Spanish government to reform rental market

Wednesday, August 29, 2012

Spanish government to reform rental market

The Spanish government has announced plans for a series of measures that will make it easier for property owners to rent their homes, in an attempt to encourage investment into the country's ailing economy.

Among the proposals expected to be agreed in the next few weeks is a new ruling which will make it easier for landlords to evict tenants who avoid paying their rent. This would cut down the current drawn-out process of eviction, giving defaulters just 10 days to pay their arrears or face having to leave their rented accommodation.

The new proposals are also expected to give the landlord power to get rid of a tenant with just two months notice if they need the house back for themselves, a partner or blood relative.

Perhaps most interestingly for buy-to-let investors, foreign buyers will be given tax breaks of 60 per cent from income generated from full-time rented apartments and 100 per cent if the properties are rented by 18- to 30-year-olds who are not eligible for state rent support.

“These are clearly steps to encourage investment, especially from abroad, in Spain's real estate market to help absorb some of the overhang of housing stock,” said Alexander Pelteshki , an analyst from ING Financial Markets.

The measures have generally been seen as positive by developers and agents, who feel that this could be the shot in the arm that the country's property market and economy are crying out for.

“We need these reforms like a desert needs rain,” said Fernando Encinar, co-founder of, Spain's largest property website. “A dynamic and functioning rental market is essential for labour mobility and a healthy economy.”

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