HEALTHPLAN MAGAZINE

The landscape of housing laws in Spain witnessed a significant transformation with the approval of the Housing Law in April last year. This legislative milestone was achieved through a collaborative effort between the coalition government, EH Bildu, and ERC, bringing forth several pivotal changes that particularly impact the rental sector. Central to these changes is the regulation of rent prices, with specific provisions in place to limit rent increases. This article takes an in-depth look at the crucial elements of the new Housing Law and provides insights into the prescribed limits for rent increases in the years 2023 and 2024.

Understanding Rent Increase Limitations

A standout feature of the recently enacted Housing Law is the introduction of stricter controls on rent escalation. The overarching objective of this measure encompasses various facets: facilitating the availability of affordable housing, alleviating strains within the rental market, and extending essential support to marginalised segments of the population, such as young individuals and vulnerable groups, to facilitate their access to housing. The new legislation addresses these concerns by instituting specific guidelines for rent increase limits, offering tenants a more predictable and stable housing environment.

The Transition from Previous Norms

Prior to the enactment of the Housing Law, rent increases in Spain were typically linked to the retail price index. However, the new legislation abolishes this practice and replaces it with a more structured approach. While a precise index for controlling rent hikes is yet to be established, the law outlines clear directives for the coming years, establishing maximum allowable rent increases. This transition marks a significant departure from the previous norm and sets the stage for a more controlled and equitable rental market.

Legal Rent Increase Limits for 2023 and 2024

The Housing Law, officially denoted as Law 12/2023, enacted on May 24th, 2023, outlines the parameters for rent increase limits in the following years. For the ongoing year, 2023, landlords are restricted to proposing rent hikes of up to 2% only. This limitation is applicable to tenants who are due for annual contract renewals in September. It's important for tenants to be aware of this restriction and to ensure that their contracts specify rent adjustments based on the Consumer Price Index (CPI).

Looking ahead to 2024, the Housing Law dictates that the maximum permissible annual rent increase is 3% for contracts that remain in force throughout that year. This provision offers tenants a degree of predictability, enabling them to plan their housing expenses more effectively.

Contractual Agreements and Tenant Rights

It's worth noting that, while the Housing Law mandates these limitations, individual rental contracts play a pivotal role. Every initial contract must include a clause pertaining to rent increases and any potential modifications in the future. Importantly, amendments to this clause can be made with mutual consent from both parties, as long as such modifications adhere to the legal framework.

Conclusion

The Housing Law of 2023 has ushered in a new era for Spain's rental market, introducing measures to stabilise housing costs and protect tenant interests. By setting definitive limits on rent increases for 2023 and 2024, the law strikes a balance between landlords' rights and tenants' needs. With these provisions in place, Spain takes a significant step towards a more regulated and equitable rental landscape, fostering a sense of security and affordability for all stakeholders involved.

This article was brought to you by HealthPlan, the expat health insurance experts in Spain.