Why are there small owners who are worried about the housing decree?

BarcelonaMany small landlords, who make up the largest proportion of the housing market, are skeptical of the decree approved by the government, which faces a vote in Congress this Friday. Of the two decrees, the one that includes measures for the protection of vulnerable people was initially seen as the one with the greatest chance of moving forward, especially after the 'yes' announced by Podemos and the PNV. But the rejection from Junts —demanding that the Spanish government withdraw it or they will vote against it— has disrupted the possibility of it passing. The second, which incorporates automatic extensions for leases and compensation for tenants, had no chance, because the PNV will also vote against it.

One of the issues that causes the most fear among small landlords (ten properties or fewer, according to the state housing law) is the suspension of evictions for vulnerable individuals and families until December 31, 2030. Junts has made a point of defending small landlords, their concerns, and opposing illegal occupations. The aspect that worries them most is that related to compensation for landlords when the tenant who does not pay is considered vulnerable, has no residential alternative, and the administration does not provide one. "It is not clear how or when the owners of the property will receive compensation if they are different from large holders," state consulted sources. In any case, the decree establishes a protection mechanism intended for eviction proceedings due to non-payment, with differences compared to those affecting large holders.

And it specifies that "if the competent autonomous community does not offer a residential alternative, it will be obliged to stay the action, that is to say, to assume the payment of the amounts necessary to avoid eviction within a period of two months". It also says that during these two months, the judicial procedure remains suspended, if the action is stayed, the process ends and the contract remains in force. And if the autonomous community does not act within this period, the suspension of the procedure is maintained until it fulfills its obligation. But there are those who do not see enough guarantees.

Load with social policy

The property chambers, which usually have many members with few homes, share many of the criticisms of large property owners voiced by the president of the CEOE, Antonio Garamendi. Far from fixing the problem, the Property Chambers of Catalonia, as the president of Pimec warned the day before, Antoni Cañete, run the risk of aggravating it. For his part, the president of Foment del Treball, Josep Sánchez Llibre, went further and, at a conference on Wednesday in Barcelona, stated that the Spanish government, with these decrees, seeks to "covertly" socialize private property. And the builders, for their part, state that they are already converting rental developments into apartments for sale, according to the president of the Association of Property Developers and Builders of Spain (APCE) and also president of APCE Catalonia, Xavier Vilajona.

The chambers denounce that the central government "is once again loading a growing part of the social housing policy onto private owners" and warn that the regulatory framework is "increasingly complex, restrictive and unstable", with growing "legal uncertainty". The result, they assure, will be to reduce the supply of rental housing, as also stated by the organization Som Habitatge (Union of Property Owners of Catalonia). Despite admitting that the difficulties of access to housing must be addressed "with urgency", the chambers, like other organizations, also criticize that the intention is to "transfer to owners responsibilities that essentially correspond to public administrations".

Tax bonuses

The Spanish government highlights that the regulations being submitted for approval include many measures in favor of small property owners. One of them is the tax incentives provided for in the personal income tax (IRPF), which the central executive quantifies at approximately 330 million. The reductions in net yield that can be applied in the event that they lower the rent of a new contract by 5% range from 70% to 100%. If they maintain the price, the reduction is 50%, and if they increase it, the rebates range from 15% to 40%. If it is the first contract, the reductions range from 50% to 100%.

Another 100% tax exemption on capital gains will be for owners who sell a property to the public sector to be sold at an affordable price for transfer values of up to 200,000 euros. The benefit will be decreasing from 200,001 to 800,000 euros.