Reversal of the Government in tax incentives for cheap rent - My Blog

Reversal of the Government in tax incentives for cheap rent

Spread the love

Reversal of the Government in tax incentives for cheap rent

Its new housing decree, in force from today, recovers the base of the approved in December and fixes the CPI as cap for price revisions

The Government seems to have wanted to satisfy almost everyone with its new decree law on “urgent” media on housing and rent , but it may end up leaving few satisfied. At the last minute it has renounced the possibility of implementing new tax incentives of weight for owners who demand more moderate leases for their homes and, at the same time, has set inflation as the ceiling for their annual reviews.

The new regulations, which would come into force this Sunday after its publication in the Official State Gazette ( BOE ) scheduled for Saturday, recovers in general lines the text approved on 14 December, but could only be applied 35 days to be then rejected by Congress. For that reason now in the Ministry of Development they have preferred to go almost on insurance, counting a priori with the support of Unidos Podemos, PDeCAT and PNV, which with the votes of the PSOE would be enough to validate it in the Permanent Deputation . However, some uncertainty could arise during the next month in the signing of new contracts and even paralyze operations.

Vice President Carmen Calvo admitted Friday, after the Council of Ministers, that the decree does not really serve to address “the current imbalance” in the field of housing rental , but said that at least it would give “greater security and certainty to the tenant »Waiting for a more ambitious regulation that would try to develop the next legislature – depending on what the general elections of April 28 – and already have a new annual budget. Surely for this reason the biggest criticisms of this “emergency and shock plan” -as she defined it- came from the sector itself, from real estate portals to agencies, farm managers and large investment funds.

Blackstone , an American fund considered the largest home in Spain, was the most severe. “It will only bring more tension to the rise in prices in the market – where, according to their calculations, four million owners and 10 million tenants operate, and in which the main investment firms would” only “control 3% – and a reduction of the offer, “said its head in Spain, Claudio Boada . But what is it based on? Apart from criticizing the extension of contracts -first five years, and seven if the owner of the property is a company, expandable for another three years if there is no express waiver of the parties (four months before the owners and half the tenants), censorship that the Consumer Price Index (CPI) limits the revaluations.

As a novelty, the decree limits the annual rent increases to the increase in inflation (the CPI prior to the signing of the contract, or its revision). The parties may agree to a lower increase, but never higher, as in the Law on Urban Leases (LAU) of 1994.

Fiscal measures
Only if there were improvements in the weight of the house, “beyond the mandatory conservation” that the landlord must assume , could the price increase before the agreement between the parties. No more reference to the price except the new system of reference indices on rents that Development undertakes to develop in eight months, and that “will serve as support for possible fiscal policy measures.”

Of these it waives to open the door so that the town councils could lower the Property Tax (IBI) to the owners of houses with more moderate rents according to the average prices of their area. Yes, there will be a bonus of up to 95% on this tax for official housing (VPO) under lease, always at the discretion of the consistories. Likewise, and also within the IBI, the current obligation that the tenant pays in public social housing parks is eliminated.

It also eliminates the tax on property transfers for the rental of habitual residence. And on the municipal surcharges to empty homes , “refers to sectoral regulations” -state or autonomic- so that it defines “the rules” that allow “apply”. All these measures will apply only to new contracts that can be signed so far – any retroactive effect is ruled out – although from now on there will be no distinction between those registered in public registries or organizations and those that only circulate at the private level.

Notice to the town councils

Despite criticism from investment funds and some real estate platforms, the possibility that the new official rental price indices – which are based mainly on the information, now expanded, to be provided for bond deposits – could be used to “Establish limits to the free market “, Fomento warns in its text that although the autonomous communities may develop their own income indicators -some, in fact, they already have them-, neither they nor the state, nor those that could develop the City councils , “in no case do they enable them to establish a system of regulation” of those prices.

What the Executive does not renounce is to reduce the presence of large investment funds and similar operators in the rental business, considering that the current market situation is ” poor “. That is why it includes in the decree the right of preferential acquisition by the Public Administrations in case of joint sale of the property, that is, when all of their homes are sold at the same time. To this end, it establishes “the possibility” that the housing legislation fixes -not concrete when- a right of pre- emption and retraction in favor of those.

Leave a Reply

Your email address will not be published. Required fields are marked *