by HabitaRetail 
Within the framework of the initiative to guarantee the right to decent housing as stipulated in the Constitution, Law 12/2023, of May 24, 2002, on the Right to Housing, was enacted. This law, which has gone through several stages of approval throughout 2022 and 2023, is part of the Recovery, Transformation and Resilience Plan, and its main objective is to address the difficulties faced by the most vulnerable groups in terms of access to decent housing.
Only a few weeks after its implementation, this new regulation has generated doubts and queries from property owners, especially regarding the tax aspects and the new limits imposed on the rental price. Below, we break down the highlights of this law and how it impacts both tenants and landlords.
Implications for Owners
Tensioned Zone
- Definition and Delimitation: Stressed zones will be those areas with very high demand, and it will be the task of the Autonomous Communities and municipalities to define these zones. To be considered as such, the average housing expenditure (including basic supplies) in that area must exceed 30% of the average household income.
- Landlord Obligations: Landlords owning more than 5 rental units must reduce rental rates in these stressed areas.
Rental Price Cap
- Year 2023: During the year 2023, landlords may not increase the rent by more than 3% per year.
- As of 2024: A new reference index will be introduced for the annual update of rental contracts that will replace the CPI, thus avoiding disproportionate rent increases.
Tax Incentives
- From 2024: Tax incentives will be established for landlords who offer rents at reduced prices, with a 90% reduction in personal income tax on the net yield. In addition, a 70% deduction on the net yield is offered for housing rented to young people between 18 and 35 years of age in stressed areas.
Real Estate Management Expenses
- From May 2023: Owners will be responsible for covering real estate management fees and contract formalization costs.
General Measures of the Law
- Expansion and Strengthening of Public Housing: Includes the regulation of public housing parks to prevent their sale to investment funds, and guarantees a minimum period of 30 years of protection for subsidized housing.
- Limiting Rent Increases: Establishes measures to limit rent increases, especially in stressed areas, and offers tax and urban planning benefits for rental housing at reduced prices.
- Protection against evictions: Improves protection against evictions, especially for individuals in vulnerable situations, by establishing conciliation and mediation procedures.
This new law amends Law 1/2000 of January 7, 2000, in order to establish a set of rules to protect tenants in situations of vulnerability, facilitating their access to social and affordable housing and regulating eviction processes. In addition, with the implementation of this law, a significant expansion of the public housing stock at affordable prices is expected.
However, landlords must also be prepared to adapt to new regulations, which include rent price limitations, tax incentives and new responsibilities in terms of property management expenses. In order to comply with these new regulations, they are advised to inform themselves adequately and adjust their current rental practices in accordance with the provisions of the law.
