The president of the Community, Isabel Díaz Ayuso, has announced a shock plan with ten new measures to boost housing in 2024/25, which includes new tax incentives, such as a new deduction in personal income tax of 25% for those mortgaged to those whose mortgage interest has increased compared to December 2022.
Likewise, the plan includes the temporary change of use of office land, free non-payment insurance for more years and more supply in the small municipalities of the region.
“Madrid has consolidated itself in recent years as the capital and as the region with the greatest expectations for growth and development in Europe. To address these changes and everything that is to come, it is essential that housing is an ally,” Ayuso stressed. .
The president has called the meeting of the Regional Pact for Housing, which was held at the headquarters of the Ministry, in the renovated Antonio Palacios Pavilion. In front of the 30 entities that have participated in this event, the regional leader has highlighted the creation of a ‘plus version’ of both the Rent Plan and My First Home.
In the first case, new incentives are proposed, such as extending the free non-payment insurance to three years, which was two for those under 35 and one for the rest. Likewise, to mobilize outdated apartments, the Community will put future tenants in contact with accredited rehabilitation companies. To this we must add the Alquila Comparte Plan, to offer legal security to those owners who want to rent apartments by rooms.
The ‘My First Home’ program is also improved, which facilitates access to a mortgage for Madrid residents who are not over 35 years old, expanding financing from 95 to 100% and increasing the age limit to 40, in addition to extending the benefit to large or single-parent families.
Likewise, among the legislative actions, the temporary possibility of change of use for two years of buildings or plots intended for offices that become homes stands out. This transformation would be by license without the need for planning. Likewise, the promotion of affordable rental housing will be further explored, facilitating cooperatives’ access to loans with public protection, with the endorsement of the Community.
On the other hand, a package of tax reductions for the purchase and rental of housing has been advanced with savings of almost 100 million. The measures include a new deduction in personal income tax to counteract the rise in interest rates on mortgage loans for habitual residence.
To do this, a 25% bonus will be created on the difference between the interest paid and those that would have been paid taking the Euribor of December 2022 as a reference, with a limit of 300 euros per year and with the condition that the interest rate of the mortgage is variable. It is estimated that this action will benefit nearly 450,000 taxpayers, with a tax saving of 90 million.
In addition, another deduction of 1,000 euros in personal income tax will be allocated to owners who formalize new lease contracts for properties that have been unused for at least one year, provided that they join the rental market with contracts with an effective duration of more than three years. .
Tax incentives have also been designed for young people under 35 years of age to establish their habitual residence in one of the 73 towns in the region with less than 2,500 inhabitants, whether through purchase, renovation or rental. In addition, they can be accumulated and will generate savings close to 9 million.
On the one hand, there will be a deduction of 1,000 euros for moving to those locations in the tax period in which it occurs, as long as the habitual residence is maintained there throughout that year and three following years.
In addition, a reduction is included for these taxpayers in personal income tax for the acquisition or rehabilitation of their habitual residence, which will be 10% of the acquisition or renovation price, with an annual limit of 1,500 euros. Along with this, another 100% bonus on Property Transfer taxes in the case of the acquisition of a second-hand property, as well as Documented Legal Acts, in case it is new.
Another of the advanced actions is the creation of a line of aid, charged to the PIR, to promote the municipal obtaining of land so that new construction properties or those intended for renovation can be built in towns with less than 20,000 inhabitants.
The approval of a new Housing Regulation with Public Protection is also planned, which will result in a greater volume of activity and allow the recovery of the lease with option to purchase.
Likewise, the autonomous Administration will continue to promote “a stable and transparent regulatory framework.” At this point, he recalled the work carried out by the Arbitration Council, “a cutting-edge and reference instrument in conflict resolution that avoids going to court.”
The head of the Madrid Executive has recalled her commitment to create in the autonomy the largest industrialization hub at the national level, to continue advancing in a building method that provides “significant progress with respect to the traditional one, reducing economic and environmental costs, improving times and reducing occupational risks”.
The regional Government has emphasized that the Madrid-based Administration is currently the Administration that builds the most publicly owned houses and for a smaller amount in Spain. The Vive Plan for affordable rentals adds 6,500 homes already awarded in 12 municipalities and another 1,912 in tender in 10 locations. This leaves a balance of almost 8,500 homes to which the 1,200 from the Young Solution Plan will also be added.
Another initiative is the update of the maximum sales and rental prices for housing with public protection. The Executive has indicated that this is “a necessary measure since they have been frozen for so long that, if not adapted, it could stop the construction of 30,000 privately promoted affordable homes in the next four years.”
“All these initiatives are aimed at building more and better housing in the Community of Madrid. Our intention is to launch them in the next 24 months simultaneously with the housing programs that are already in force,” he stressed.
Finally, he stressed that “the General Administration of the State must also contribute to the extent” to which they do so from the Community to “create a state tax shield for housing, to be truly competitive.” In this sense, he has pointed out that it is the Government’s responsibility to “seriously address the problem of illegal occupation.”
“In addition, it is more than proven that interventionism is a scourge for the economy, employment, development and investment. It is essential that owners and investors have maximum guarantees of legal security,” he indicated.
Ayuso has emphasized that “the housing law is disastrous and is causing, among many other damages, a reduction in supply and an increase in prices.” “The objective of this plan is to go in the opposite direction, is that the Community of Madrid can increase this housing supply, continue consolidating ourselves as the most attractive region for investment and continue transforming our urban areas, making them more habitable, more comfortable and more accessible for all economies,” he concluded.
