The Council of Ministers has approved this Friday the new royal decree law of urgent measures in the matter of housing and rent. The new regulation provides for the creation of a state reference index on the rental price of housing within eight months. In addition, although it does not regulate the limitation of price increases, as claimed by Podemos, the text links the rent increases to the CPI for the duration of the contracts that are extended from three to five years. The rule does not include finally the bonus of 80% of the IBI for the rental of habitual residence whose rent was lower than the one determined by the reference index of the rental price of housing, as specified by the Ministry of Public Works. These types of measures, detailed, will be addressed in a later regulation.
The initial idea, contemplated in a draft to which EL PAÍS had access, was to allow the City Councils to grant tax credits of up to 80% on the IBI for the landlords who limited the rents to the new price index that the Executive will design. But the measure, always according to sources of Development, has fallen off the text at the last minute. However, the decree will allow City Councils to apply IBI bonuses of up to 95% for sheltered housing, a measure that was already included in the decree that was approved in December and which Podemos rejected in Congress.
The most important aspects of the new decree are the following:
- Extension of the duration of contracts. The minimum term of the contract is extended (mandatory extension) from 3 to 5 years (or to 7 years, if the lessor is a legal entity). In this way, the LAU regulation of 1994 is reverted, although with the proviso that, if the lessor is a legal person, the minimum duration is extended even more until seven years. Among the novelties of the text is that during the term of the contract, the power to recover the home by the owner must be expressly included in the contract. Now it is enough for the landlord to communicate that he needs the house for himself, his spouse or his children.
In order to give more stability to the tenant, the tacit extension from 1 to 3 years is also extended. And at the same time we also change the notice period to terminate the contract. Now the landlord must notify with four months and the tenant with two. This increases the anticipation with which they must indicate that they do not wish to continue with the contract once the mandatory extension is over.
- Revenue update. During the term of the contract, it is established as a cap to raise the rent between year and year to the increase in the CPI.
- Price index system. The decree introduces as a novelty the definition of a state system of reference indices for the rental of housing, which will be used to monitor the market. It includes the possibility that the autonomous communities can define their own indices for the application of their skills in housing policies (some of them, such as Catalonia or the Valencian Community have already made progress in this line). It indicates that these indexes can serve as support, where appropriate, for fiscal measures.
In the budget agreement of last October, it was pointed out that the reference index would serve to enable municipalities and communities to limit the "abusive increases" in prices in stressed areas. We may have wanted to introduce that possibility but the Government has refused because it considers that it would be unconstitutional. "It is a state norm that should regulate it and the royal decrees can not regulate fundamental rights such as the right to property," say sources of public works.