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RENTING IN SPAIN

How much can my landlord legally increase my rent by in Spain?

What’s the maximum amount Spanish landlords can increase the monthly rent of tenants by? Is there any legislation in Spain to protect renters from spiralling inflation? And when is it not legal for landlords to put up the rent?

how much can landlord increasy my rent by in spain
Before the Spanish government put the cap in place, the average increase in rents in Spain was €53 more per month when tied to the 7.6 percent CPI rate. (Photo by Cristina Quicler / AFP)

In March 2022, the Spanish government introduced what was intended to be a short-term cap on increasing rent prices.

It was one tool in an arsenal of measures attempting to soften the blow of record inflation and skyrocketing prices affecting Spaniards, including a €16-billion subsidies package and a 20 cent per litre discount on fuel.

In Spain, when renewing rental contracts landlords have the right to increase the price of the rent according to the Consumer Price Index (CPI), the figured used to measure inflation.

The CPI rate effectively acts as an upper limit on how much monthly rents can be increased by for housing rental contract renewals, according to Spain’s current Urban Leases Law.

READ MORE: Rising inflation in Spain: Six cost-cutting ways to fight it

But with inflation at 7 percent in March (in July it increased to a staggering 10.8 percent, an almost 40 year high), the Spanish government were keen to stop landlords from trying to hike rents in line with the unnaturally high inflation rate.

Before the government put the cap in place, the average increase in rents in Spain was €53 more per month when tied to the 7.6 percent CPI rate.

That would add €636 more to rent bills over a year, an amount many in Spain cannot afford to pay.

How much can my landlord in Spain put up the rent?

To try and stop landlords putting up rents by 8, 9 or 10 percent (in line with inflation) the government introduced Royal Decree-Law 6/2022, a temporary limit on a housing rental contract clause that allows landlords to increase the amounts of rents to only 2 percent more than the price previously outlined in the contract.

The cap was initially intended to last until the summer, but with the economic outlook worsening since March, the Spanish government unsurprisingly decided to extend the measure until the end of the year.

The 2 percent figure is tied to the ‘Competitiveness Guarantee Index’ (IGC). The IGC is another economic measure published by Spain’s national statistic body, the INE, and its regulations have upper and lower limits, meaning that the index can never be less than 0 percent or more than 2 percent.

That means, even when the IGC exceeds 2 percent, as it has done recently, 2 percent is taken as a reference value as was done with relation to the rent cap.

READ MORE: How will rising interest rates affect my life in Spain?

Which rentals are affected?

The 2 percent limit includes all rental contracts signed under the Urban Leases Law 29/1994, effectively applying to all rental contracts signed from January 1st, 1995 until December 31st 2022.

It remains to be seen if the Spanish government will further extent the cap into 2023.

READ MORE: Renting in Spain: Can my landlord put up my rent due to rising inflation?

Is it always legal for a landlord in Spain to increase the rent?

Yes, but only in certain circumstances. Putting aside the economic turbulence, Spain’s Urban Leasing Law allows the monthly rent paid by a tenant to be updated in accordance with the IPC.

However, this can only be done if previously agreed between tenant and landlord and it must be clearly stated in the contract that the rent is subject to IPC changes.

In such cases, the lessor must wait for the first year of tenancy to have been completed for the IPC rise to be applied, and from then on only once a year and based on the most updated IPC amount. 

So if the tenancy contract was signed in February 2021 for example, the prearranged IPC update in the following years should also be in February.

Landlords can therefore not increase the rent several times a year or every month based on varying IPC rates.

But skyrocketing inflation has changed all that, for now. Due to the government decree, the maximum amount any landlord can increase the rent on a private rental is capped at 2 percent until the end of the 2022.

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For members

PROPERTY

Ten ways under-35s in Spain can get help to buy a home

Buying a home is particularly difficult for young people in Spain, with low wages, job instability and rising property prices making it a pipe dream for most. But there are several schemes throughout Spain to help make it a reality.

