Features of the new Rental Law 2024: The Housing Law 2024
In response to the rent increases that have occurred in recent years, the Housing Law in Spain (Law 12/2023 of 24 May on the right to housing) implemented the possibility of controlling and establishing a rent price cap in Barcelona and other cities, as well as granting authority to the respective autonomous communities. In this article, as Notaries in Barcelona, we want to explain everything about how the new 2024 rental law in Catalonia is applied and inform you about the features of the rent price cap in Barcelona.
The 2024 Housing Law sets a limit on rental prices in Barcelona
Among the objectives that the housing law in Catalonia aims to achieve is the need to establish affordable housing for its fellow citizens, especially in those areas considered to be under pressure. This, in fact, has been the first step: to designate these pressure zones in order to establish a rental study. Thus, the authorities have established a reference index that will prevent rent increases for a set period and which relates to the value of the property and its average price in the area.
It is also determined in this “new rental law 2024” that restrictions will apply from the declaration of the zone as pressured in new rental contracts from large landlords and for properties that have not been rented in recent years.
Furthermore, it establishes that those considered small property owners who must renew a rental contract may set the price according to the previous value plus 3%, while contracts between individuals may not exceed the last rent of the lease contract.
On the other hand, this law has been amended by Decree Law 6/2024, of 24 April, on urgent measures in housing matters (link to view decree law). This is due, as stated in the preamble, to the significant increase in “seasonal rentals” as a mechanism to circumvent the price limitation, by limiting the lease period to 11 months. Thus, the aforementioned preamble declares that "real estate portals currently show an increase in the stock of properties intended for what is called “seasonal rental”, when in reality they refer to housing leases but with a temporal limitation. This fact indicates that the supply of rental housing for permanent residence has decreased by 24%. Currently, in Barcelona, 30% of the total properties are rented seasonally.”
For this purpose, article 66 bis is added to law 18/2007 on the right to housing, including these price limitations on temporary rentals, stating such character and its reason in the contract. On the other hand, this does not apply to holiday or recreational rentals, as the regulation itself points out.
The 2024 rent increase regulated by the New Rent Law 2024
There is no rental price limit in Barcelona, but it will depend on the study of the areas and the characteristics of the property along with its previous rental contracts.
140 municipalities in the autonomous community of Catalonia are considered high-demand areas, including the four capitals and, for the majority of the rest, towns belonging to the metropolitan area of the capital. You can consult them in the BOE Resolution on high-demand areas in Catalonia. Therefore, most of the properties in Barcelona city will be affected by the new maximum limits.
FAQs about the New Rental Housing Law
These are the most frequently asked questions about the commonly known new rental law 2024.
The reference index will begin to be applied from Saturday 16 March to indicate the rental price limit in Barcelona and the rest of the municipalities.
This regulation has a temporary validity of 3 years, with the possibility of being extended annually.
The municipalities considered to be under pressure are those in which the cost of rent or mortgage, plus expenses and utilities, exceeds 30% of the average household income. Also considered are those where rent or mortgage, in the last 5 years, has increased by a percentage of 3% compared to the average of the Autonomous Community.
A large holder is considered to be anyone who owns more than 5 homes in a stressed area or more than 10 outside of it. Therefore, the law establishes a quantitative criterion, which applies to both natural and legal persons.
At the MIVAU (Ministry of Housing and Urban Agenda) you can obtain the range of values for a property rental and find out if it is located in a pressured area.
Large landlords will have to rent for an amount that does not exceed the reference index of the rental price, whether or not the property has been rented in the last five years.
In the case of properties that were already rented by a person who is not considered a large holder, when a new rental is made, whether with the same tenant or another, the same rental amount may be maintained, even if it is higher than the new limits of the tense areas.
However, if the property had not been rented and the owners want to start renting, even if they are not large holders, they must comply with the new rental limits.
The only reason for which the price in a contract may be increased by 10% is when the property has undergone a rehabilitation with accessibility improvements, a renovation two years before the signing of the new rental contract (which results in a 30% saving of non-renewable energy) or when the lease contract is signed for a period of 10 years.
JLA Notaries, up to date with the Housing Law in Catalonia and Legal News
As experts in real estate and contractual services in Barcelona, we hope that this article about the features of the new rental law 2024 and the rental price limit in Barcelona has been of interest to you. If you want to learn more about the Housing Law, we recommend the following reading:
At our notary office in Barcelona, we can assist you with operations related to housing and its purchase and sale in Barcelona, offering you the highest guarantee and legal security in your transactions. Contact us by email at bcn@jlanotarios.com, by accessing the contact form on our website or by calling the telephone number 93 159 17 62.
