The new housing regulation
The draft Housing Law has recently been approved, which establishes a mechanism – at the disposal of the Autonomous Communities and City Councils – to be able to reduce the price of rents. This mechanism is based on the identification of so-called stressed areas. The qualification as a stressed area will depend on different indicators such as, for example, that during 5 years the price of rent has increased 5 points with respect to the Consumer Price Index (CPI).
Some measures to reduce the price of rent in stressed areas are the updating of the rental price exclusively to the CPI or the granting of tax incentives consisting of the possibility for the landlord to deduct up to 60% of the amount received as rent in his Personal Income Tax (IRPF), without prejudice to further reductions depending on the specific circumstances of each case.
Other new features include the obligation to set aside at least 30% of newly developed housing as subsidised housing, and the possibility for local councils to impose a surcharge of up to 150% on Property Tax (IBI) in order to prevent the existence of empty homes by large landlords (individuals or legal entities that own more than 10 urban properties).
We will have to wait a few years, if the draft bill becomes law, to assess its impact on the market and verify whether these measures achieve the proposed goals.