Adjustments to rental fees, fresh contracts, and lease extensions.
Guidelines for modifying current agreements
Rent increases are no longer tied to the Consumer Price Index, and it is important to note that there are now restrictions on the maximum percentage increases. Specifically, for the year 2023, the limit is set at 2%, while for 2024, it is 3%. Moreover, there are additional regulations that apply to subsequent years, spanish property solicitors can provide more information on this.
When the landlord is not a major property owner, both the tenant and the landlord can mutually agree on the rent increase. However, if they fail to reach an agreement, the maximum allowable increase is limited to 3% of the existing rent.
All other agreements follow the same reasoning, as they cannot supersede the new Housing Act.
Guidelines for fresh contracts
The Housing Act of 2023 introduces a limit on the rental prices of new lease agreements in areas experiencing high demand. According to this act, the rent charged for a property cannot surpass the amount stated in the previous lease for the same property, considering the rates over the past five years. Additionally, the rent can be increased by the current year’s update percentage, which is 2% for 2023 and 3% for 2024.
It is crucial to emphasize that the landlord is not permitted to transfer the responsibility of paying any additional charges or expenses to the tenant if they were not originally mentioned in the previous rental agreement.
Small landlords have the opportunity to raise the rent by a maximum of 10% based on the previous rental value if the property has remained under their ownership for the two years preceding the contract agreement.
- The implemented enhancements have led to a reduction of 30% in the consumption of non-renewable energy.
- Has been enhanced for better accessibility.
- If the duration of the new contract extends to 10 years or beyond, the same 10% increase will be applicable as well.
- Large landlords are required to adhere to the price containment index.
- properties that have not previously been available for rent are required to adhere to the price restrictions established by each Autonomous Community for the initial lease agreement.
Guidelines for Extending Contracts
If either the landlord or tenant does not provide proper notice to terminate the contract (four months for the landlord, two months for the tenant), the contract will automatically renew for one year, up to a maximum of three times. In urban areas, it is obligatory for landlords to accept tenants’ requests for lease extensions.
The only time the owner would require the property for their personal use or for their immediate family, or when a couple is going through a divorce and needs to divide their shared assets, are situations where the lease can be suspended. It is important to note that In both cases, there are specific deadlines and regulations that apply.
Exploring the Financial Pros and Cons for Property Owners
To motivate property owners to list their properties for rent, the Housing Act offers incentives to small landlords who rent out properties in areas with high demand and at affordable rates. Landlords are eligible for tax deductions on their net rental income based on the following percentages:
A discount of 50% will be applied to new agreements.
if the property has undergone renovations within the two years before signing the contract, there will be a 60% reduction in price.
Young adults between 18 and 35 or participants of subsidized rental programs can benefit from a 70% reduction in the property’s rental cost.
A significant discount of 90% is applicable to new contracts that have a minimum rent reduction of 5% compared to the previous agreement.