The property experts at Moving to Spain have outlined everything you need to know about Spain's new Housing law - from rental prices in stressed areas to tax incentives for landlords.
Six facts about the 2023 Spanish Housing Law.
Rental Prices will be regulated: rental prices in stressed areas will be regulated based on criteria like the consumer index (CPI) and income allocation towards rent. In these designated areas, price limitations on leases vary depending on the number of properties owned by the landlord.
Introduction of a rent control index: from 2025, a rent control index will replace inflation as the basis for limiting annual rent increases. However, there is a temporary cap on rental increases tied to the CPI until then. As a renter, this will benefit you as the prices won’t exponentially increase year after year.
Agency fees are now paid by landlords: Good news for tenants! Landlords are now responsible for paying agency fees, which can help reduce the financial burden when renting a property. Previously, agency fees in Spain often amounted to one month’s rent or more.
Mandatory date and time for evictions: evictions without a predetermined date and time will be prohibited. The law includes new extensions and mandatory access to out-of-court settlement procedures for vulnerable tenants.
IBI tax penalties for empty flats: the law allows municipalities to impose financial penalties on property owners who keep their property unoccupied for extended periods. Such penalties will be imposed in the form of surcharges on the real estate tax (IBI). This law is imposed to encourage owners to make their properties available for rent.
Tax Incentives for landlords: from January 1, 2024, landlords may benefit from tax incentives, such as deductions on rental income. In designated stressed areas, this deduction is up to 50 percent. Deductions of up to 70 percent are available if a new home is rented to individuals aged 18 to 35, aiming to promote affordable housing options.
Requirements for renting a property in Spain:
The rental contract will be a six-month minimum. However, most contracts are longer - usually one or two years.
You have to pay a security deposit. This would be an amount equivalent to 1 to 2 months’ total rent.
You need proof of your income. The landlord might ask for a document that proves you have a minimum monthly income that will allow you to pay the monthly rent without any problems.
You need documentation proving that you can rent in Spain. Some landlords are more flexible than others, but the most common documents are: a NIE, which is an ID assigned to every foreign resident of Spain; an employment contract or study certificate, and/or references from third parties.
Alison Johnson, owner of Moving to Spain has commented on the requirements for renting a property in Spain, as well as common rental scams to be aware of and how to avoid them.
“Finding an apartment to rent in Spain can leave you feeling frazzled - and even more so if you are an expat and you have just arrived in the country. Between all the documents, processes, and conditions, finding somewhere to live can be a challenge. As such, we have put together a small guide to help you with everything you need to know about how to rent in Spain as an expat - and get a fair contract.”