Spain's Prime Minister, Pedro Sánchez, announced on Monday a royal decree-law that will introduce measures including tax breaks for landlords who do not increase rents when contracts are renewed, rules to curb “fraud” in short-term lets, and limits on the “abuse” of room rentals.
“It’s straightforward: we will back those who provide decent housing and crack down on those who speculate,” the Prime Minister said during a visit on Monday to the demolition of the first buildings of the Campamento barracks in Madrid, where 10,700 affordable homes are planned.
The first measure offers landlords full tax relief – 100% of personal income tax (IRPF) – to offset what they would earn if they raised rents on renewing tenants’ contracts. “This is a win for everyone,” he added.
The second measure will restrict seasonal rental contracts to tackle “the clear abuse that is taking place,” Sánchez explained. The government will set strict criteria for a contract to qualify as seasonal and introduce penalties for landlords who flout the state’s short-term rental rules. “Sadly, our cities are becoming full of seasonal contracts that force people to renegotiate and live in constant uncertainty, with no justification other than speculation and greed. We will not allow it,” he said.
The third measure aims to rein in room lettings. “We have recently seen a worrying trend: entire flats being converted into room rentals purely to boost income,” the Prime Minister said. The government plans to extend standard tenancy protections to room rentals. New agreements must meet two requirements: the total rent for all rooms cannot exceed the rent for the entire flat, and in designated high-demand areas, rent control rules under the Housing Act will apply.
“Alongside continuing to build more homes, as we are doing here with ‘Operation Campamento,’ we will keep intervening in the rental market. Some are exploiting housing to get rich without scruple, at the cost of hundreds of thousands of families. We will not stand by,” Sánchez concluded.