Spain’s New Housing Law Grants 70 Percent Tax Deduction For Landlords Renting To Young People
Spain News
Published: 25 April 2023 16:36 CET
The new housing law that the plenary Congress plans to approve this Thursday, April 27, is a significant step towards addressing the current housing crisis in Spain. The law aims to promote affordable housing rentals by offering tax incentives to landlords who rent out their properties at lower prices, especially to young people and vulnerable individuals.
Under the new law, landlords will be able to claim a tax deduction of up to 90 percent on rental income from properties located in stressed areas. To qualify for this deduction, the landlord must lower the rental price by more than 5 percent in the new contract for a home located in a stressed area, compared to the price of the previous contract, after applying the annual update.
For new rentals of homes for young people between the ages of 18 and 35 years, the tax deduction is 70 percent. This deduction is also applicable when the tenant is a public administration or a non-profit entity that allocates the home for social rental with a monthly rent lower than that established in the rental aid program of the state housing plan or accommodation for people in vulnerable situations.
Moreover, homes that have been rehabilitated in the two previous years will be eligible for a 60 percent deduction. The goal of these deductions is to encourage landlords to offer their properties for rent at affordable prices, thereby reducing the pressure on the rental market and providing more housing options for those in need.
It is worth noting that these deductions will only apply if the landlord complies with certain requirements. For example, landlords cannot require the advance payment of more than one monthly rent, as stipulated in section 6 of Article 17 of the Urban Leasing Law. Also, the new modulation will only be applicable from January 1, 2024, so landlords must ensure they meet the eligibility criteria to benefit from these tax deductions.
Overall, the new housing law aims to provide a more favourable environment for the rental market in Spain by promoting affordable housing rentals. The tax incentives provided by the law are expected to encourage more landlords to offer their properties for rent, thereby increasing the availability of housing for young people and those in vulnerable situations.
Sources
https://www.20minutos.es/noticia/5121992/0/la-ley-de-vivienda-que-se-aprueba-este-jueves-permitira-a-los-caseros-desgravarse-un-70-en-el-irpf-si-alquilan-la-vivienda-a-jovenes/