Ten ways under-35s in Spain can get help to buy a home

Many young people in Spain who can afford to move out of their parent’s house cannot yet afford to buy their own home, with down payments and securing a mortgage two of the biggest problems.

According to FotoCasa six in 10 young people in Spain between the ages of 18 and 34 have tried to buy a property, but without success.

The Emancipation Observatory of the Spanish Youth Council (CJE) adds that currently in Spain 59.2 percent of young people rent, while only 17.4 percent own their own property and pay a mortgage. Data shows that most Spaniards aren’t able to buy their own property until they are 41 years old. 

Luckily there are now several government schemes across the country that aim to help young people get on the property ladder. Here are 10 ways that under-35s can get help to buy their first home.

Buying a home in a rural location

The Spanish government introduced a subsidy of €10,800 for those under 35 who wish to purchase a property in towns or villages with less than 10,000 inhabitants, in a bid to help solve the problem of declining rural populations, as well as the issue of young people not being able to afford to buy a home. This is available until December 2022 and can be applied for through the authorities in your region. 

Andalusia

Andalusia announced its ‘First Home Programme’ earlier this year, which is independent but runs parallel to the State Housing Plan. It includes aid of up to €10,800 for the acquisition of habitual residence for young people under 35.

Castilla y León

Those in Castilla y León can apply for aid if they want to live in the province of Soria. Aid is available up to 50 percent, up to a maximum of €5,000 to buy in rural areas within the province. People up to the age of 36 can apply. Find out more on how to apply here

Canary Islands

Young people from the Canary Islands can apply for a housing benefit in 2022 of 20 percent of the cost of the property up to a maximum of €11,000. You are eligible up until the age of 36. Find out more about the aid here

Galicia

Galicia is giving assistance to those wanting to buy in the historic centres of towns and cities. Those aged 35 and under can get up to €12,800 to help them do this, which in turn will help to revive and rejuvenate the oldest parts of the region. You need to apply here before November 15th in order to be in with a chance. 

Madrid

In July 2022, the government of Madrid announced an aid package for young people aged 35 and under. The banks, along with the government of Madrid, will grant mortgage loans for amounts greater than 80 percent and up to 95 percent of the value of the property, provided that the purchase price doesn’t exceed €390,000.

READ ALSO: Why Madrid is now the easiest place in Spain for under-35s to buy their first home

Murcia

The government of Murcia guarantees an aid package of 20 percent, up to €10,850 for those up to the age of 35 who want to buy their own home by getting a mortgage loan. Find out more and apply for the aid here

Valencia region

In Spain’s Valencia region, the Ministry of Housing and Bioclimatic Architecture aims to help make it possible for young people to buy a home who might not otherwise be able to, as well as help towns and villages that are at risk from de-population. The amount each applicant can get will be 20 percent of the value of the price of a house, up to a maximum of €10,800 per person. The cost of the property cannot exceed €120,000 and it must be your main and permanent home. It is available to those up to the age of 35.

READ ALSO: How young people in Spain’s Valencia region can get €10k to buy a home

Aid for large families

Large families or familias numerosas as they are called in Spanish are defined as families who have four or more children. Large families can also benefit from state aid when buying a property, which is €10,800 as long as it does not exceed 20 percent of the property price. When buying a property, these families can also get help by benefiting from a discount on the payment of the Property Transfer Tax (ITP), up to four percent on second-hand purchases. 

Aid for renting

If you can’t yet afford to buy your own property, there are several benefit schemes for young people to be able to move out of their parent’s home and be able to rent instead. The Bono Alquiler Joven allows those between 18 and 35 to get €250 per month to go towards rent and is available across the country. There are various other schemes in different regions too. Find out more and apply here

Be aware, most of these schemes are only available for certain amounts of time and strictly for those who do not already own a property. There may also be prerequisites on the amount of time you have lived in each region. For example, those wanting to benefit from the aid package in Madrid must have lived in the region for the two years leading up to their application.

There are also certain limits as to the amount you can earn in order to be eligible for the benefit. In Valencia, your income must be equal to or less than three times the IPREM (€6984.24 per year for 2022).

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