New housing law: what does it regulate and how does it work?

The Law for the Right to Housing (La Ley por el Derecho a la Vivienda) will develop the right contained in the Constitution to decent housing. It seeks to help those groups with more difficulties in accessing this with measures such as the limit on the rental price or the promotion of public housing.

The Bill for the Right to Housing was approved by the Council of Ministers on February 1, 2022, by Congress on April 27, 2023, and is pending processing in the Senate. It is one of the reforms included in the Recovery, Transformation and Resilience Plan.

The future law will include measures to increase the supply of housing at affordable prices, prevent situations of tension in the rental market and support young people and vulnerable groups in accessing housing.

Likewise, it offers autonomous communities and municipalities different tools that will help to contain or reduce the rental price and increase the number of social rental housing.

Promotion of public housing

• Regulation of public housing parks to avoid sales operations to investment funds
• Indefinite qualification of subsidised housing to always guarantee a period of at least 30 years
• Minimum percentage of 50% for rental housing within the reserve land for subsidised housing and increase in the percentages of reserved land for subsidised housing, from 30 to 40% in developable land, and from 10 to 20% in non-urban consolidated land
• Preparation and maintenance of an inventory of the public housing stock

Limits to the rental price

• Tax or urban benefits for privately owned homes with reduced-price rent
• Declaration of stressed residential market areas for a renewable period of 3 years in order to apply rent reduction measures
• Maximum annual increase of 3% of the rent in contracts in force during 2024
• As of 2025, a new reference index for the annual updating of lease contracts to replace the CPI that avoids disproportionate increases in rent

In areas declared as stressed:

• possibility of extraordinary annual extension for the lessee after the end of the contract
• in new contracts to new tenants, limitation of the rent to the rent of the previous contract
• possibility of applying the limits of the reference price index systems also to homes that have not been leased in the last 5 years

Likewise, the possibility of approving reference price index systems by territorial areas is established, establishing a database of rental contracts to monitor and evaluate the measures adopted.

Improvements to strengthen the balance in landlord-tenant relationships

• Extraordinary extension of one year in lease contracts due to accredited situations of social or economic vulnerability
• Real estate management expenses and formalisation of the contract in charge of the lessor (for example, the commission or the fees of the real estate agency)

Eviction Protection

• Improvements to guarantee effective communication between the judicial body and the social services that thus achieves rapid attention to people in vulnerable situations
• Housing solutions for those affected and, while these solutions arrive, extension of the deadlines for suspension of eviction
• When the plaintiff is a “large holder” and the eviction lawsuit affects vulnerable people, the application of a conciliation or intermediation procedure must be proven

New definition of large landlord and empty house

• Owners of 5 or more urban properties for residential use located in the same area declared as stressed may be considered “large holder”, or “gran tenedor”, when so requested by the autonomous community
• Definition of “empty home” so that municipalities can apply the Real Estate Tax (IBI) surcharge to those homes that have been empty for more than 2 years, and provided that the owner has a minimum of 4 homes in this situation
• Modulation of the IBI surcharge (currently located at 50% of the net IBI fee), which may reach 150%

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