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Local Spain
10-04-2025
- Business
- Local Spain
Barcelona to limit temporary rent prices so landlords stop skirting rules
The Catalan regional government has passed long-awaited rules to better regulate temporary rental contracts (contratos de temporada) and room rentals in the northeastern region. The legislation aims to control seasonal rental contracts and will limit the conditions, such as price caps, under which they can be rented for tourist or recreational use, a common method used by landlords to get around rules and bypass price caps. This comes at a time of crisis in the rental market in Catalonia and the country more widely. Nine out of ten tenants in Barcelona now have temporary rental contracts, according to a December 2024 study published by the Barcelona Urban Research Institute (IDRA). T hree quarters of rental ads in Barcelona are for rooms, which are also usually done via seasonal or temporary contratos de temporada. The reason why temporary or seasonal rental contracts under a year in length have become so common in Barcelona and around Spain is that landlords don't have to abide by price controls as they're not deemed long-term residential contracts. Barcelona and Catalonia already have price controls for 'stressed rental areas' which mean that long-term rentals, including new ones, cannot be above a certain price, and on a national level there's a rent cap on existing long-term contracts that prevent year-on-year increases of more than around 3 percent, also in place in Catalonia. Therefore, if a landlord rents out a property to a tenant for between 32 days (anything under is considered short-term rental) and 364 days (anything over is deemed a long-term contract) they don't have to abide by the Urban Leasing Law (LAU) as they're considered to be temporary rentals. Facing this, a deal was struck between the ruling Catalan Socialists and smaller parties ERC, Comuns and CUP to rubber stamp a decree-law on housing in the regional Parlament and move forward with processing it as a bill. The main change is limits on the type of rentals used for seasonal contracts. They can be recreational, for which there is no price cap, or residential, for which there are. Contracts must meet certain requirements for offering a seasonal rental for recreational use as they are more financially lucrative. However, the idea behind the new rules is that new contracts must be mainly residential. Therefore, seasonal contracts for residential use will be subject to the price ceiling set by the Housing Law for conventional rental contracts, a move intended to discourage the method used by many owners to circumvent the rules. 'In the case of seasonal rentals, the new contracts must prove their use and purpose, and the residence of the person renting them,' said Susanna Segovia of Comuns. Thus, only if a person can prove that they have a fixed home can landlords offer seasonal rentals for recreational use. 'This is a very good agreement, a maximum agreement,' Segovia added. The agreement also extends protections on housing that was due to expire with the declaration of further 'stressed rental areas', and the regional government will start a register of large property owners. There was already an inventory of companies and investment funds with multiple properties, but the agreement allows for the inclusion of individuals on the database in order to more easily apply property transfer taxes. Around a month ago, the Socialists and Comuns agreed to increase the tax from 10 percent to 20 percent for large property owners. Students who move to another city during the academic year will be able to obtain seasonal rentals for residential use, for which the price will be subject to limitations. The new regulation also limits room rentals: the sum of all rents may not exceed the ceiling established by state law.
The Guardian
05-04-2025
- Business
- The Guardian
Thousands in Spain join nationwide march to protest against housing crisis
Tens of thousands of people have taken to the streets of Spain in the latest protest against housing speculation and to demand access to affordable homes. Organisers claim that up to 150,000 joined the protest in Madrid while smaller demonstrations were held in about 40 cities across the country. Protesters from Málaga on the Costa del Sol to Vigo in the Atlantic northwest chanted 'end the housing racket' and 'landlords are guilty, the government is responsible'. Valeria Racu, a spokesperson for the Madrid tenants' union, called for rent strikes such as those mounted recently in some Catalan coastal towns. 'This is the beginning of the end of the housing business,' Racu said. 'The beginning of a better society, without landlordism and this parasitical system that devours our salaries and our resources.' The union says 1.4m Spanish households spend more than 30% of their income on housing, 200,000 families more than 10 years ago. Housing has become the number one social issue in Spain as a combination of property speculation and tourist apartments have driven the cost of rented housing beyond the reach of all but the most wealthy. Official statistics suggest there are at least 15,000 illegal tourist apartments in Madrid while in Barcelona the city council says it will not renew the existing 10,000 tourist apartment licences when they expire in 2028. What was initially a problem in areas with a high concentration of tourists, such as the Balearic and Canary Islands, as well as Barcelona, has become an issue across the country, with protests in Seville, Valencia, Santiago de Compostela, Burgos and San Sebastián, among other cities, where protesters rattled sets of keys in