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PROPERTY

Stricter requirements and screenings: Why it’s getting harder to rent in Spain

Demand for apartments to rent is growing, especially in Spain’s big cities, but it is also becoming increasingly difficult to find one due to strict rules and prerequisites.

Published: 1 November 2022 17:58 CET
Updated: 6 November 2022 09:04 CET
Stricter requirements and screenings: Why it’s getting harder to rent in Spain
Why renting is getting harder in Spain. Photo: Jilbert Ebrahimi / Unsplash

The apartment is not open to people who work remotely, you need a contract of at least €2,100 per month, you need to be over 35 years old, you need an annual income of over €25,000 and you need to prove you’ve been working non-stop over the past two years.

These are just some of the unrealistic demands agencies and landlords and have been asking tenants recently across Spain. 

Increase in cost

According to the latest data, the average price of rental housing in Spain was €1,169 per month last month in September 2022, which represents an increase of 3.85 percent compared to August.

The values ​​vary depending on the city. In Barcelona, it stands at €2,312, in Madrid at €1,776 and in Valencia and San Sebastián above €1,300.

The price stood at €11.2 per square meter which is, 6.4 percent more than in 2021 and not far from the peak, which was seen two years before that.

In the case of Madrid city, the figure for September stood at €16.3/m2, which marks a year-on-year increase of 10.8 percent; and in Barcelona at €17.8/m2, with an increase of 20.3 percent. 

According to the housing website Fotocasa prices in the capital of Madrid have reached “historic highs”, and not only in the centre but also in the outlying municipalities.

READ ALSO: How much can my landlord legally increase my rent by in Spain?

Waitlists

The increase in demand for places to rent means that there are now long waitlists in some cities in Spain. People are missing out on rentals if they can’t make the viewing straight away.

And when they are able to get to a viewing, they’re having to make a decision on the spot and sign right away, because if they take a few days to think it over, they will lose out.

Agencies are also reporting that many young people are signing rental contracts without even going for viewings as they’re too worried they’ll miss out.

This is not just happening in places such as Madrid and Barcelona, but also in nearby commuter towns or even small towns nowhere near these hubs, such as Ferrol in Galicia.

READ ALSO: Where are the cheapest places in Spain to rent a two-bedroom flat in 2022?

More requirements

The greater demand for homes means that landlords can afford to become more choosy and are adding more and more requirements for people to be able to rent their properties.

Some of the most common demands are that tenants must demonstrate job stability, have a minimum level of income, be of a certain age and be willing to put down a considerably large deposit. But more and more requirements are being added by landlords all the time.

In Madrid for example, tenants are being asked for salaries of around €2,100, proof of work life in recent years, renters insurance and real estate agency fees.

According to the tech website Xataka if your rent is €1,776 per month and you add the agency fees and a one-month deposit, this would rise to €5,300, which you would need to pay out at the start. Many people are unable to spend these large sums all at once.  

READ ALSO: How to rent a property in Spain without a job contract

Not everyone is eligible  

Reports in the Spanish press have said that some landlords are going even further and discounting some tenants from the outset.

Examples include that they need be over 35 years old, that they pay the IBI (yearly property tax), which in Madrid is an average of €439 and they are prohibiting people who work from home.  

Many of these are increasingly difficult, especially for those who are not allowed to work from home, as many remote jobs increased during the pandemic.

Some potential renters are even having to undergo interviews and send in CVs to rent an apartment, a practice which has become common in places like New York, but up until now was very rare in Spain.

Looking ahead to 2023  

To help with the costs of inflation and to stop landlords from increasing rental prices as much as they want, the Spanish Government established a limit of a two percent rise.

This, however, is a temporary measure, and people are concerned as to what will happen afterward if inflation continues.

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PROPERTY

How to contest the cadastral value of your Spanish property

The cadastral value and cadastral reference of a property in Spain affect various factors including how much yearly property tax and inheritance tax you'll pay. Here's how to change the valuation Spanish authorities give your home.

Published: 14 June 2024 09:20 CEST
How to contest the cadastral value of your Spanish property

When it comes to taxes, everyone wants to know if there are ways to pay less. While it’s not always possible, there are certain factors that affect particularly taxes associated with your Spanish property – namely the cadastral value and the cadastral reference. But, can they be changed or rectified?

What is the cadastral value?

The cadastral value is applied to all properties in Spain. It’s the value applied to your property by the Ministry of Finance or Hacienda and serves as a tax base to determine how much IBI tax or Impuesto sobre Bienes Inmuebles you pay for example. This is a yearly tax for all those who own property in Spain.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

The value will depend on the size of your property, the condition it’s in, the year it was built and the cost of construction, among other factors.

It differs from the cadastral reference, which is an estimate of the market value of a property and is used as a reference for the real estate market. It is also used as a tax base for inheritance and property transfer tax.  

How is it determined?

At the beginning of each year, the cadastral value of homes is reviewed, and as a result, it can increase or decrease. This is why your IBI bill can increase or decrease too. As a general rule, the cadastral value is usually much lower than the market price, but this is not always the case.

How do I find out the cadastral value? 

To know the cadastral value of a property, you must first know the cadastral reference. Then you can find the value in the corresponding public records online. You can find this reference on your IBI bills, as well as on your property deeds.

Once you have this you can go to the electronic headquarters of the Cadastre, and click on ‘reference value’. There you will find all the information about the cadastral reference and the corresponding cadastral value.

Even if you’re not the owner of a property, but want to find out the cadastral value of a property you’re considering buying, you can find it out here.

Can I change the cadastral value of my home?

Yes, it is in fact possible to change the value. If you believe that the cadastral value of your property is too high with respect to the market price of your home, you can request that it be reduced.

You may want to do this in order to lower your IBI bill or if you want to sell your property at a lower price than the market value.

How do I lower the value?

If you believe that you have a case for changing it, you can make a claim to the General Directorate of Cadastre, overseen by the Ministry of Finance. There are two different claims you can make:

  • The procedure for correcting discrepancies
  • The procedure for rectification of material and arithmetic errors.

Procedure for correcting discrepancies

This option is typically used when there is a large difference between the market price and the cadastral value of a property, as well as when there are errors or false data about the characteristics of your home.

To do this, you must go to the Cadastre office in your municipality or apply online at the Cadastre Electronic Headquarters.

Procedure for rectification of material and arithmetic errors

The second option is used when there are errors or incorrect urban planning information, which affects your home. Again you can do this in person or online. In this case, it will have a retroactive effect. If you have paid too much IBI in the past, then it should be returned to you if the application goes in your favour.

Can I change the cadastral reference of my home?

If the reference value of your home is higher than the market value, then you may be wondering if you can change the reference in order to lower your tax base.

Unfortunately, you cannot request changing this in the same way as you can with the cadastral value. But, the good news is that there is a way to challenge it indirectly.

To do this you will need to request an appraisal from a company approved by the Bank of Spain. If the result of this turns out to be lower than the reference, you can try to rectify your self-assessment tax return, providing the appraisal as evidence that you should be on a lower tax base. As mentioned above, this will only affect certain taxes like inheritance or property transfer. 

In order to approve this, the tax office will need a report from the General Directorate of the Cadastre who may be able to rectify the reference and provide a report to settle the matter.

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