The Government considers the new housing law “historic” and defends that it will mean the end of property bubbles

The Council of Ministers approved this Tuesday to take the Congress of Deputies the new one Housing Actwhich he considers “historic” as a way to prevent this from happening again in Spain real estate bubbles. The Executive defends that the new legal framework for rent will guarantee greater access to decent housing for the entire population in Spain. The Minister of Territorial Policy and Government Spokesman, Elizabeth Rodriguezthe Minister of Transport, Mobility and Urban Agenda, Rachel Sanchezand the Minister of Social Rights and the 2030 Agenda, Ione Belarra, appeared at a press conference on Tuesday after the Council of Ministers to report on the adoption of the Housing Act, which includes price control mechanisms for the first time. The Government is of the opinion that the approved legal framework does not regional forces and represents a step forward in guaranteeing citizens’ right to housing. Raquel Sánchez assured that the government included changes based on the observations of the General Council of the Judiciary to improve the regulatory technique and achieve a “historic” law that “does not go against the law of property or owners, but rather against speculation. ” The judicial body last Thursday approved a report in which it said housing “is a matter of regional ownership” and therefore questioned the legality of the new law.

For Belarra, the law should leave “the urban development balls” behind and presuppose the first steps to “leave the property bubbles behind” and evictions. The requirements to execute evictions will increase, with greater coordination with the judges and housing alternatives will also be required to be able to execute them.

Belarrra recalled that rents rose by 50% between 2015 and 2020, benefiting investment funds and large homeowners living on rents. “The coalition government had an obligation to put order in that situation”, protect tenants and make it easy for small landlords.

The autonomous communities will be able to manage prices in particularly stressed areas, Belarra recalls. The creation of a public housing stock that contributes to the reduction of rental prices will also be promoted. Belarra defined the law as “very urgent,” although he acknowledged that he still did not have a majority in Congress. The law will be processed by emergency route but Raquel Sánchez acknowledged that the possibility of reducing the expected 18-month application deadlines involves “complexity”. Within this maximum period, the amounts of this maximum rent should be determined and the definition of stressed areas or areas with rental income to be reduced. In two days, it will be necessary for the Government to get support before the vote in Congress.

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The Government intends to fiscally stimulate the rental of residential housing in an affordable way with deductions that will go from 50% to 90% in the Personal Income Tax (IRPF). In the tense areas where the landlords reduce the rent by 5% compared to the previous contract, the bonus will increase to 90%. The deduction will be 70% if it is rented for the first time to young people between 18 and 35 years old in these stressed areas. If rehabilitation or improvement work has been carried out on the property, the bonus will be 60%.

Owners who sign a contract of at least 10 years will be able to get rid of the price freeze in areas with stress and will be able to increase the rent by up to 10% in exchange for extending the duration of the contract. In addition, the tenant in these areas will be able to extend their contract for another three years than currently envisaged, with the same conditions, ensuring that the rent only increases with the CPI for a longer period. However, there will be an 18-month moratorium from the adoption of the law until the reference index of prices in the stress areas applies.

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