The housing crisis in Spain, affecting both rentals and house purchases, has led the Government to propose changes which will affect citizens from outside the EU who have rental properties and those who want to buy a property.
The high cost of rental and properties for sale means many residents in Spain are locked out of the property market. This especially affects young people and the estimated age of young people becoming independent is in the 30´s.
Some 77% of experts in the housing sector agree that the lack of properties on the market is the main factor in the housing crisis; 48% believe there is a lack of adequate legislation; and 51% believe speculation on the housing market by people from outside the EU is to blame for the rise in prices. When questioned 93% of experts point to the tourist rental market as the main cause of the lack of available properties for rental in tourist areas.
This crisis has led the Governemnt to propose more public housing protected from speculation including; cutting red tape and bureacracy in sales and rentals; putting limits on rental prices; providing assistance with mortgages; and new laws to assist those facing viction.
However, some of the changes proposed to cut speculation on the property market and tackle the problem of illegal rentals in the tourist sector may affect some citizens from outside the EU.
These proposals are:
To limit the purchase of properties in Spain by citizens from outside the EU by increasing the tax on house purchases by up to 100% .
To toughen up the regulation on fraud on temporary rentals (rentals to tourists) and create a fund for regional and municipal authorities to reinforce inspections of illegal touirist rentals and other fraudulent uses of property.
To propose an exemption of 100% on income tax for property owners who rent their property in line with the Index of Price References, wherever that property is located.
These proposals will have to go through Congress and get a majority vote before they become law.
Watch this space!
