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Spain’s junior govt partner wants to ban second homes in stressed rental areas

Amid a rental housing crisis in Spain, the government's far-left junior coalition partner wants to ban the purchase of second homes in stressed rental areas and boost the number of social housing units.

Published: 17 September 2024 16:35 CEST
Spain's junior govt partner wants to ban second homes in stressed rental areas
Spain's second Deputy Prime Minister and Minister of Labour and Social Economy Yolanda Díaz. Photo: Thomas COEX/AFP.

Sumar, the far-left junior coalition partner in the Spanish government, has proposed a ban on the speculative buying of second homes in stressed rental areas.

The vice-president and leader of Sumar, Yolanda Díaz, made the announcement as part of her party’s proposals for the 2025 budget. The 36-page document focused primarily on housing and tax reform and aims to tackle social inequality. 

Sumar will now begin negotiating the proposals with its senior government partner, Prime Minister Pedro Sánchez’s Socialist party (PSOE), with headline measures such as banning the purchase of homes for ‘speculation’ in stressed areas and a universal €200 per month child-rearing allowance. 

So-called rental ‘stress areas’ were created by Spain’s Housing Law in 2022, a piece of legislation that many consider failed. Despite tenant friendly policies like rent caps, the legislation has done little to stop the spiralling rental costs in Spain since the pandemic.

READ ALSO: Renting a room in Spain costs 90% more than in 2015

Presenting her proposals at an event in Madrid, Díaz, who is also Spain’s Labour Minister, said: “Today we are agreeing on what we want to negotiate with PSOE and on what we have to do. We have a vision for the future of the country. The first pending task is called inequality.”

Second home ban

For many in Spain the most eye-grabbing policy in the budget proposals is the ban on second-home purchases in stressed rental areas.

Sumar proposes to “temporarily ban the purchase of housing in stressed areas for uses other than habitual residence or affordable renting.” 

“In the current emergency situation in our country, the purchase of housing cannot be used for speculative purposes,” reads the text.

It also calls for an increase in the public housing stock, namely “500,000 social rental housing units of between €400-600 [per month] in stressed areas.”

Beyond that, sources from the Ministry of Housing told La Sexta that Sumar also wants to change the renting model by implementing new tenancy rules: “they are going to establish that a minimum number of years must be spent living in” any property, the source said.

“During those years it will not be possible to sell, except in cases of force majeure. It has to be the habitual residence,” the sources added.

Critics of the Sánchez government argue his housing law has worsened the rental market in Spain by forcing landlords out of the rental sector into the short-term tourist market in order to avoid regulation. 

READ ALSO: The loophole landlords in Spain are using to bypass the 3% rent cap

However the government argues that regional governments, run mostly by the opposition Partido Popular, have failed to effectively implement the measures. Sumar also proposes a solution to this problem: “to condition all public aid for housing destined for the regions to the application of the law to limit rental prices.”

Sumar also suggests it would make indefinite contracts the default contract for all rented housing and to put an end to illegal tourist rentals, among other measures.

Tax and other proposals

The budget proposals also include wide-ranging benefits and tax ideas, including the universal €200 per month child-rearing allowance and the creation of a solidarity tax on large inheritances of over €1 million.

It also advocates applying VAT to private education and private health insurance, as well as reducing it on basic products and services such as hairdressers, veterinary centres and nappies.

“It is essential to advance tax justice to finance public policy,” the document states.

READ ALSO: The rules and small print for a rental contract for a room in Spain

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PROPERTY

Spain’s plan to limit temporary accommodation rejected

Spain's left-wing government had planned to tighten its grip on temporary accommodation rentals as a potential means of making more long-term rentals available, but the country's right-wing parties on Tuesday rejected the proposal in parliament.

Published: 18 September 2024 11:53 CEST
Spain's plan to limit temporary accommodation rejected

If passed, the new law would have meant that anyone who wanted to temporarily rent a property would have to explain why and provide a valid reason.

For example, students or researchers would have to show the research contract or course booking to show it would only last a few months.

It would have also meant that if more than six months passed or more than two consecutive contracts issued, it will have automatically become a long-term habitual residence instead.

On Tuesday September 17th, the proposal was ultimately rejected in the Spanish Congress, voted against by Spain’s three main right-wing parties – Catalan nationalists Junts, Spain’s main opposition party the PP and far-right Vox.

The aim in part was to try and rectify the controversial Housing Law, which came into effect in 2023.

In most people’s eyes, the legislation has failed as landlords have found several loopholes to get around the restrictions, prices have continued to increase and the stock of rental properties is even more diminished.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

As a result of the fear of heightened regulation for landlords, many have left the traditional market and turned to tourist rentals or temporary accommodation instead, which are far more lucrative. 

This has had the opposite effect, increasing rental prices instead of stabilising or decreasing them.

READ MORE: Why landlords in Spain leave their flats empty rather than rent long-term

Seasonal contracts and room rentals allow landlords to raise prices every six or nine months and they not subject to the price limitations of the housing law.

The idea of this new law was to try and set the maximum duration of a temporary rental contracts at six months in order to avoid this, but it could have potentially also caused problems for many who need this type accommodation such as students, digital nomads, those living here on a short term basis etc. 

During the debate, Sumar’s spokesperson, Íñigo Errejón, defended the law saying that it is a “solvent”, “fair” and “precise” proposal, which will help “correct an abuse” and “close the gap through which “Landlords can use to avoid the LAU (Urban Leasing Law) and rent regulation”.  

Far-left party Podemos blamed the ruling PSOE for having left this “hole” in the housing law, but also agreed that the restrictions on temporary accommodation were needed to try and rectify this.

READ ALSO: Has Spain’s Housing Law completely failed to control rents?

Junts (Catalonia’s main pro-independence party) and the PNV, the Basque nationalist party, were firmly against it. They agreed that the problem must be solved and that “accessible decent housing was needed”, but raised the situation of students, interns, residents or workers who need housing for flexible periods.

Junts party member Marta Madrenas warned of the harmful effects that this limitation on temporary rentals can have for university cities such as Girona.

Vox and the PP meanwhile argued that they don’t want to help cover up the mistakes made by the left with regards to the Housing Law.

Vox deputy Ignacio Hoces stated that the increase in seasonal rentals has occurred due to the “failure” of the Housing Law, since this has caused rental prices to “skyrocketed” by 13 percent and the supply to be reduced by 15 percent.

Temporary accommodation, referred to as alquiler temporal or alquiler de temporada in Spanish, is considered to be anything that’s longer than a month but shorter than a year, middle ground between short-term and long-term rentals. It is also referred to as monthly accommodation or seasonal accommodation.

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