The fall of the rent decree-law, with the automatic extension of contracts and rent caps for this year and the next, does not close or cool any debate around how to face the crisis.
Sumar wants to recover the measures with a new decree-law with other proposals. But now, the Ministry of Housing wants to take the initiative. Its plan is clear: reactivate the bill to regulate seasonal rentals and by rooms and incorporate tax incentives there.
What incentives does the Ministry propose?
In full push by Sumar to approve an automatic renewal of contracts, President Pedro Sánchez made explicit that his proposal was that of fiscal incentive. He proposed to deduct from personal income tax all the gains of landlords who decided not to raise the rent price upon renewal of their contracts, within a ‘pack’ that would include the regulation of seasonal and room rentals agreed upon in Congress.
This reduction is contrary to what is established in the Housing Law, which set this reduction at 50% and limited it to a maximum of 90% when the dwelling was located in a stressed area and its rent decreased by at least 5%.
The proposal ended up in a drawer due to the ‘flight’ of the left-wing partners, who rejected any benefit for landlords.
Later, the Ministry of Housing rescued the reformulated proposal, with a graduation in tax advantages, which are now 50% in general. They could only reach 100% if landlords lowered the rent and the reduction would fall if they decided to raise it. The deduction, in any case, would not reach 0% to continue incentivizing residential rentals and differentiate them from tourist or seasonal rentals.
Based on that proposal, already conveyed in due course to the groups, Housing expects to resume contacts this week.
Is there water in the pool?
Housing believes that the conversations to try to move forward the repealed decree-law on rents prove that there is a willingness among the groups to reach an agreement, renouncing their postulates.
Sumar opened up for the first time to accepting tax cuts, as Junts intends. However, that provision was conditioned on achieving the extension of contracts and the caps on price increases. It remains to be seen what its position will be if those measures do not enter the equation.
What incentives does Junts propose?
Carles Puigdemont's party, which flees any negotiation with the Government after having broken relations, registered in Congress its proposal to face the housing crisis, fundamentally with tax reductions.
Through a non-binding proposal, they proposed new deductions in personal income tax to compensate for expenses paid in the payment of a mortgage, rent, and savings deposited for the purchase of a first home or the rehabilitation of the habitual residence.
Specifically, they propose that the taxpayer can deduct up to 15% for these expenses, with a maximum annual base of 11,630 euros per taxpayer. In this way, the deduction could reach a maximum of 1,744.5 euros.
In the case of the deduction for rent expenses, Junts proposes that only tenants with a taxable base of up to 33,007.20 euros in their declaration can benefit.
Along with this, they propose establishing a regulation complementary to the one already provided for in the Civil Code to allow mortgagors of first homes the extinguishment of their debt when it is transferred to a fund. Junts proposes that the debtor can settle their mortgage at the price at which their mortgage has been transferred within ninety days of being notified of the operation.
Sumar will present its proposal this week
For its part, and independently of the Housing proposals, Sumar intends to recover the extension of contracts and the caps in a new decree-law. But, this time, accompanied by other measures that can convince Junts and PNV.
And it does not intend to make you wait. The Minister of Culture and spokesperson for the coalition of parties, Ernest Urtasun, assured this Monday that this very week they would present a new package of measures that “responds to a broad and consensual agreement”.