The entry into force of the housing price index will force large owners to reduce by 20% the rent they charge for the homes they rent out, according to a study carried out by the college and the Association of Real Estate Agents ( API) of Catalonia.
Carles Sala, spokesperson for the group, points out, however, that there is great variability, with decreases in income ranging between 4 and 42%. These discounts must also be applied by individuals who put an apartment on the rental market for the first time.
Sala highlights that the decrease would be even greater if the average reference index of Catalonia was applied (the one that required the use of the November 2020 law until it was invalidated by the Constitutional Court), since in that case the decrease in income would reach 25%. This index only took into account the surface area and location of the home, not its characteristics or its condition. Taking into account these factors, which were reflected in the upper range of the Catalan benchmark index, the state index is between 10% and 15% below those values.
In Sala’s opinion, this 20% reduction in rents could lead many large owners to take their homes out of the traditional rental market, an activity that will become “unprofitable” for them. The situation is different for large holders who are an individual and those who are a legal entity, he adds, since individuals, although they must lower their income, will have the right to benefit from reductions in the positive net income of rentals in personal income tax. . “If they are companies, on the other hand, they do not have tax benefits and, therefore, they are the main candidates for not maintaining their homes in the residential rental market for families,” highlighted the spokesperson for the APIs of Catalonia.
Sala believes that the incentive to abandon the rental market is not so great for small private owners. For them there will only be containment of increases, since they will be able to put the rent of the previous contract increased with the update clause, so “it should not be the cause of the homes leaving the rental market.”
In the opinion of the APIs, to make it easier for these homes to continue to be rented, new tax credits for homes located in areas declared tense should be analyzed, and rent increases should be allowed for homes with new accessibility measures or with long-term contracts.
