At Finques Collell Riera we are specialists in rentals and their administration. More than 450 clients rely on our services and that's why we offer you this guide that can help you understand a little more the modifications that apply to the Urban Leases Law.

At Finques Collell Riera we are specialists in rentals and their administration.

More than 450 clients rely on our services and that's why we offer you this guide that can help you understand a little more the modifications that apply to the Urban Leases Law.

Since last March 16, regulations have been applied in Catalonia that limit rental prices, a measure that was foreseen in the Ley del Derecho a la Vivienda. And the Secretary of State for Housing and Urban Agenda, on March 15, published the resolution that regulates a reference price index, which will have to be applied in certain cases in those areas declared as having a stressed residential market.

WHERE DOES THE MEASURE APPLY?

Catalonia is the only autonomous community that has adhered to this measure. Specifically, 140 municipalities have been declared to make up the stressed area of Catalonia, of which 17 are in the province of Girona: Figueres, Girona, Salt, Sarrià de Ter, Banyoles, la Bisbal d'Empordà, Blanes, Lloret de Mar, Olot, Palafrugell, Palamós, Porqueres, Puigcerdà, Ripoll, Sant Feliu de Guíxols and Santa Coloma de Farners.

TO WHICH CONTRACTS DOES IT APPLY?

The limitation of the rental price applies to contracts signed from March 16, 2024, in towns that are in stressed areas. In addition, it will be necessary to distinguish whether or not the owner has the status of a large holder. Populations that are not stressed areas are not affected, and the rent price can continue to be determined freely.

WHO HAS THE CONDITION OF LARGE HOLDER?

In stressed areas, the definition of those owners considered as large holders also changes.

On the one hand, the previous regulation is maintained, that is to say, a large holder (in all territories, regardless of whether it is a stressed area or not) is considered to be the owner of more than ten urban properties for residential use or a built-up area of more than 1,500 m2 of residential use (excluding garages and storage rooms).

In Catalonia, in stressed areas, in addition to the previous definition, a large holder is also one who owns five or more properties for residential use located in all 140 municipalities.

HOW CAN I KNOW THE REFERENCE INDEX?

To consult the corresponding reference index, go to the website of the Ministry of Housing and Urban Agenda, at the following link https://serpavi.mivau.gob.es/ and enter the data requested. The result will show a lower and upper section on which the rental price can be applied.

HOW IS THE LIMITATION OF RENT PRICES APPLIED IN TENSIONED AREAS?

The determination of which rental price should be applied in the new contracts depends on whether the owner-lessor has the status of a large holder or not.

1. If you are not a major holder: the income from the new contract cannot exceed the income from the previous rental contract, duly updated.
2. If it is a large tenant: the income that is lower between the result of the reference price index and the income from the previous lease, duly updated, will be applied.
3. If it is a home that has not been rented in the last five years: in this case, the income resulting from the reference price index is applied directly to it.

IN WHICH CASES CAN YOU INCREASE THE RENT BY 10%?

It is allowed to increase the rental income up to 10% in four cases. which are:

1. When the home has been the subject of a completed rehabilitation in the two years prior to the date of signing the new lease.
2. When the home, in the previous two years, has been subject to rehabilitation or improvement actions where a 30% non-renewable primary energy saving has been proven.
3. When the home, in the previous two years, has been the subject of actions to improve accessibility.
4. When the lease is signed for a period of ten years or more.

WHAT TAX BENEFITS CAN THE OWNER GET?

Four reductions are introduced in the positive net yield applicable to personal income tax for residential leases, which will apply from January 1, 2024:

• 90% in a stressed area, if the new contract reduces the rental income by more than 5% compared to the last income.
• 70% when it is the first lease in a stressed area and the tenant is between 18 and 35 years old, i.e. public administration or non-profit entity.
• 60% when the home has been renovated in the two years prior to signing the lease.
• 50% in the rest of the cases.

Finally, all we have to say is that all our advisors remain at your disposal to clarify or comment on any of these aspects.