The Spanish government has announced that it will continue limiting the amount landlords can increase the rent of their tenants by a maximum of 2 percent throughout 2023.
The announcement was made on Tuesday, after the Basque nationalist party, EH Bildu supported the notion. This was needed so that Spain’s General Budgets for 2023 could be approved.
The rent increase cap was first introduced by Pedro Sanchez’s government back in March of this year. The move was made to help protect the 30 percent of people who rent properties in Spain, shielding them from the impact of rising inflation.
Ministerial figures actually show that 3.5 million rental agreements are presently subject to potential increases.
Prior to the cap, many landlords could by law, increase the price of the rent on a yearly basis based on the Consumer Price Index (CPI), the figure that is used to measure inflation.
The CPI rate acted as an upper limit on which rents could be increased if mentioned or agreed within the rental contract. For example, if a rental agreement was due to be renewed and the inflation rate stood at 9 percent, the landlord could increase the rent by 9 percent.
This clause, that is in Spain’s Urban Leases Law, is however not currently applicable due to the 2 percent increase limit.
The initial movement to cap rental price increases was due to expire in December of this year but will now be in place until December 31st 2023, bringing relief to many rental tenants across Spain.