EXPLAINED: The changes to how rent can be paid in Spain
Spain’s new Housing Law includes a little-known clause which prevents tenants from paying their rent to landlords in cash, with some exceptions.
Looking to move? Find your next rental apartment here.
Spain’s Ley de Vivienda came into force on May 18th, with far-reaching changes for tenants and landlords across the country.
READ ALSO: Five key points about Spain’s new housing law
But one clause which initially escaped the headlines, regarding the method of rental payment, is now proving controversial.
According to the new law, it is no longer legal for renters to pay landlords in cash, as the newly implemented legislation states that the rent must be paid “by electronic means”.
In other words, tenants can’t put cash in an envelope and hand it to their landlord, it has to be a bank transfer with a digital footprint.
The only exception to the rule is when either renter or landlord “do not have a bank account or access to electronic payment means”.
The decision means that Spain is the first eurozone country to ban rental payment in cash, en metálico as they say in Spanish.
According to Alejandro Marín, a delegate for leading Spanish consumer watchdog OCU in Zaragoza, the new rule “limits the rights of consumers”, in particular “elderly people and vulnerable groups”.
These same population groups have been affected by the spike in bank branch closures in recent years in Spain, particularly in rural areas, as banks attempt to cut costs and give priority to online banking.
“All this is being done under the premise of transparency, but they’re limiting rights. This rule could be in direct conflict with the amendment of the Law in Defence of Consumers and Users approved last year which establishes the possibility or the right of paying in cash”, Marín argued, adding that cash “should not be associated with being a dirty means of payment”.
But the Spanish government has justified the clause claiming that “the usage of cash payments considerably facilitates fraudulent behaviour”.
READ ALSO: What are the penalties and prison sentences for tax evasion in Spain?
In 2021, Spain also lowered the limit on cash payments people can make down to only €1,000, as part of its fight against tax fraud and money laundering.
The ban on rent paid in cash also potentially clashes with this legislation, as any rent under €1,000 can purportedly be paid in cash according to this other pre-existing law.
READ MORE:
Comments
See Also
Spain’s Ley de Vivienda came into force on May 18th, with far-reaching changes for tenants and landlords across the country.
READ ALSO: Five key points about Spain’s new housing law
But one clause which initially escaped the headlines, regarding the method of rental payment, is now proving controversial.
According to the new law, it is no longer legal for renters to pay landlords in cash, as the newly implemented legislation states that the rent must be paid “by electronic means”.
In other words, tenants can’t put cash in an envelope and hand it to their landlord, it has to be a bank transfer with a digital footprint.
The only exception to the rule is when either renter or landlord “do not have a bank account or access to electronic payment means”.
The decision means that Spain is the first eurozone country to ban rental payment in cash, en metálico as they say in Spanish.
According to Alejandro Marín, a delegate for leading Spanish consumer watchdog OCU in Zaragoza, the new rule “limits the rights of consumers”, in particular “elderly people and vulnerable groups”.
These same population groups have been affected by the spike in bank branch closures in recent years in Spain, particularly in rural areas, as banks attempt to cut costs and give priority to online banking.
“All this is being done under the premise of transparency, but they’re limiting rights. This rule could be in direct conflict with the amendment of the Law in Defence of Consumers and Users approved last year which establishes the possibility or the right of paying in cash”, Marín argued, adding that cash “should not be associated with being a dirty means of payment”.
But the Spanish government has justified the clause claiming that “the usage of cash payments considerably facilitates fraudulent behaviour”.
READ ALSO: What are the penalties and prison sentences for tax evasion in Spain?
In 2021, Spain also lowered the limit on cash payments people can make down to only €1,000, as part of its fight against tax fraud and money laundering.
The ban on rent paid in cash also potentially clashes with this legislation, as any rent under €1,000 can purportedly be paid in cash according to this other pre-existing law.
READ MORE:
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.