Moncloa legislation reduces security of tenure in Spain

The International Property Rights Index (IIDP) shows that Spain's score in the IIDP ranking places the country 26th out of 37 developed economies. Spain thus lags behind the leading countries in terms of property protection. Spain is 8.3 percentage points below the OECD average and 6.8 percentage points below the average score received by OECD and EU member countries.

Compared to Finland, which has the best IIDP score, Spain has a score 28.5 percentage points lower. Gregorio Isquierdo, Director General of the Institute for Economic Research (IEE), presented this information and the report "Private Property in Spain. The need to recognize property rights in housing. Index of Rights''Property 2020', which notes that property rights "are an inalienable right and the foundation of modern societies".

The document points to new housing laws as one of the factors reducing the protection of private property in Spain. "These housing measures create uncertainty and legal ambiguity," notes Gregorio Isquierdo. "The problem with measures such as price controls, eviction bans or confiscation is that, by violating private property, they create uncertainty and legal uncertainty, and can permanently undermine confidence in the market, leading to a proliferation of negative effects even after their completion," notes IEE. "Measures should be taken that address the true cause of the problem, a''it is precisely the lack of supply of rental housing,' he adds.

Measures against property IEE identifies "some threats" to property rights in the Spanish economy, which are mainly linked to the housing sector: on the one hand, the Right to Housing Bill seeks to control rental prices. According to the IEE, rent price control is a measure of very questionable constitutionality that not only fails to improve access to the rental market, but is also counterproductive, as it reduces supply in terms of volume and quality, stretches prices in unregulated zones and worsens the efficiency of resource allocation, thus making access to rental housing more difficult, especially for the lowest income groups who''is supposed to be upheld.

On the other hand, the IEE mentions the decree on protection against eviction.

"To stimulate supply, a simple, stable and predictable regulatory environment that provides certainty and legal protection, and that does not create an asymmetrical relationship between landlord and tenant, is key. In addition, private initiatives can also be supported through tax incentives for the construction of rental housing, as well as through the provision of affordable public land," notes Gregorio Isquierdo. "On the other hand, attention can also be paid to the promotion of social housing through public-private partnership schemes that provide effective''governance and lower costs for the public sector,' he adds.

The importance of registrars

In Spain, the Property Registry is one of the main guarantors of property rights, since through its work it ensures legal protection, transparency of information and ease of transfer of property. The main objectives of the Property Register are to secure real estate, to protect real estate, ensuring the legal movement of real estate, and to promote the confidence of economic agents in real estate as a guarantee of financing transactions, reducing the risks in contracts that have the object of real estate, through the information contained in its books, so that whoever trusts the contents of these''books, will be protected.

The IEE considers that the Spanish system of Property Registers is fully "reliable and assured", which is evident in the Ranking of the Property Registers sub-index of the Property Rights Index, in the aspect of physical ownership, where Spain significantly outperforms the OECD average, namely by 3.3 percentage points, and its superiority is even greater, by 5.6 percentage points, in relation to the European average. Spain is thus highly ranked, reflecting the high quality of the Property Registers.

IEE emphasizes that in recent years the Spanish registration system has introduced many innovations that have improved the level of legal security protection and become efficient''an instrument of cooperation with public administrations, improving areas such as urban planning, environment, digitalization, consumer protection. "It is advisable to continue working in this direction to improve and modernize the Registration Institution in Spain, taking advantage of new technologies," notes the IEE. "Among them, the harmonization of real estate information advertising of Member States should have been promoted, creating a European model of simple recording. Real estate advertising in the European Union, similar in all countries, will contribute to the strengthening and development of the internal market and legal system that are evolving," it adds.