The concept of incentivised affordable housing is also being introduced to increase supply in the short term.
Spain’s new housing law which imposes new limits on rent increases and evictions will come into force today – Friday, 26 May.
The Official State Gazette (BOE) published the new law on Thursday, 25 May, but outlined that new tax incentives applicable to personal income tax on the leasing of property for housing will come into force on 1 January 2024.
It is the first state housing law in the history of democracy and will impose new limits on rental increases throughout Spain. Large landlords will be considered as having five properties, down from 10, while eviction dates must be communicated to tenants in advance, under the new law.
An improvement in the regulation of personal income tax (IRPF) is established among the new measures, to determine the rental of permanent housing at affordable prices. A 50% reduction will be established for new rental contracts, which may be increased according to certain criteria.
The concept of incentivised affordable housing is introduced to increase supply of housing in the short term. This involves granting tax or urban planning benefits in exchange for privately owned housing to be rented at reduced prices for people whose income level does not allow them to access housing at market prices.
The law also provides for the promotion of subsidised housing for rent at a limited price. A minimum of 50% is established for rental housing within the land set aside for subsidised housing.
In addition, the percentage of land set aside for subsidised housing is increased from 30 to 40 per cent in land for development (new development) and from 10 to 20 per cent in unconsolidated urban land (reform or renovation of development).
The law also establishes the creation of a housing advisory council, to ensure the participation of all agents in the drafting and development of housing policies.