The Government proposes an increase in the rental contract from 3 to 5 years

The Government proposes an increase in the rental contract from 3 to 5 years

The new government plans to extend the duration of rental contracts from 3 to 5 years and increase tax deductions for tenants and owners.

In recent months, they have been producing many problems arising from rent in large cities due to high prices and the eruption of tourist rentals.

For these reasons and with the aim of lowering the rent, the PSOE wants to amend the LAU (Law of Urban Leases). The main measures are to extend from 3 to 5 years the minimum term of the contracts and raise the tax relief for landlord and tenant.

This proposal was taken to Parliament last March and defended by Beatriz Corredor, secretary of Territorial Planning and Public Housing Policies of the PSOE.

However, in order to be carried out, the Government of Pedro Sánchez must negotiate with all the groups that supported him in the motion of censure. But it also has two major difficulties: lack of political support and budget deficiency.

On the one hand, Unidos Podemos supports returning to the 5-year term for rental contracts, but with a mandatory extension if requested the tenant of another 5 years. However, it discards tax deductions and proposes that the municipalities carry out a regulated control of prices.

On the contrary the PNV did not show its support for the socialist initiative to lower the rent and voted against of the proposal of Unidos Podemos.

As for the budgets, the Government can not apply any deduction at least until 2019. It must remain committed to maintaining those already prepared by the PP during this year.

The initial approach of the PSOE, provided that the municipalities set a procedure to set rental prices by districts. Thus the owners who would like to benefit from up to a 60% reduction in the IRPF of the rent, could not lease above these prices. The reduction would increase by 10% more if energy efficiency improvement works were carried out. And it will reach 100% if the house is also rented to young people between 18 and 30 years with low incomes.