Spanish Homes and Property: Buy-to-let reforms

October 4, 2012

Not so long ago I posted a blog about the differences between letting out property in the UK, with that in Spain. There are moves afoot by the Spanish government to make this situation more attractive to landlords and re-dress some of the balance.

Property in Spain – renting out a Spanish Home

Currently property owners have less rights when letting out property on a long term, residential basis in Spain, than on a shorter term let.

Spanish Law provides greater protection for renters of a Spanish “home” and tries to provide permanence to family units, as opposed to a “seasonal” contract, which has more of a temporary nature.

Many landlords try to rent out for 11 months maximum, or try to do short term holiday lets, or have a “temporary” contract, to protect themselves. However, under Spanish Law, what makes a contract a “seasonal” or a permanent “home” contract is not necessarily the time agreed, but the intention. So the nature of the contract needs to be explicitly stated.

For the Spanish Rental Law differences visit the original blog

Spanish property rental – what’s changing?

The Spanish government seems to want to redress some of the inbalances of the past, to make Spain a more attractive property market for investors.

New laws are planned to empower landlords more through various means such as:

  • giving tenants just 10 days to pay their arrears before facing eviction
  • Landlords should be able to re-possess their Spanish home after two months’ notice
  • a further proposed change will cut the tenant’s right to live in the home down to three years with an agreed extension of one year, from the current five years plus a three-year extension.

In 2009, the law changed a bit to help Spanish Property owners. If the landlord states at the beginning of the contract, that they will need to use the house within 5 years, then it is easier to get control of the property back. The new proposal takes this further.

In addition there are proposals for tax relief on the property rental income, ranging from 60 per cent to 100 per cent. There are conditions though, this only seems to apply if working people under 30 years of age are tenants.

So all of this will help Spanish Home owners and Spanish property landlords. The question is how long will it take to implement and will there be any dilution of the planned measures?

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