New housing law in Spain: six facts you need to know

According to the new legislation, property owners are now required to pay agency fees, which may reduce the financial burden when renting out. Non-residents of the UK are facing restrictions on purchasing property in Mallorca. There are also plans to build social housing in tourist resorts. Real estate experts from Moving to Spain discussed the new Spanish housing law and provided some facts about it.

Regulation of rental prices:

Rental prices in high-demand areas will be regulated based on criteria such as the consumer price index (CPI) and income distribution for rent. In these areas, rent limits will depend on the number of properties owned by the landlord.

Introduction of a rent control index:

Starting in 2025, the rent control index will replace inflation as the basis for limiting annual rent increases. However, until that time, there is a temporary cap on rent increases tied to the CPI. This will benefit tenants, as prices will not rise exponentially from year to year.

Now, the agency fees are paid by the property owners.

Good news for renters! Property owners are now required to pay agency fees, which can reduce the financial burden of renting. Previously, agency fees in Spain often amounted to the cost of one month's rent or more.

Mandatory date and time of eviction:

Evictions are prohibited without a previously set date and time. The law provides for new eviction timelines and mandatory access to out-of-court dispute resolution procedures for vulnerable tenants.

Property tax IBI in the form of fines for vacant apartments:

The law allows municipalities to impose financial penalties on property owners who leave their properties unoccupied for extended periods. These fines will be collected as surcharges on the property tax (IBI). This law is intended to encourage owners to rent out their properties.

Tax incentives for property owners:

Starting January 1, 2024, property owners can take advantage of tax benefits, such as deductions from rental income.

Requirements for renting property in Spain:

The rental period is a minimum of six months. However, most contracts are long-term - usually one or two years. You will need to pay a deposit. This will be an amount equivalent to 1-2 months' rent. You need to provide documentation of your income. The landlord may ask for a document confirming that you have sufficient monthly income to pay the rent without issues. You will also need documents proving that you can rent housing in Spain. Some landlords are more flexible than others, but the most common documents are: NIE - the identification number assigned to each foreign resident in Spain; an employment contract or a training certificate and/or references from third parties.

Alison Johnson, the owner of Moving to Spain, commented on the requirements for renting property in Spain, as well as common rental scams and how to avoid them. "Searching for a rental apartment in Spain can be stressful, especially if you are a foreign expat who has just arrived in the country. Among all the documents, procedures, and conditions, finding a place to live can be a challenge. That's why we have put together a small guide to help you navigate everything you need to know about renting housing in Spain as a foreign expat and signing a fair contract."