Up to €250 per month for two years: new subsidies for young tenants

MADRIDOn Tuesday the Spanish government approved a new series of housing measures. The star project, the state housing law, was put on hold after the judiciary did not approve the first report on the law; however, the executive has approved two other measures to facilitate access to housing, especially for young people: the young tenant grant and the state plan for access to housing 2022-2025, endowed with €1.7bn.

On the one hand, the Cabinet has approved the young tenant grant, announced in October by Pedro Sánchez. It is a monthly aid of €250 for young people aged between 18 and 35 and budgeted in the 2022 State Budget with €200m. It will not be compatible with other similar benefits given by regional governments or city councils, but it can be complemented with aid from the state housing plan, according to sources from the Ministry of Transport. However, this subsidy will still take "a couple of months" to become effective, as explained this Monday by the Minister of Transport, Raquel Sánchez, because once approved by the Council of Ministers it will have to negotiate with the regional government (except Navarre and the Basque Country) the final budgetary distribution by regions. However, it will be a retroactive grant and, therefore, can be collected from January 1, Sánchez added. Pending the details, these are the main lines of the regulation.

The keys to the tenant grant

Who will be able to enjoy it?

Young people aged between 18 and 35 who can prove that they live in rented accommodation. They will need to show a lease contract in their name and prove that they have income because they are working. This income, however, may not be more than three times the public indicator of multiple effects income (IPREM), that is, about €24,300 per year, sources from the Ministry of Transport explain to ARA. However, this threshold could go up to 32,400 euros if the person receiving the aid has to move to another city because of work and rents are more expensive.

Rent under €600

In order to access the aid, however, the maximum rent may not exceed €600 per month. In regions where rents are higher, such as Madrid or Catalonia, regional governments could raise the limit to €900. This "flexibilisation" had been requested by Catalonia.

However, there will be exceptions in the case of renting a room. To receive the aid, the maximum price of this room may not exceed €300, although the regions may extend the limit up to €450 in the case of areas with very high prices such as Madrid, Barcelona or Seville. The subsidy will continue to be €250.

In order not to duplicate benefits, those young people who already receive some aid established by regional governments or city councils will be excluded from this rent bonus. On the other hand, it can be complemented with the minimum vital income and the aid for access to housing included in the state housing plan, according to ministry sources explained to ARA.

How long can tenants receive it for?

Each person will be able to receive the aid during a maximum of two years and will have to use it exclusively to pay rent, so the tenant will have to justify that they have used the money to pay the rent. Thus, if a person pays €200 in rent, he/she will only receive this money. The Spanish government has estimated that the aid will reach around 70,000 young people. According to the National Institute of Statistics, there are almost 600,000 low-income renters in Spain under the age of 35.

New state housing plan

However, this Tuesday's council of ministers has also approved a state plan for access to housing for the next four years, that is, until 2025. This plan, which is budgeted with €1.7bn, includes aid for housing, but also the new insurance for non-payment of rent announced in November by the Minister of Transport, Raquel Sanchez. This insurance will be limited by the income of the beneficiaries (it may not exceed three times the IPREM) and by the maximum price of the housing, which will be negotiated with regional governments. It will be a policy that will guarantee the payment of rent for a maximum of one year and may not exceed 5% of the annual price of the property.

Waiting for the CGPJ

On the judiciary's decision to prepare a new report on the state housing law, after the plenary rejected the one proposed by the member proposed by the Socialists, the Minister of Transport has expressed her confidence in approving the regulation "soon". "The law will have all the guarantees," said Sánchez at a press conference after the Cabinet meeting. Unidas Podemos does not want the decision of the Judiciary to modify the current text, while Sánchez has recalled that "it is a perceptive text, not of obligatory compliance". In fact, Moncloa sources explain that "nobody within the government is considering modifying the text".