure in situations of vulnerability. Among other things:

  • The need for the consent of the interested party in the transfer to the competent public administrations to verify their situation of vulnerability in eviction proceedings is eliminated.
  • The scope of protection is extended when situations of vulnerability are identified.
  • Various technical improvements are introduced in the drafting and, in accordance with jurisprudential and international standards, the system does not establish a system of automatic suspension by the Counsel for the Administration of Justice if vulnerability is proven, but a system of decision by the court after a weighted and proportional assessment of the specific case.The suspension period is set at two months for individuals and four months for legal entities, increasing the current periods of one and three months, respectively.
  • A conciliation or mediation procedure is introduced in cases in which the plaintiff is a major homeowner, the property being sued is the habitual residence of the occupant and the latter is in a situation of economic vulnerability. When the plaintiff is a large holder and the eviction lawsuit affects vulnerable persons, the application of this conciliation or intermediation procedure must be accredited.
  • The application of this procedure “will make it easier for the competent Administrations to provide adequate attention to the affected persons and households, offering a response through different social protection instruments and housing policy programs”, as explained in the Law. For example, housing solutions for those affected.

Possibility of declaring a stressed zone

One of the main measures of the rule (and also one of the most difficult to enforce) is to open the door to the housing authorities being able to declare stressed residential market areas. This qualification will be maintained for three years, being extendable, and must be expressly declared, provided that any of these requirements are met:

  • That the average burden of the cost of the mortgage or rent on the personal or household budget, plus basic expenses and supplies, exceeds 30 percent of the average income or median household income.
  • That the purchase or rental price of the property has experienced, in the five years prior to the declaration as a stressed housing market area, an increase of cumulative growth percentage at least three percentage points higher than cumulative growth percentage of the consumer price index of the corresponding autonomous community.

Declaring a tensioned zone allows:

  • Possibility of extraordinary annual extension for the lessee after the end of the lease term
  • Limitation of rent to the rent of the previous lease in new leases to new tenants.

Specifically, “in residential leases subject to this law in which the property is located in a stressed residential market area […], the rent agreed upon at the beginning of the new contract may not exceed the last rent of the rental contract for the habitual residence that had been in force during the last five years in the same dwelling.Once the annual rent update clause of the previous contract has been applied, no new conditions may be established that establish the passing on to the lessee of fees or expenses that were not included in the previous contract.

  • Possibility of approving systems of reference price indexes by territorial areas, establishing a database of rental contracts to monitor and evaluate the measures adopted.
  • Possibility of applying the limits of the reference price index systems also to dwellings that have not been rented in the last 5 years.

Tax benefits in case of offering your home at a reduced price

This is a positive measure that will allow you, as an owner, to benefit from tax advantages in certain cases. Specifically, as of January 1, 2024 you will be able to benefit from:

  • 50 percent rebate when leasing real estate used for housing.
  • 60 percent rebate when the dwelling has been the object of a rehabilitation project completed within the two years prior to the date of the lease contract.
  • 70 percent rebate when the taxpayer has rented the property for the first time, provided that the property is located in a stressed area and the tenant is between 18 and 35 years old. Also when the lessee is a Public Administration or non-profit entity that allocates the dwelling to social rent with a monthly rent lower than that established in the rental aid program of the state housing plan, or to the housing of persons in a situation of economic vulnerability, or when the dwelling is under a public housing program or qualification by which the competent Administration establishes a limitation on the rental rent.
  • 90 percent bonus when the same lessor has entered into a new lease contract for a dwelling located in a stressed residential market area, in which the initial rent has been reduced by more than 5% in relation to the last rent of the previous lease contract for the same dwelling, once the annual updating clause of the previous contract has been applied, if applicable.

Finally, it is established as a right of applicants, purchasers or lessees of housing, to receive information in accessible format, which is complete, objective, truthful, clear, understandable and accessible, ensuring full knowledge of the conditions of the housing object of the transaction.

It also establishes certain basic requirements for real estate agents and the information or advertising to which operators must adhere.

For any questions about your rights, whether you are a tenant or a landlord, please contact our team of lawyers and economists, please contact our team of lawyers and economists.