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Key points of the new housing law 2023 in Spain

May 2, 2023

The new law has not yet entered into force and for the moment everything remains the same. Below, we present the most relevant information you need to know and how this new housing law will affect you concerning the rental of your propertys.

On February 1t, 2022, the Council of Ministers presented an initiative for  legislation related to housing, which finally managed to win consensus this April 2023. This law focuses mainly on the real estate rental sector and will include aid for access to housing, regulation of evictions and restrictions on rental prices in "tension areas". 

Below, we present the most important information about everything you need to know and how this new housing regulation will affect you.


What are the main measures of the Housing Law 2023?

New definition of “Large Owners”

A separation will be established between large and small owners. The first correspond to those persons or entities owning 5 or more properties, while the second correspond to those that own less than 5.

Rental price cap in tension areas

The law regarding the declaration of areas with real estate pressure requires a prior understanding. Each Autonomous Community, taking into the views of the City Council of the municipality to be examined, must determine if a special area is classified as "area of tension". There are two conditions: 

●       If the total cost of the rent or apartment mortgage, including utilities, is more than 30% of the median house hold income. 

●       If the purchase/rental price has increased at least 3 points above the annual variation of the CPI  in the last five years before. 

In addition, the area designated as a "area of tension" could range from micro zones to that of an entire Autonomous Community. 

Once the "areas of tension" have been defined, we must take into account the price caps that apply to them. With the New Housing Law 2023, rental prices will be limited to a maximum increase of 2% in 2023 and 3% in 2024. The percentage increases will no longer be linked to the CPI. Starting in January2025, a new rental price update index will be approved. 

Regarding the new rental contracts, limits will be created, regardless of whether the properties are owned by large or small owners. This legislation intends to restrict the prices established for rental contracts and will not apply in areas not considered to be of tension. 

This measure will vary depending on who owns the property and the type of rental: for small owners, the cost will be calculated based on the rental price in the previous contract; while large owners will be affected by a price containment index yet to be determined. 

It is also important to mention that in the new housing law 2023, it is expressly prohibited to increase the rental price by adding new expenses, such as community fees, Garbage tax, IBI (property tax), etc. In addition, the authorization for waivers contained in the Urban Leasing Law are deleted in the event of an agreement between the parties involved.

Payment of costs

To ensure that tenants' expenses are reduced, the law provides that real estate costs and fees for leasing a property will be paid by the owner, who is the one who benefits from the service provided by real estate agents to find a tenant for their rental apartment.

Some real estate agencies, like us, offer various services to owners and tenants which add value to their apartments and compensate for the cost incurred.

Tax benefits for owners

Tax incentives have also been mentioned for Land lords whose properties are located in areas of tension and which would allow them to reduce the percentage of tax on income deriving from their property rental. Although the details of such fiscal benefits have not yet been provided, under the 2022 Property Law, land lords would enjoy a tax relief of up to 90% of their income, if the rental price is reduced. In addition, discounts of 50%, 70% and 90% will be offered depending on the case, if owners rent to young people between the ages of 18 and 35, if it is a new contract with property improvements or if the property is located in so called tension areas. It is important that you keep informed about the new 2023 Property lawin order to make the best decisions for you and your family. If you have any questions, please do not hesitate to contact us. We are here to help you.


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