what has become a symbol of discontent over the lack of affordable homes. In the Balearics the average rent for a small apartment has risen by 40% in five years to about €1,400 (£1,190) a month, more than the average monthly salary of those working in the hospitality sector, the region's main industry. The young have been hardest hit as housing costs have soared while salaries remain stagnant. A study published by the Spanish youth council showed that a lack of affordable housing meant that last year 85% of young people under 30 were still living with their parents. In Barcelona, where thousands gathered in the Plaça d'Espanya, protesters demanded a 50% reduction in rents, indefinite leases and an end to property speculation. According to the Catalan housing agency, rents in Barcelona have increased by 70% in the past 10 years. Salaries rose by 17.5% over the same period. 'The housing game is rigged in favour of anyone with assets while tax incentives encourage them to acquire more and more property,' said Jaime Palomera of the Barcelona Urban Research Institute and the author of El Secuestro de la Vivienda (The Kidnapping of the House). 'The rich have got richer since the financial crash in 2008 and the Covid crisis and they have used this wealth to buy more and more property, constantly driving up prices and increasing inequality. 'The fact is that property offers a better return than other investments. We have an economic model that encourages investment in assets that don't create any value but simply use rent as a way of sucking money out of the middle classes.' The solution, Palomera says, is to tax those who own multiple properties. He cites the example of Singapore, where the state offers financial support to first-time buyers but imposes an ascending tax regime on second and subsequent homes.
Local Spain
13-03-2025
- Business
- Local Spain
How Spain's new temporary contract rules make it hard for foreigners to rent
We recently wrote an article on why so many Americans are moving to Spain recently and some of the issues they face when they arrive here, and one of the most common challenges was finding a place to rent. Many other foreign nationals are also taking to Facebook groups to complain about the issue and ask for help finding somewhere to live. The problem has come about not only because of Spain's current housing crisis, in which many locals are also finding it near impossible to find access to affordable housing, but also because of one of the government's solutions to this issue. According to a recent report called 'Living in rented accommodation: insecurity guaranteed by law', published by the Barcelona Urban Research Institute (IDRA), nine out of 10 rentals in Madrid and Barcelona have temporary contracts. These are seasonal or short-term rentals, not as short as tourist rentals, but just under the amount of time to be classed as a permanent rental – typically between 32 days and 11 months. Rental contracts of over a year however are deemed long-term and by law can be extended up to five years. But if landlords don't want tenants to have the option of staying for five years and want to restrict other tenancy rights, they choose to make their rental a temporary one instead. This means that caseros (landlords) can sidestep the tenancy rights enshrined by Spain's Urban Leasing Law, and they can charge more money without being subject to rent caps and price controls, as temporary contracts are not covered by these recent reforms that apply to long-term contracts. In order to put more permanent homes back on the market, in late 2024 the Spanish government gave the green light to a law to regulate temporary and room rentals. This meant modifying the law to force landlords and tenants to 'justify the need for temporary rentals'. As a result, tenants and landlords now need to give a reason as to why they have a temporary let, and usually it falls on the tenant to do so. For example, this entails providing proof of enrolment letter from a university if you're doing a course, or showing you have a temporary job contract, or evidence that you're receiving temporary medical treatment in Spain. As a result, more and more estate agencies, particularly in bigger cities like Barcelona where there are so many temporary rentals, are asking for proof of why you need to rent for under a year. Foreigners arriving in Spain on residency authorisations such as the Non-Lucrative Visa or the Digital Nomad Visa are typically here for one year or more, so this doesn't qualify as a temporary reason. Therefore, they are being asked to provide proof for their need to rent temporarily but their situation - whether as retirees on the NLV or digital nomads on the DNV - does not qualify as an official justification to need a temporary contract. To be clear, the vast majority of these foreigners want to rent long-term. The only reason that they're looking at temporary rentals is because there are simply not enough permanent rentals being advertised. This is a huge stumbling block for many foreign residents who have recently moved to Spain and one that authorities appear to not be aware of. This catch-22, combined with the fact that many landlords refuse to take on tenants without a Spanish job contract, makes it extremely difficult to find a place to rent, particularly in big cities. Valencia newcomer Dayna Rubalcava told The Local Spain that 'Finding an apartment was a bit challenging—prices have gone up significantly in the past two years, and there isn't a lot of availability outside of holiday rentals'. American Eric Kenney, who also agreed moved to Valencia, agreed. "Finding a place to rent was our biggest challenge. A lot of places won't rent to people with foreign or investment incomes,' he said. Brett Formosa, who moved to Madrid from New York, also found a similar issue. 