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How to apply for Spain’s new €250 rent bonus for under-35s

The Spanish government has approved a new housing benefit for young mid-to-low income earners to get €250 a month towards the cost of rent. Here’s how to see if you’re eligible and how you can apply.

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Would you like to apply for Spain's new rental bonus for young mid to low earners? Photo: Wonderlane/Flickr

The Spanish government first announced the plan back in October 2021, but finally approved the scheme on Tuesday January 18th – the date which it also came into effect. 

The aid is set at €250 per month for a period of two years for each young person, as long as they have a regular source of income and their income doesn’t exceed €24,318 per year.

Its aim is to help young people in Spain move out of their parent’s houses and live on their own.

According to a study by the Spanish Youth Council (CJE) only 15.8 percent of young people under the age of 30 have moved out of home and the rest still live with their parents. 

This age group also has one of the highest unemployment rates in the EU at 31.1 percent (in the third quarter of 2021), according to the Active Population Survey (EPA). 

Not only this, but these young people also have the lowest salaries. According to the latest data from the Instituto Nacional de Estadística (INE) in 2020, this was €1,207 gross on average per month.

In total, the Spanish government calculates that more than 70,000 people will benefit from this initiative. 

Who is eligible to apply for the aid?  

In order to apply for the scheme and be granted the €250 monthly aid you must:

  • Must be between ages 18 and 35
  • Have regular a source of income. However, this cannot exceed €24,318 per year. This is equal to 14 payments a year of €1,737 gross per month or 12 payments of €2,026 gross per month.
  • The amount of rent paid cannot exceed €600 per month, although regions with particularly high rents that wish to extend it to €900 euros per month can do so.
  • The grant must be used to rent a place in which you as the beneficiary live in. In other words, you can’t sublet it.  

    Failure to comply with just one of these points means that you will not be entitled to the benefit.

How much will I receive? 

The maximum amount you can receive is €250 per month. The payments can only be used for the purpose of renting accommodation and nothing else. 

Can I benefit from the rental aid if I’m already receiving other benefits? 

Yes, the bonus is compatible with other benefits of the State Plan for Access to Housing 2022-2025.

If you do receive different two types of benefits, the amount received will be up to 40 percent of the difference between the rent of the home and the aid, with the joint limit (the sum of the two subsidies) equalling 75 percent of rental income.

You will also be able to continue to receive other types of social bonds such as the Minimum Vital Income (IMV) and other non-contributory Social Security benefits.

What if I rent a room in a shared apartment? 

You can benefit from this aid whether you live alone or share a flat. In fact, if you are sharing an apartment with others, all housemates can also request this help individually, as long as they meet the requirements.

In the case of renting a room, the maximum rent will be set at €300, although each region may raise this limit to €450 if they want to. 

How can I apply for the aid?

The rental benefit can already be applied for and came into effect on January 18th. It is retroactive, meaning that if you are eligible and your application is successful, then the aid will be backdated to January 1st 2022. 

You can apply either in person at the housing offices in each region or online by using your Digital Certificate.  

READ ALSO – Access all areas: how to get a digital certificate in Spain to aid online processes

To apply online, you must follow this link to the corresponding page on the government website.

After reading through to check that you meet all the requirements, you can click on the box in the bottom left-hand corner which says ‘Enlaces a Comunidades Autónomas’ or ‘Links to Autonomous Communities’. 

From here, you simply need to click on your region, where you will be taken to a regional website and given further instructions.

Be aware, that not all of the regions have set up the function to apply for this aid on their websites yet, so you may need to wait until they do or simply apply in person instead. 

How long will it take to receive the benefit?

According to the Minister of Transport, Mobility and Urban Agenda, Raquel Sánchez, it will be managed within a period of “a month and a half or two months at the most”.

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PROPERTY

What the Euribor rise means for property buyers and owners in Spain

The rise in the Euribor interest rate, used to calculate mortgage payments in Spain, is causing big changes in the mortgage rates.

What the Euribor rise means for property buyers and owners in Spain

Looking to buy property in Spain? Already a homeowner here? Well, you may have heard something about rising interest rates recently.

Or perhaps changes to the terms of your mortgage. Or the Euribor – but what is it, and what’s going on?

What is Euribor?

In Spain, Euribor is the interest rate most often used to work out mortgage payments and to calculate both variable and fixed rates.

It is anchored to the interest rate set by the European Central Bank, and, as we are now seeing, quite responsive to global economic events.

It’s the interest rate that banks in the Euro Zone use to lend to each other, so when the base rate goes up, the Euribor does too, which sends mortgage interest rates across the Eurozone rising. 

Rising rates

Most Spanish mortgages with variable rates normally vary based on a variety of factors, but this number has been rising and in May 2022 saw figures of 0.240 percent (Tuesday May 17th), well above the average. 

The rises throughout May are leading many in Spain, and indeed across Europe, to wonder how high their mortgage rates can go, and when the rises will stop.

Banco de España has estimated that the increases could range from anything between €35 a month to an additional €400. Bankinter predicts the Euribor rate will finish the year at a staggering 0.40 percent, but, more encouragingly, Caixabank’s prediction puts it at just 0.13 percent by the end of 2022.

On Euribor.com.es, a website that tracks the index on a daily basis, they suggest that the market consensus predicts the Euribor will finish at around 0.3 percent at the end of the year, but could reach as high 0.8 percent in 2023.

All of them agree, and most other economic indicators suggest, that whatever the figure at the end of the year, it will remain positive, so it seems almost certain that mortgages will continue to rise throughout 2022 at the very least.

This instability, in addition to global inflation and supply chain problems, could mean that mortgage rates will be affected at least until 2023, with some predictors even signposting 2024 as the possible end of a rise in mortgage prices.

With things uncertain in the mortgage industry, and the world economy more broadly, perhaps you’re thinking of ways to try and insulate yourself from the climbing interest rates.

How to protect yourself from the rising rates

One way to weather the storm of interest rate increases is to change your mortgage from a variable to a fixed rate, either by negotiating with the your bank or by changing bank altogether – a process known as subrogation.

According to data from MyInvestor, during March and April the number of subrogations has started to rise.

Subrogation basically means switching the mortgage from one bank to another to change its interest rate. Although it does involve certain charges in order to do so – you pay the valuation of your house, which normally costs a few hundred euros, and a fee charged to the bank you are leaving, which can cost up to 2 percent of the outstanding amount – it could, and probably would, work out cheaper than paying the hiked interests rates over time.

You could also try and take out a new mortgage with another bank and use the borrowed money to settle the loan. This is, of course, a more expensive option as you have to pay the appraisal, the commission for early repayment of the current credit (again, up to 2 percent of the outstanding amount) and the expenses associated with its cancellation of registration, which normally runs to around €1,000.

READ ALSO: Spanish mortgages – Ten things foreigners should know before getting one

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