It is the update of the protection shield against the impact of the war in Ukraine on the Spanish economy. The seventh package of measures approved yesterday by the Council of Ministers extends the reduction in VAT on basic foods, the reduction of public transport passes, gives tax incentives for the purchase of electric vehicles, and in the area of ??housing ‘on the one hand it maintains the suspension of evictions of vulnerable families, but on the other it eliminates the possibility of an automatic extension of rental contracts under the same terms and conditions as established by the contract in force.
A set of decisions that largely extend measures already in force that expired this week, gradually eliminate others and establish some new ones. In total, this package of measures mobilizes an additional €3.8 billion, although the overall impact, i.e. taking into account total aid, tax cuts and bonuses, is €8.9 billion during the second part of this year.
One of the controversial aspects has been to eliminate the automatic six-month extension of rental contracts without there being a modification of the conditions. It allowed the tenant to renew his contract without suffering increases in the rent price. This is changing, and from July 1 landlords will be able to change the conditions. A measure criticized by Sumar, with its spokeswoman Alejandra Jacinto writing on Twitter that “the socialist part of the Government has just overturned the measure that allowed rental contracts to be extended for six months that prevented abusive price increases and evictions”. The Central Government’s argument is that the Housing Act has already entered into force, which establishes protection mechanisms for vulnerable tenants, who can request extensions of the contract price for up to one year. In addition, they add that the extension was an extraordinary measure that made sense at times when inflation was at its peak, and that is no longer the case.
On the other hand, the rise in food prices has forced the Government to extend the reduction in VAT on basic foods such as bread, milk, cheese, eggs, fruit and vegetables, among others . These reductions will be maintained until the end of the year except in the event that underlying inflation falls to 5.5% (in May it was 6.1%). A reduction that entails a cost of 661 million during the second semester.
On the other hand, the discount on public transport will also continue, with funding of 30% of passes and multi-trip tickets, and the petrol and diesel subsidy for transporters and farmers will remain at ten cents per liter for the next three months, and will be lowered from October and until the end of the year to five cents.
One of the new measures is the reduction of 15% in personal income tax for the purchase of electric vehicles or the installation of charging points for these vehicles. A relief that will be in force until the end of 2025. The deductible limit is 20,000 euros. In the case of the purchase of vehicles, not only the full payment is accepted, but also the payment to the seller of a minimum of 25% on account to access the relief. For charging points, the installation must be carried out before the end of 2024.
The approved omnibus decree-law also extends by six months the deadline for obtaining the authorization to start the construction of new renewables, which becomes a respite for hundreds of projects at risk of expiring, and having to start the procedures again from scratch Another decision was to delay until January the grantees’ right to contribute, as requested by the university presidents, but which has caused the anger of the unions, who consider it an “inexplicable concession” to the pressures of the academic and educational authorities .
