Spain has adopted the first real estate law

After two years of negotiations and disputes, the Council of Ministers finally approved the new housing law of Spain. The adoption of the law took place on February 1, 2022. After that, the bill will be sent to the Spanish Parliament. Now, for final approval, the text must be coordinated with the government's parliamentary partners, who have already announced the availability of amendments.

It should be remembered that this is the first law that is being introduced into the rental market on an international scale. With its help, the Spanish Government recognizes the competence of each of the autonomous communities in the field of housing, which will allow the autonomies to approve their own tools that they consider necessary to improve the effectiveness of the law.

In short, the above-mentioned resolution covers the following areas:

1. Advantages of reducing the rental price for so-called «small owners» (less than 10 residential premises in the property)

   There are three types of bonuses:

   • 50% discount for owners who rent out their own housing.
   • 70% discount if the property is rented for the first time by young people aged 18 to 35 years.
   • 90% discount if the rental is carried out in one of the so-called «tense zones».

2. The restrictions on rent for «key landlords» (individuals or legal entities owning more than 10 properties)

   In these properties, the rent must be adapted in accordance with the reference index of the area in which these objects are located. A period of 1.5 years is provided for adaptation in accordance with the index.

3. Increase in the tax on empty real estate, which should encourage its sale

   The Spanish Government will provide autonomous communities (upon request) with the opportunity to apply price controls in «tense zones». Thus, autonomous communities will be able to decide for themselves whether the IBI tax rate will be increased to 150% on real estate that has been empty for more than 2 years, provided that the owner has more than 4 real estate objects in one municipality.

4. Regulation of eviction procedure

   It is planned to improve communication between social services and judicial authorities to make their work faster and more efficient. It is planned to increase the period from 1 to 2 months for the start of the eviction procedure if the owner of the property is an individual, and from 3 to 4 months if the owner is a legal entity.

5. Public rental in new residential projects

   New housing projects should include a reserve of 30% of housing intended for public housing (and 15% for social hiring).