Transformations in Lease Legislation: Perspectives for 2024

Arrendamientos Andorra Psf 1

Extensions and Rent Updates: A New Paradigm

One of the highlights of this proposal is the introduction of a system of extensions and rent updates, aiming to provide a more predictable and secure framework for regular and permanent lease agreements.

This system, which will be in effect from January 1, 2024, establishes extension periods and rent increases based on the date of contract formalization.

While maintaining the principle of freedom in rent negotiation between landlord and tenant, the goal is to limit excessive increases and create more equitable conditions in the market.

The proposal includes, for example, the possibility of extensions for up to 4 years with a maximum increase of 5% plus the Consumer Price Index (CPI) for contracts formalized before 2015, and similar scales for contracts in subsequent years.

Exceptions and Limitations: A Balanced Approach

The bill also establishes clear exceptions in which the tenant cannot avail themselves of the extension system.

Among these exceptions are situations such as the landlord's recovery of the property for personal use or for use by relatives up to the second degree, the assignment of the property to the government for social purposes, monthly rents exceeding €2,000, or the need to carry out renovations preventing occupancy.

These restrictions aim to balance the rights and responsibilities of both landlords and tenants, ensuring a legal framework that promotes stability and legal security.

Boosting Taxation on Vacant Properties

Another significant aspect of the project is the increase in the tax rate on vacant properties.

This increase, from €10.00 to €20.00 per square meter based on the taxation base, aims to encourage the effective use of properties and discourage unjustified retention of empty dwellings.

Temporary Suspension of Authorizations for Tourist Use Properties

The legislative proposal also addresses the regulation of tourist use properties (HUT), proposing an extension of the suspension of new authorizations for an additional year.

Furthermore, exceptions previously applied to higher-category HUTs are removed, intending to regulate this sector more consistently and prevent the uncontrolled proliferation of such accommodations.

Conclusions and Future Perspectives

The Bill on incentive and stability measures for the lease market establishes a series of changes that seek to balance the relationships between landlords and tenants, promoting stability and transparency in the housing lease market.

As this proposal progresses in its legislative process, it is expected to have a significant impact on the dynamics of the real estate market, promoting fairer and more sustainable practices. Stakeholders in the sector will need to pay attention to these transformations and adapt to the new regulations that will come into effect next year.