Rent increases in Spain restricted until end of June – but small landlords will be exempt
Owners of property in Sotogrande and elsewhere across Andalucia will have reason to note recent changes made by the Spanish Government, a Response Plan having been approved in the wake of the conflict in Ukraine and the associated economic fallout.
The plan – which was given the go-ahead by the Council of Ministers on Tuesday, March 29 – will generate 6,000 million euros in direct aid and reduced taxes for individuals and companies.
Alongside a 20% discount on fuel, the Government has put in place a rule preventing landlords from increasing rents by more than 2% until June 30 – a timeframe that may be extended depending on how events unfold in the weeks and months ahead.
It is important to note, however, that this Royal Decree Law applies specifically to larger property owners, defined as those that own more than 10 properties. If, then, you are a smaller landlord with fewer properties than this, you will not be subject to this regulation, and will therefore remain free to negotiate increases in rent of over 2%.
Concerns about property supply and the burdens on property owners
The property sector in Spain has been critical of the rent cap, voicing fears about the pressure exerted on the country’s rental property industry by insufficient supply and escalating prices.
The Association of Real Estate Agents of Valencia (Coapi), for instance, has described the policy as “inopportune”, given that “it does not contribute to encouraging owners to take new flats out on the rental market” at a time when rental properties are already proving hard to come by.
A similar rebuke of the rental restrictions was issued by the Association of Rental Housing Owners (Asval), which said that the Government had heightened the burden on the owners of property in the country. The association suggested that the focus should instead be on limiting “the increase in underlying inflation, to eliminate the most volatile elements, such as energy and unprocessed food.”
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