Public housing expansion and its effects on rents
The Spanish government’s plan to provide more state-owned housing could significantly reduce the number of tenants in the private rental market. This shift may lead to lower rental prices as demand for private rentals decreases. For property investors, understanding these dynamics will be essential for evaluating potential returns.
New public housing company and priority purchase rights
A legal mechanism will allow the newly created Public Housing Company to have priority in purchasing homes and land. This could reduce opportunities for private developers, potentially influencing land valuations and limiting availability for private-sector projects.
Land law reforms and modular construction innovation
The reform of Spain’s Land Law and the PERTE for Housing aim to modernise construction practices. By promoting industrialised and modular construction, the government hopes to lower costs and accelerate housing delivery, potentially impacting property development timelines and budgets.
Mobilising existing housing for affordable rentals
The government plans to mobilise vacant properties through public guarantees that protect owners and tenants. A rehabilitation program will also provide aid to those renovating homes for affordable rentals, requiring a minimum commitment of five years. These measures aim to increase rental housing stock, potentially stabilising rents in high-demand areas.
Tax incentives and reforms
The policies include a 100% personal income tax exemption for owners renting properties at affordable rates based on the Reference Price Index. Additionally, tourist rentals will face increased taxation, aligning them with other economic activities. These changes could reduce the profitability of tourist apartments, shifting focus toward long-term rentals.
Restrictions on non-resident foreign buyers
Non-resident, non-EU buyers will face higher taxes, with levies reaching up to 100% of the property value. This could deter foreign investment, particularly in popular regions, while opening opportunities for local buyers.
Support for young people and new housing plans
With €20 billion allocated for rent, purchase, and rehabilitation programs, more than 1.5 million households stand to benefit. Young people, in particular, are supported through €250 monthly rental vouchers and guarantees for first-home purchases. These initiatives aim to improve accessibility and encourage homeownership among younger generations.
Crackdown on seasonal rentals
Communities of neighbours will be empowered to limit tourist apartments, and a single register for seasonal accommodations will be created. Additionally, fraud regulations for seasonal rentals will be tightened, with increased inspections funded by a new government fund. These measures are designed to restore balance in neighbourhoods affected by excessive tourist rentals.
Spanish property market
The Sánchez government’s sweeping housing reforms signal significant changes for Spain’s property market. From lowering rents through public housing expansion to limiting foreign investment and regulating tourist rentals, these policies aim to address affordability and accessibility. Property owners, investors, and developers must navigate this evolving landscape carefully to adapt to the shifting dynamics of Spain’s housing market.
