Evictions of vulnerable people suspended until 2030 and extension of rents: the keys to the decrees

MadridWhile waiting to know the definitive texts of the two housing decrees that the Spanish government approved this Tuesday – the Minister of Housing herself, Isabel Rodríguez, has acknowledged that they were open until the last moment –, these are the keys to the main measures.

Evictions

Some evictions of vulnerable families—who must provide proof—without alternative housing are prohibited until 2030. Until this Monday evening, the text made a distinction between a large investment fund (evictions are suspended automatically) and an individual. In this second case, the judge must stop the eviction if the competent administration has not been able to offer alternative housing. Furthermore, it would be this administration that would compensate the owner.

However, there are still some nuances to be specified: the review that the judge must conduct and whether the eviction affects an owner who has one or two properties. In this latter case, their "economic vulnerability" would prevail over that of the tenant.

Extension of contracts

The extraordinary extension of current contracts is recovered until December 31, 2028. The landlord may be asked for a rental extension of up to two years (it must be reviewed annually) on the condition that rent payments are up to date or if the rent has been paid for the 8 months prior to the request for the extension. The landlord is obliged to accept the extension if an alternative agreement is not reached, a new contract is signed, or the need to recover the property has been communicated.

In the second decree, the "automatic renewal of leases" is provided for. This responds to the demand of the Tenants' Union, but also of left-wing parties, to approve indefinite rental contracts.

Definition of 'vulture fund'

The Spanish government has ensured that an end is put to "speculative" purchases by large investors and it is very well defined what a vulture fund is. Sources from the Ministry of Economy explain that a balance has been found. The key here will be to see if it is defined based on the speculative practice (the type of buying and selling they do) or based on their legal form.

Seasonal apartments and rooms

The aim is to put a brake on seasonal apartments and rooms. Regarding the former, the measure of a VAT on tourist apartments is being recovered. Specifically, 10%. The regulation of room rentals will be similar to the rule that is being processed in Congress, the Minister of Housing explained. This was left out of the text that was being negotiated and has been incorporated at the last minute.

Tax aids

Tax incentives are offered to both tenants and landlords. In the former case, public guarantees with almost non-existent interest are also incorporated to be able to access a property for ownership. Tax incentives for landlords are offered to mobilize properties: in case of rent price containment or even reduction.

REITs

The Spanish government is reviving the 2025 proposal regarding SOCIMIs. Specifically, for those SOCIMIs that own rental apartments, taxation on a portion of profits not distributed through dividends is being increased from 15% to 25%. Therefore, not on all profits. The increase does not affect those SOCIMIs that manage offices, warehouses, or shopping centers, as is the case with the Catalan company Colonial. However, the increase provides for significant deductions provided that the assets (properties) are intended for affordable housing or if the profit obtained is reinvested in affordable rental apartments for a few years.