'Finding a place to live was challenging as real estate agents really didn't respond to us. We ended renting from a short-term rental company which had pros and cons'. Many other readers as well as users of foreigner Facebook groups have complained of the same problem. One user wrote on the Non-Lucrative Visa Facebook page: 'My partner and I moved to Barcelona under NLV, 2 weeks ago and since then we have been looking for a flat to rent day and night…. Around 99 percent of ads on Idealista are between 32 day - 11 months only. Because of this, they are legally obliged to justify that tenants are in Spain for a temporary reason (school or health treatment etc). As we are here with NLV, and cannot give any document proof, agencies do not even bother to arrange a viewing'. In order to solve the issue of the skyrocketing number of temporary rentals, the Spanish government has come up with another plan to force landlords to register all short-term lets and rooms. The new rule means that for a home to be able to be marketed on digital platforms, it must appear in a new registry – the Ventanilla Única Digital de Arrendamientos first and meet all the legal requirements to function as a seasonal rental. The regulation came into force on January 2nd 2025, but its effective application will not be until July 1st 2025, giving a transition period for companies and administrations to adapt appropriately to the new requirements. The Catalan government and left-wing regional party ERC are also in the process of negotiating an agreement which will regulate temporary rental contracts and room rentals in the northeastern region. This may mean that for the next few months, at least until these new measures are passed, the high number of temporary rentals will remain and it will still be difficult to find a place to rent for foreign newcomers in Spain.
Local Spain
04-03-2025
- Business
- Local Spain
Catalonia vows to limit temporary rents so 'smart arse landlords stop cheating'
The Catalan government and left-wing regional party ERC are in the process of negotiating an agreement which will regulate temporary rental contracts and rental by rooms in the northeastern region. Nine out of ten tenants in Barcelona now have temporary rental contracts, according to a December 2024 study titled 'Renting: insecurity guaranteed by law', published by the Barcelona Urban Research Institute (IDRA). Furthermore, three quarters of rental ads in Barcelona are for rooms, which usually also fall under the category of contrato de temporada. The reason why temporary rental contracts under one year in length have become so common in Barcelona and other parts of Spain is that landlords don't have to abide by the recent price controls implemented in both Catalonia and other parts of the country, as they're not deemed long-term contracts. Barcelona and Catalonia have price controls for 'stressed rental areas' which mean that long-term rentals (even new ones) cannot be above a certain price, and on a national level there's a rent cap on existing long-term contracts that prevent year-on-year increases of more than around 3 percent, legislation also in place in Catalonia. Therefore, if a landlord rents out a property to a tenant for between 32 days (anything under is considered short-term rental) and 364 days (anything over is deemed a long-term contract) they don't have to abide by the Urban Leasing Law (LAU) and above rules, as they're considered to be temporary rentals. Furthermore, these rental contracts don't have to be five years long by law and can thus kick out tenants sooner, the landlords can set the price they want and increase it as they see fit, and estate agencies also exploit the lack of rights of temporary tenants to ask them for fees that long-term tenants cannot be charged. More often than not these seasonal or temporary contracts are advertised on portals such as Idealista as being 11 months long. What Catalonia's ruling Socialists and the ERC are now looking to do is make sure that any rental contract that is not specifically of a temporary nature due to work, study, medical or any other justified reason must be automatically a long-term rent. In the words of Elisenda Alamany, secretary general of ERC, this will prevent 'some smart arse people from cheating', breaking the price limit rule and 'speculating with housing'. The measure would also apply to 'fake temporary contracts' by rooms that 'trick' the system, as tenants usually stay for more than a year, but are at the mercy of price increases that temporary contracts often come with. Last year, Spain's left-wing national government had planned to tighten its grip on temporary accommodation rentals as a potential means of making more long-term rentals available, but the country's right-wing parties rejected the proposal in parliament in September. There's been no sign of any progress on this front since then - only forcing landlords to list their temporary and room rentals on a government register - which has spurred Catalan regional president Salvador Illa to listen to the request of taking the matter of temporary accommodation into the Generalitat's own hands. 'Rent prices in Catalonia as a whole are extortionate,' Alamany stated. 'That means that a big proportion of Catalans have to spend a large part of their salary to pay for them.' In the last five years, seasonal or temporary rents in Barcelona has multiplied by six, and in Catalonia the average monthly rent has gone from €584 to €1,136 (90 percent more). 'That's why we must avoid this mockery,' the ERC politician concluded.
