During this year, significant changes were implemented in the Spanish Rent Law. This directly impacts the real estate market and the rights of both landlords and tenants. If you want to know in detail the key aspects of the new Rental Law and how it affects your tax return, read on. Discover the most relevant changes and get valuable information to make informed rental decisions, let’s go!
How does the Housing Law or Rent Law impact housing?
Lease contracts must consider several concepts after the implementation of the Law for the Right to Housing. The latter was recently published last May 26 in the Official State Gazette (BOE).
As mentioned above, the concepts to be considered include stressed zones, price caps, large holders and price containment index.
The Rent Law generated controversy even before its publication. The Popular Party requested its repeal before Congress. However, this proposal was paralyzed due to the early general elections on June 23rd.
Even so, the Popular Party will propose its annulment because they consider that it contains “interventionist and dirigiste measures contrary to individual freedom”.
Also, much of its implementation is left to the discretion of the autonomous communities. These, for the most part, are in the hands of the PP and have announced their intention not to proceed with the law.
It is important for both landlords and tenants to be aware of changes in the Rent Law. These impact lease extensions, rent increases, payment methods, eviction procedures and price limits on leases.
Understanding the concept of “stressed areas”
The autonomous communities and municipalities are responsible for declaring stressed areas. These would be the neighborhoods or municipalities where there is a high risk of housing shortage for the population. This being the case, this declaration of the Rent Law will last for three years before being renewed annually.
That said, declaring an area as stressed is based on two conditions:
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How does the regulation of lease extensions work?
With the Rent Law, current tenants have the possibility to apply for an exceptional extension of up to six months. And it is only for usual rental contracts ending before June 30, 2023.
The aforementioned measure is included in Royal Decree-Law 20/2022. This introduces temporary measures related to urban leases.
According to the new wording of the Rent Law and the Urban Leases Law, these guidelines must be followed to terminate a lease:
- If the landlord fails to give four months’ notice (two months for the tenant), the lease will be automatically extended for annual periods up to a maximum of three additional years.
- The tenant has the option to decide each year whether or not to renew the contract.
- If the property is located in a high demand area, the tenant will have the possibility to defer the lease again for annual periods. This will be limited to a maximum of three years.
These provisions of the Rent Law provide flexibility to both the landlord and the tenant. Especially at the time of termination of the lease, allowing for renewal or postponement in specific situations.
Important clarification for those implementing this Rent Law measure
The landlord is obligated to accept this extension, regardless of whether he is considered a major tenant or not. However, the landlord has the possibility to avoid the extension of the lease and repossess the dwelling. This only occurs upon meeting the deadlines and requirements of Article 9.3 of the Urban Lease Law.
This article establishes that the owner must give notice within the established time limits of his need to occupy the rented dwelling for use:
- Permanent own.
- Of their first-degree relatives by blood or adoption.
- For your spouse in the event of a final judgment of separation, divorce or marriage annulment.
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How is rent adjusted in the absence of CPI?
The entry into force of the Rent Law brings with it a significant change: the updating of rental prices. This will no longer be linked to the CPI. This measure represents an important modification in the system for adjusting rental prices.
However, for current contracts, during the year 2023 you will be allowed:
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The changes introduced in the Rent Law for the year 2023 have generated a significant impact on the real estate market in Spain. These modifications directly affect the income tax return and establish new regulations for lease contracts.
Do you need real estate advice and professional support to make sure you comply with these regulations? Our team of experts is ready to help you. Contact us at tasconsultoria@tas-sl.es. Let’s work together to secure your rights and reach a favorable agreement with the new Rent Law measures.
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