Spain’s housing crisis: Pedro Sanchez promises landlords 100% tax break if they freeze rents and slams seasonal lets as ‘speculation and greed’

PRIME Minister Pedro Sanchez has announced ‘urgent and decisive’ measures to address Spain’s deepening housing shortage.

Landlords that extend long-term leases without increasing the rents in the future will be given a tax exemption of 100% on rental income.

Sanchez spoke Monday at the launch of the Campamento housing project, which will build 10,700 new homes on an ex-military site in Madrid.

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The government will also take action against fraud and abuse of rental contracts.

According to the Ministry of Housing, around three million households in Spain live in rented housing.

Sanchez: “We will continue to intervene in the rental market.”

Tenants benefit because they are able to stay in their homes at no additional cost. Owners also gain because they do not have to replace the home.

“The state also wins, because we take our responsibility to use public resources for the welfare of the people.”

Sanchez said that tighter regulation on short-term rental and tourist accommodation is at the heart of the new initiative. These rentals have been distorting the local housing market.

These measures aim to stop the practice of misclassifying rental agreements into temporary leases.

There will be measures to stop abuses of room rental.

The limit would be set at the same level as a whole apartment in order to control room rentals.

Sanchez added that the government will also tighten up conditions for rental agreements for short-term periods and introduce sanctions if they are used as an alternative to long-term leases.

The changes will come into force via a Royal decree ‘within a few weeks’.

Bank of Spain estimates the housing deficit in Spain at 700,000 units. This is 100,000 units more than its estimate for 2024.

Spain is one of the most visited countries in the world. It suffers from an acute housing shortage, which has been exacerbated by the tourism boom. In recent years, it has seen mass protests over the rising housing costs.

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