January 28, 2021

The Constitutional tomb part of the government’s rent decree

The Constitutional Court (TC) has annulled by its unconstitutional nature two provisions of the royal decree, approved in March 2019, which regulates housing rental contracts, which obliges the Government to reformulate some aspects of this regulation, including the revitalization plans of the offer in this regime.

As informed by Efe legal sources on Tuesday, the ruling, which has been the speaker Ricardo Enríquez Sancho and will be fully known in the coming days, partially estimates the appeal brought by the PP, which questioned the “extraordinary and urgent need” of the measures taken by the Executive.

Under these sources, the high court, in the Plenary that has begun this morning, has annulled the first additional provision, which so far has provided for the mobilization of public land to promote social rental housing.

This point was precisely one of the Promising stars of the Minister of Development, José Luis Ábalos, which came to promise the transfer of these soils to private companies to build and exploit for 50 years 20,000 homes for rent at affordable prices.

The mandate appealed to the Ministry “a set of actions to be carried out, including negotiation with the sectorially competent administrations, using for this purpose all the instruments at their disposal”, as contained in the Official State Gazette (BOE).

It also allowed him to modulate the financial instruments of the State Housing Plan to be able to meet these needs, and reorient his bases to “exclusively” support the enjoyment of housing in this regime.

Aspects that the Government must reformulate, as well as the third annulled additional provision, which includes measures of flexibility in the duration of agreements aimed at the execution of public infrastructure.

Regarding the rest, the magistrates disregard the claims of the PP and endorse the other precepts, the sources point out.

In the last Council of Ministers prior to the dissolution of the Courts before the convening of the general elections of April 28, 2019, the Government gave the green light to the new royal decree of housing, which does not include any measure to set the prices of the rentals, whose income must be updated during the term of the contract to the consumer price index (CPI).

With the objective of encouraging housing supply in this regime, it also establishes a series of fiscal measures such as bonuses of up to 95% in the Property Tax (IBI) of protected housing for rent when the municipalities agree, in a legal rule, a limited income.

It also enables the tax on the IBI of the empty dwelling, eliminates the Transfer Tax on the rents of habitual housing, establishes the right of preferential acquisition by the Administrations in case of the joint sale of a property with leases, and extends the mandatory extension of 3 to 5 years in the duration of the contracts, or 7 if it is a legal entity. EFE


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