Proposed Law on Sustainable Growth and the Right to Housing
Last April, the Government announced a set of proposals aimed at ensuring sustainable growth and addressing the issue of access to rental housing. These actions are to be included in the upcoming Bill on sustainable growth and the right to housing, which will focus on several key areas. These include the temporary obligatory transfer of vacant apartments to the Government if the owners do not rent them out after notification; the prohibition of new licences for Private Tourist Accommodations (HUT – Habitatges d’Ús Turístic) and the limitation on the purchase of properties by non-residents.
The Head of Government, Xavier Espot, explained that this package of measures aims to recover about 1,500 housing units for the rental market over the next three years. He detailed that the bill will include the mandatory incorporation of unoccupied apartments into the purchase or rental market. Efforts will be made to complete the census of vacant housing, and owners of unoccupied properties will be notified, offering them the option to put the property on the market within three months or voluntarily transfer it to the Government in exchange for financial compensation. If they do not accept these options, an obligatory, temporary transfer of the use of the vacant property to the Government could be activated. This measure could add about 800 apartments to the market.
Additionally, the property acquisition tax (ITP) will be waived for residents of more than five years who purchase their first home, as long as the value does not exceed 500,000€ The tax on capital gains from real estate transactions will also be increased to discourage speculation.
Regarding the tourism sector, the new bill will prohibit the granting of new licences for HUTs and tourist apartments indefinitely, confirming the current temporary expiry system for existing permits. If an HUT does not register any occupancy in one year, its licence will be indefinitely suspended. Moreover, it is planned to increase the tourist tax to fund the training of tourism professionals and improve controls to ensure effective payment of the tax.
The overall goal is to achieve a balance between foreign real estate investment and access to housing by limiting the purchase of properties by non-residents to only two properties. Foreign-owned real estate developments will be prohibited unless they are intended for the rental market.
In the field of immigration, it was announced that the quota system will be reinstated to reduce demographic pressure and its impact on affordable rental housing. Thus, a minimum work experience, in the employment sector applied for, will be required to access the general quota, and the use of seasonal work permits will be limited. Efforts will also be made to eliminate permits for displaced non-EU workers and to prohibit self-employment during the first year of residence to prevent the evasion of the 50,000€ deposit payment.
These inter-related measures aim to ensure sustainable growth, facilitate access to rental housing, and balance the country's tourism and demographic needs, whilst always respecting the environment and natural resources.
