New Housing Law 2023 in Spain

On February 1, 2022, the Council of Ministers proposed a new housing law in Spain, but it was not until April 2023 that an agreement was reached.

This new regulation aims to regulate different aspects of the real estate sector, focusing especially on the leasing of real estate and including measures that help access to housing, the regulation of evictions and the limitation of prices in some areas.

Expansion of stressed areas in the rental market

Each Autonomous Community will have the power to declare a neighborhood or municipality as a stressed area and the new regulations facilitate the conditions for them to do so.

For an area to be declared a stressed area, one of the following conditions must be met:

That the average cost of the mortgage or rent plus basic expenses and supplies exceeds 30% of the average household income.
That the purchase or rental price of the home has increased at least 3 points above the CPI in the five years prior to the declaration of a stressed area.

New definition of large holders

A person who owns five or more properties will be considered a large holder. The rest of the owners with fewer properties will be considered small holders.

This definition influences some aspects such as the way of regulating the rental price in stressed areas and access or not to tax benefits for owners.

Limit of the annual update of the rent eliminating the CPI

Until now, the rental price update limit was 2%, something that as of 2024 becomes 3%, being decoupled from the CPI.

creation of a new reference index with which all rents will be updated is planned for 2025.

Regulation of rental prices in stressed areas

The prices of all new rental contracts will be regulated and capped with the aim of containing and reducing the price in the areas declared as stressed and will not apply to those that are not.

The limits depend on the type of owner and the type of contract:

Small owners: it will depend on the rental price of the previous contract.
Large holders: by applying the new index that is intended to be created.

With this new regulation they also want to include new homes in stressed areas, whose price will be limited by each Autonomous Community.

Obligation of the landlord to pay the real estate commission

In general, the commission of the real estate agency that was in charge of mediating the rent had to be paid by the tenant. This amount amounted to 10% of the amount of the annual rent plus VAT.

With this new law, the real estate expenses and fees derived from the rental of the property will be borne by the owner and not the tenant.

Prohibition of agreement between parties contrary to the Housing Law

From the entry into force of the new regulations, clauses that allow the non-application of the law may not be added to the rental contract, even if there is an agreement between the parties.

New protection measures against evictions

This new Law is intended to increase protection against evictions:

It will be mandatory to establish a date and time for evictions, and none can be carried out without a predetermined date.
The launch processes are postponed for more than two years due to the inclusion of new extensions.
Obligation to resort to out-of-court settlement procedures for vulnerable people.
The Autonomous Communities may have their own mediation and alternative housing mechanisms.
It is allowed to use state housing funds to offer housing alternatives for people at risk of eviction with subsidized social rents or rehousing people.

Tax benefits for owners

In this case, there are distinctions between the types of owners. For children who have a property in an area that has been declared stressed, tax incentives will be applied in the IRPF so that they can put the house up for rent and compensate for the limitation on price increases for new lease contracts.

The new Housing Law intends to include important developments in real estate regulation, mainly in rentals. Firstly, it allows the Autonomous Communities to declare neighborhoods or municipalities as stressed areas as long as certain requirements are met. In these areas the rental price will be limited for new contracts. Regarding the updating of prices, it may not exceed 3% and is disassociated from the CPI. In addition, from now on, the owner will be responsible for paying the expenses corresponding to the real estate agency and issues contrary to the law cannot be agreed upon. On the other hand, new measures are included for the protection of evictions.

Further information

This article is part of our service Real Estate Lawyer in Spain. Visit this section where you will find all the useful information on this topic, including a complete guide on How to buy a house in Spain.

Solve your doubts

✅ Our staff speaks perfectly Spanish, Valencian, English and German with what will be able to communicate with us in your own language and thus clearly resolve your queries.

📍 Denia – Plaza del Convento, 6 – Mezzanine floor door B
📍 Valencia – Calle Creu Roja, 1 – Block 6, Floor 1, door 10 (* only by appointment)

✉📞 Contact: info@firmalex.com – Tel. +34 966 421 416 – Whatsapp +34 622 497 615