Spain’s coalition government wants to impose rent increase caps on landlords who own 10 or more residential properties.
During their weekly cabinet meeting, government ministers approved a draft rent control legislation that according to the government will see “Vulnerable families and young adults in the country's biggest cities become the main beneficiaries of the proposed law.”
The new controversial bill will see price hike caps set for landlords who own multiple residential properties, a move that is said to primarily target the large real estate companies and investment funds.
Representatives have said, however, that the bill also includes tax discounts of up to 90 per cent for landlords with less than nine properties, who choose to lower their rent.
Opposition parties and leaders of business organisations have, however, criticised the new proposal by Spanish Prime Minister Pedro Sánchez's government as ‘an improper intervention in the free market’.
Regulating the housing market was the main stumbling block that prevented Sánchez’s government from agreeing on a national budget for 2022 with the far left Unidas Podemos party.
Newly-appointed Presidency Minister Felix Bolanos said at a news conference on Tuesday that "The new bill seeks to contain the price of rents and reduce it."
The minister also told reporters that “The new bill would include tax incentives for small landlords who cut the rents they charge and would boost property taxes on houses left empty by their landlords.”
He said that the new draft also law states that 30 per cent of new-build housing projects will have to be set aside for social housing.
At present, many Spaniards cannot afford to live on their own due to low salaries and a 35 per cent youth unemployment rate, the highest in Europe. The average age that young people leave their family home is thirty, compared to the average age of 26.4 in the EU.
For this reason, the Prime Minister announced that as part of a separate initiative, the Spanish government plans to help those aged between 18 and 34 with their rent payments by granting them a 250 euros (212.75 GBP) monthly bonus. This bonus will be for those who earn less than 1,977 euros (1,682 GBP) per month and will be paid for two years.
According to both parties, the annual spending plan is expected to be passed on Thursday.
To get the budget passed, Sánchez’s minority government requires the votes of congressmen outside of the coalition. They include separatist parties from the Basque Country and Catalonia.
The vote in the Congress of Deputies, the lower house of the Spanish parliament, is only regarded as a test of the government’s strength.
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