According to some sources, there are currently around three million rental properties in Spain lying empty. This is a significant number and it reflects unwillingness on the part of owners to rent out properties, rather than a shortage of people willing to rent them.
The main reason for landlords’ reluctance, especially when the ‘crisis’ hit and tenants found it increasingly difficult to meet rental payment obligations, was that in Spain legal rights were skewed in favour of the tenant. As a result, when ‘horror stories’ started to circulate of owners not being able to evict non-paying tenants many, understandably, took their property off the rental market.
Other factors creating a downturn in the rental market are perhaps less discussed, such as landlords charging unrealistic rents in order to recoup the high property costs during the boom years.
Now the Spanish government has issued a new draft law to address these issues within the rentals market, and it has the intention of passing it before the end of year. The main points of the new law are:
Key points for landlords:
- Tax breaks on declared rental income for non-residents
- Power to recover the property with only two months notice, providing it is the landlord or a member of his family who is moving in to the home
- An easier eviction process
- Agreements between landlord and tenant on rent rises and options to buy
Key points for tenants:
- Ability to terminate a contract with only one month’s notice without incurring a penalty, i.e. losing the deposit
- More protection for the tenant in cases where the landlord wishes to sell the property
The Junta de Andalucía is also discussing new regulations for private holiday rentals and will include a compulsory registry of short-term rental properties. An updated draft set of regulations for
ppeared in June 2014 but has not yet been finalised.
At Perez Legal Group we welcome enquiries about your legal position from homeowners who are considering renting their properties on either a short term or long term basis; the new measures being imposed right now should give owners the confidence to return to the rental market again soon!