Main novelties of the law 12/2023 on the right to housing
- 02 June 2023
- Business Consultancy
Law 12/2023 of 24 May on the right to housing entered into force on 26 May 2023, with some exceptions. This law aims to regulate, within the scope of the State's competences, the basic conditions that guarantee equality in the exercise of rights and in the fulfilment of constitutional duties related to housing and, in particular, the right to access to decent and adequate housing and to the enjoyment thereof in affordable conditions.
The law also aims to strengthen the protection of access to information in housing purchase and rental transactions. It establishes, without prejudice to the principles and requirements contained in the applicable autonomous community regulations, the minimum information that the person interested in the purchase or rental of a home may require, prior to the formalisation of the transaction and the delivery of any amount on account, in an accessible format and on a durable medium, regarding the conditions of the transaction and the characteristics of the home and the building in which it is located. It may also require information on the detection of asbestos or other substances that are hazardous or harmful to health.
The owner and, if applicable, the person who intervenes in the intermediation of the rental of a habitual residence located in an area with a stressed residential market, must indicate this circumstance and inform, prior to the formalisation of the rental, and in any case in the contract document, of the amount of the last rent of the rental contract for a habitual residence that has been in force in the last five years in the same dwelling, as well as the value that may correspond to it in accordance with the applicable reference index of rental prices for dwellings.
For the purposes of the provisions of this law, a large property owner is defined as a natural or legal person who owns more than 10 urban properties for residential use or a built surface area of more than 1,500 m2 for residential use, excluding in all cases garages and storage rooms. This definition may be particularised in the declaration of stressed residential market environments to those owners of 5 or more urban properties for residential use located in said area, when so justified by the Autonomous Community in the corresponding justification report.
Law 29/1994 on Urban Leases (LAU) is also modified. These are the main novelties in habitual residence rental contracts entered into as of 26 May 2023:
1. In habitual residence rental contracts entered into after the entry into force of Law 12/2023, in which the mandatory extension period (first five years of the contract), or the tacit extension period (three years) ends, may be applied, at the request of the tenant.
- An extraordinary extension for a maximum period of 1 year. This will require the tenant to prove a situation of social and economic vulnerability and must be accepted by the landlord if the latter is a large landlord, unless a new rental contract has been signed between the parties.
- An extraordinary extension for annual instalments, for a maximum period of 3 years in the case of habitual residence rental contracts, in which the property is located in an area with a stressed residential market. It must be accepted by the lessor (regardless of the economic situation of the lessee), unless other terms or conditions have been established by agreement between the parties, a new lease contract has been signed with the appropriate limitations on the rent, or in the event that the lessor has communicated the need to occupy the rented property for permanent housing for himself or his first-degree relatives or for his spouse in the event of a final separation, divorce or marriage annulment sentence.
2. The property management costs and the costs of formalising the contract shall be borne by the lessor, without distinguishing between natural or legal persons.
3. The rental price of new housing rental contracts is limited when the property is located in an area with a stressed residential market.
In general, the rent agreed at the start of the new contract may not exceed the last rent of the habitual residence lease contract that had been in force in the last five years in the same property, once the annual rent update clause of the previous contract has been applied, without being able to set new conditions that establish the passing on to the tenant of fees or expenses that were not included in the previous contract.
It may only be increased, in addition to the amount resulting from the application of the annual updating clause of the rent of the previous contract, by a maximum of 10% of the last rent that had been in force in the last five years in the same dwelling, when any of the following cases is accredited:
- When the dwelling has been the object of certain renovation work, or renovation or improvement work involving a non-renewable primary energy saving of 30%, or accessibility improvement work, which has been completed in the two years prior to the date of the conclusion of the new contract.
- When the lease contract is signed for a period of 10 years or more, or when a right of extension is established that the tenant can voluntarily take advantage of, which allows him/her to extend the contract under the same terms and conditions for a period of ten years or more.
For residential leases where the lessor is a large residential landlord, and without prejudice to the above (general) limitation, and where the property is located in a stressed residential market area, the rent agreed at the start of the new lease may not exceed the ceiling of the price applicable under the reference price index system. This limitation shall apply to contracts entered into on 26 May 2023 and once the reference price index system has been approved.
This same limitation shall apply to residential lease contracts in which the property is located in a stressed residential market area and on which no residential lease contract has been in force in the last 5 years, provided that this is stated in the resolution of the Ministry of Transport, Mobility and the Urban Agenda, having justified such application in the declaration of the stressed residential market area.
The extraordinary tender for the annual updating of the rent of housing rental contracts provided for in Article 46 of Royal Decree-Law 6/2022 is maintained, at 2% in those contracts that have to be revised until 31 December 2023 and regulates a new limitation of 3% in certain cases:
The lessee of a housing rental contract subject to the LAU whose rent must be updated because the corresponding annual period of validity is fulfilled within the period between 1 January 2024 and 31 December 2024, may negotiate with the lessor the increase to be applied in that annual update of the rent, subject to the following conditions:
- In the event that the lessor is a large tenant, the rent increase will be that resulting from the new agreement between the parties, without the annual variation of the rent exceeding 3%. In the absence of such a new agreement between the parties, the rent increase shall be subject to the same limitation.
- In the event that the lessor is not a large tenant, the rent increase shall be that resulting from the new agreement between the parties. In the absence of such a new agreement between the parties, the rent increase to be applied may not exceed 3%.
It modifies the eviction procedure, the foreclosure procedure and the procedure for the auction of property in situations of social and economic vulnerability. It establishes the requirements for accrediting this situation and also whether or not the person is a major homeowner. The period for suspending foreclosures is extended to two months if the plaintiff is an individual and four months if the plaintiff is a legal entity.
In terms of taxation, it modifies the Personal Income Tax (IRPF) regulation to stimulate the rental of primary residences at affordable prices, modulating the current 60% reduction in the net yield of rental housing. The reduction percentages range from 50% to 90% depending on the case in question. The modification will enter into force on 1 January 2024.
It also enables local councils to demand a surcharge on IBI for those residential properties that are continuously unoccupied and without a justified cause for a period of more than 2 years, which can be between 50% or 150% depending on the case.
If you are interested in further information, please contact CINC Asesoría:
933 030 060 (Barcelona)
972 940 940 (Girona)
972 505 100 (Figueres)
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