MADRID, 15 Mar. (EUROPA PRESS) –
The Official State Gazette (BOE) published this Friday the reference price index to limit rental income in areas declared as stressed and has also published the declaration of stressed areas for 140 municipalities in Catalonia, so it can begin to apply in said autonomous community starting tomorrow when it comes into force.
Both ministerial resolutions, signed by the Secretary of State for Housing and Urban Agenda, David Lucas, and which will take effect from tomorrow, are published in the BOE after the index has received a total of six allegations but none have been accepted, and that the Generalitat of Catalonia has corrected in its official bulletin the declaration presented last August, a “necessary” step to declare the 140 Catalan municipalities as stressed areas.
The index is part of a commitment acquired by the Government through the Housing Law approved last May, which states that the Executive could limit rental prices in those areas previously declared as stressed areas through a system of reference price indices.
This reference system is a system of price ranges that, for the same home, establishes a maximum and minimum rent based on a series of characteristics of the property. In addition, it is a homogeneous system for all of Spain, with a tax base and that will be updated annually with the latest declaration of the disposable income of the property owner. For this year, use the 2022 return.
In the State Reference System for Housing Rental Prices (SERPAVI) –commonly known as the Reference Price Index–, the setting of the maximum rent limit for new housing rental contracts will be carried out in accordance with the online application that is accessed through the Internet portal of the Ministry of Housing, taking the upper value of the range of individualized values that result from the location and the different characteristics of the housing subject to lease.
MANDATORY COMPLIANCE FOR LARGE HOLDERS
The reference price index is mandatory for large holders – individuals or legal entities with more than ten homes or five in the same stressed area, as established by each autonomous community – and for new rental contracts of homes that have not been rented in the last five years and are located in areas that have been declared stressed.
In the rest of the cases, the index will only serve as a reference to know the real value of the rental home, since, in homes already rented, the new rental contract “will be referenced to the previous contract”, that is, it will be will freeze the rent, once the annual update clause is applied, which in 2024 is limited to 3%, so the price can only decrease through negotiation between the landlord and tenant.
However, the price may increase if the home has been improved, if it has energy rehabilitation or if it meets conditions of durability of the lease contract higher than what is contemplated in the Urban Leases Law (LAU), as stated in the Housing Law.
VALIDITY OF THREE YEARS AND WILL NOT APPLY TO EITHER THE BASQUE COUNTRY OR NAVARRA
The rental limitation will be extended for three years, since this is the period in which the declaration of stressed area will be in force, once officially published.
However, this declaration may be extended annually once the three years have elapsed, but as long as “the circumstances that motivated such declaration subsist and after justification of the measures and public actions adopted to reverse or improve the situation since the previous declaration.” , as explained in the Housing Law.
On the other hand, neither the Basque Country nor Navarra will be able to opt for this system at the moment, since they are communities with different tax regimes, so the Ministry has not been able to have access to the income – the basis of this system – of the owners of these territories. However, Lucas indicated that “work is being done” to develop the index in both communities.
CATALONIA, THE ONLY COMMUNITY WHERE IT WILL BE APPLIED
However, this rental price control system will only work in those autonomous communities that have declared tension zones and, for the moment, the only one that has done so has been Catalonia, where it will be applied in 140 municipalities of the community.
Therefore, with the publication this Friday in the BOE of the processing of the declaration of a stressed area of Catalonia and the reference price index, this community will be able to begin to apply the rental limit in the 140 municipalities declared a stressed area using said index.
Likewise, the Ministry of Housing assures that other territories, such as Asturias or Navarra, have expressed that they would like to establish the index in their territories, although they have not verbalized it to the Ministry nor have they explicitly requested it.
AN INDEX THAT IS NOT CONVINCING
After the presentation of the index, the Federation of Real Estate Associations (FAI) and real estate portals such as Idealista, Fotocasa or Pisos.com have expressed their doubts and their rejection of this reference system to limit rental prices, predicting that it will cause the withdrawal of housing from the rental market and will further increase prices.
In the political bloc, Sumar and Podemos have also expressed their distrust of the index, emphasizing that it will “only” have an effect on the highest prices and will not allow “significant” drops in rental income, while the Minister of Labor and Social Economy, Yolanda Díaz has asked not to stay “halfway” and to “regulate the housing market.”
Regarding the criticisms and accusations, sources from the Ministry of Housing and Urban Agenda have denied that this index is going to increase rental prices and have stressed that the ranking system seeks to ensure that homes “with less value” cannot increase their price by be compared with higher quality homes in the same area.
In addition, the Ministry reminds owners that when a new contract is signed in a stressed residential market area, with a reduction of at least 5% on the rent of the previous contract, a deduction in personal income tax of up to 90% of the income received from the rental, which is reduced to 70% when renting for the first time in stressed areas to young people between 18 and 35 years old in said areas.
