Spanish government proposes measures to tackle housing crisis

The Spanish government has approved two draft bills aimed at tackling the housing crisis and hopes that they will be approved in Congress this Friday.

The main bill proposes the suspension of evictions of vulnerable people until 2030. However, if a local authority acts to suspend such an eviction, it will have to reimburse the landlord.

Large companies and investment funds will also be prohibited from purchasing properties for less than 70% of their market value, with an exception in the case of social housing. This measure is intended to tackle the problem of “vulture funds” who buy up bad debts from banks and aggressively pursue tenants.

The decree also introduces a new 10% VAT charge on holiday rentals of less than one month (although it is unclear whether this would be extended to the Canarian IGIC tax system) and allows Ayuntamientos the option of imposing a council tax surcharge of up to 50% on holiday rentals. Companies who own more than four properties could face a 100% surcharge.

Tax breaks are also proposed for low-income households and landlords who reduce rents.

The government’s move comes after the eviction of 87-year-old Maricarmen Abascal in Madrid caused widespread protests in Spain, and will depend on support from its fragile ruling coalition.