New Spanish Government Proposal for House Renting

Presidential elections have just taken place in Spain. Following the experts, the results have been positive for investors. No matter the political ideas our readers may have, the renewal of a government usually brings peace of mind for investors because it does not anticipate big changes.

One of the common ways in which housing owners get income from their properties in Spain is renting. Thus, we think the renting regulations are very relevant to our readers. Nowadays, we cannot say if the new government is going to be positive for investors, but we can take a look to what the parties have said about house renting matters before the elections.

What Can We Expect?

Since the PSOE have won the elections, the most likely outcome is a government with them and the support of Unidas Podemos, or much less likely, Ciudadanos. We cannot predict a coalition between PSOE and PP in Spain, and there is nothing that indicates that they will not be able to form a government with a coalition, or at least the support of other party.

The PSOE was the party already in the government when the last house renting regulation (Real Decreto-ley 7/2019, de 1 de marzo, de medidas urgentes en materia de vivienda y alquiler) was approved, so we do not expect big changes. However, this regulation came in the form of decree law. Decree laws are a tool to regulate in urgency and special occasions, without the need of the Parliament’s approval, but a healthy democracy requires that the Parliament passes the law. Thus, if the new government has the power to approve a new law through the parliament, they may try to do it.

Most Likely Option: PSOE Governs with Unidas Podemos Support

The Unidas Podemos leader insisted throughout the political campaign that the government should promote a fairer rental market. This party have interventionists ideas and has claimed things like the possibility of forcing owners with more than 10 properties to put them for renting by a social price.

It seems very difficult that the PSOE accepts such a claim because it may have a big electoral cost among the more centrist PSEO voters. However, it is possible that the PSOE will accept some weaker measures that protect tenants’ rights.

Less Likely Option: PSOE Governs with Ciudadanos

The Ciudadanos leader assured consistently that, if he had the chance, they would not support Pedro Sánchez. As a result, now it seems very unlikely that they would accept any collaboration with the government – at least during the first months. In the same way, after winning the elections, PSOE voters were shouting “Con Rivera no” – no with Rivera – rejecting the possibility of offering Ciudadanos an agreement.

In any case, politics can change a lot in short period of times, so let’s consider this option.

Ciudadanos has a liberal approach, and though they say they have the same goals as Unidas Podemos – a cheaper renting market that allows people to get a place to live – they propose just the opposite to the left-wing party. If Ciudadanos have the chance to push the PSOE to change anything, they will try to reduce regulations.

Conclusion

Spain is famous because of its drastic changes in many regulations when the party in power changes; not only in economic aspects, but also in education and even the approach to international relationships.

As a result, elections are always surrounded by uncertainty. However, once the result seems solid enough to think Spain will have a government without repeating the voting as it happened the previous time, when it comes to rental regulations, we expect a continuation and not many changes for the coming future.

*Please, keep in mind we are not offering investment advice here. We do not support any particular Spanish party and we do not have any relationship with them.