Housing draft extends leases to 2028

Decreto Maricarmen: leases until 2028 and 100% IRPF (Spanish income tax) reduction

The Executive has set a date for the extension: rental contracts hold until the end of 2028. The draft, still under negotiation, bundles together three things rarely seen together: forced extension, protection for vulnerable tenants, and a battery of tax advantages to encourage landlords to rent cheaply. The word "build" appears nowhere. And without building, everything else amounts to sharing out the shortage that already exists.

Suspension of evictions: three years, reviewable every twelve months

The text suspends the eviction of vulnerable tenants without alternative housing. The suspension is reviewed every twelve months and has a limit of three years —not a day more—, which turns the protection into something temporary and discretionary: it depends on someone certifying each year that the situation remains the same. The detail most discussed is the scope. Landlords with two or fewer properties are excluded from the suspension, and the draft contemplates public compensation for small landlords for non-payments and expenses when the rule ultimately affects them. Some see this as squaring the circle, while others argue the opposite: that those with more than two flats will simply stop renting to risky profiles, and that the protection will end up being a dead letter precisely for those who need it most.

Tax incentives: from 100% IRPF reduction to 50%

The tax carrot is the most generous part of the draft:

• Up to 100% IRPF reduction if rent is lowered by more than 5% or set below the reference index in certain cases.
• Up to 95% for renting to under-35s in stressed areas.
• 85% for rentals to young people up to 35.
• 50% if the price is maintained when changing tenants.

On the other side of the table, a deduction of up to 10% of the rent for young tenants in stressed areas with incomes below 33,007 euros. The problem with designing incentives this way is that the landlord does not need to rent better: they need to rent to the profile that gives them the biggest tax break. And that profile has an age, an income cap and a postcode.

0% ICO loans and VAT increase on tourist housing

For demand, the draft opens 0% ICO (Instituto de Crédito Oficial) loans for young people: they would cover 20% of the home or up to 50,000 euros. It is the measure that most recalls, according to some comments in the thread, the 100% mortgages of 2008, now with a zero interest rate. In parallel, seasonal rentals are regulated and VAT on tourist housing is raised to 21%.

A royal decree law without budgets and with powers up in the air

The legal form chosen adds noise. A royal decree law allows legislating without waiting for the budgets, but it needs validation in Congress, and there the text faces two fires: some partners will read it as an interventionist measure that invades regional powers, and others as insufficient. The calculation made aloud is that, at most, it will last a month in force.

Beneath it is the background regulatory noise. Spain passes around 900 laws and 960,000 pages of regulation per year, according to the data handled on official gazettes: some 203,000 state pages and 757,000 regional ones. Each new incentive adds to that volume, and each new volume adds to the uncertainty of those who have to decide whether to rent or not.

The case that gives the decree its name

The package is already known as the Decreto Maricarmen, and the case that brought it to the fore is that of the siblings who owned a flat and ended up accepting, after negotiation, 30% of the tenant's pension, about 500 euros. A private agreement, a specific figure and no new rule involved. It is the best demonstration of what is being discussed these days: the conflict was resolved by hand, case by case.

With the numbers on the table, it is likely that the text reaches Congress cut down and comes out, if it does, with a short lifespan and less effect than announced. The extension until 2028 has a chance of staying; the tax incentives are more fragile, because they depend on someone voluntarily giving up charging more. If housing supply does not move, in a year there will be another draft and another proper name.