The Mayor of Barcelona, Jaume Collboni, has signed a decree declaring Barcelona a rent pressure zone, in line with the new state law on housing. The move gives legal strength to the process initiated by the Government of Catalonia, as the administration with powers in this sphere, to define pressure areas, apply the law and protect local residents by regulating the prices of rents.
The new Housing Act sets out four requisites for declaring a rent pressure zone. The law can be applied if an area meets one of these criteria. In Barcelona’s case, the city meets three: the percentage of income that households use to pay their rent or mortgage and utility bills exceeds 30% in both cases, and the price of their rent in the last five years is more than 3% higher than the evolution of inflation.
Regulation and tax breaks
The new law also sets out differences in establishing the price of a rent if the owner has multiple properties (owns more than ten homes). In the case of owners of multiple homes, rental prices are limited to the price reference index from the Government of Catalonia. For owners of fewer homes, the rental price for new contracts will be determined by the previous contract.
Tax breaks are also available for owners who rent out homes. For new contracts there’s a 50% reduction in income tax, rising to 90% where the price of the rent is 5% lower than the previous contract. If the flat is rented out to tenants under the age of 35, the discount will be 70%.
Between 36% and 43% of income is used to pay for housing
According to data published by the National Statistics Institute for 2020, local people in Barcelona spend 36% of their income to pay for their rent. For mortgages, the percentage of income used is 43%.
Rents have increased by 21.1% in the last five years, rising from an average of 889.6 euros a month in the fourth quarter of 2017 to 1,077.5 euros in the last quarter of 2022. In contrast, inflation for the same period was 14.6%, a difference of 6.5%, more than double the figure set out by the Housing Act for declaring an area as a rent pressure zone.