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Government eliminates the six-month extension of rental agreements

The measure, which aimed at the possibility of extending for six months the term of rental contracts to support tenants, had been approved last year. This time it was eliminated from the package of measures to take action in the face of rising prices due to the increase in inflation.

By eliminating this measure, landlords will have less commitment with tenants. The Council of Ministers approved on Tuesday a Royal Decree-Law to extend some anti-crisis measures that expire this Friday, June 30. However, the six-month extension for rental contracts is not included in this list.

What will be applied is the limitation of the annual update of the rent in lease contracts, with an increase that does not exceed 2%. This limitation extends until December 31, 2023. According to the Housing Law, this year 2023 the increase would be a maximum of 2%, and for 2024 3%, before December 31 of next year.

With respect to the eviction procedure and evictions for vulnerable households when there is no housing alternative, the Council of Ministers has maintained the suspension until the end of the year.

In addition, the Council of Ministers approved the 20% guarantee line for young people and families with dependent minors, for partial coverage by the State of mortgage loans: The maximum amount would be up to 2,500 million euros.

The necessary requirements have also been established to empower Mitma and the agency under the Ministry of Economic Affairs and Digital Transformation to facilitate access to acquiring the first home within Spain to groups that do not have the necessary savings. With this, the idea would be to enable the acquisition of 50,000 homes.

In short, contrary to other measures that will continue, such as the reduced VAT on foodstuffs, the six-month extension for rental contracts will not be extended. This extension came from before, from the times when it was necessary to take action against the pandemic, so that tenants would not have to look for another place to live when their contract ran out. This extension condition was also applied so that tenants would not have to leave their homes immediately when they could not pay the new conditions demanded by the landlords.