An Encouraging Step Forward for Property Owner..

Property:Real-Estate

Although there is no dearth of housing for immigrants in Spain, a new legislation is under way that would force property owners who prefer to keep their homes stand empty, to release them for affordable renting. In general, the Spanish Government has always followed a policy of integration by not establishing special housing for different sections of the society. Moreover, the government is encouraging young people to consider renting a property as being more economical than buying the same.

State Renting Company

The government is also encouraging property owners to rent out empty flats by setting up a renting agency, which will be called the State Renting Company (La Sociedad Publica de Alquiler). This agency will act on behalf of the property owners and will rent out their privately owned property. The property owners will hand over the right to rent the property to the renting agency and will receive a monthly rent from the agency for a fixed period, say five years.

The property owners would definitely find this scheme to be very convenient and attractive, as they would be spared the trouble of looking for and interviewing tenants and then chasing them for the unpaid rent. They could even claim the five years rent in advance from the agency thus making it a very attractive proposition.

Relevant Applicable Taxes

If you do not reside in Spain and if you own property which you do not rent out and is exclusively for personal use and if you have no other taxable income in Spain, this version of Income tax will be applicable to you. Even if you do not earn anything from the property, you would be deemed to be deriving benefit from owning the property and as such you would be liable for the imputed income tax.

Regional governments collect annual wealth tax from all who own property in Spain (residents and non-residents) based on the net value of their assets in Spain after permitted deductions, such as mortgages.

Government’s Housing Policy

In order to defray the cost of providing low-cost housing for rental and purchase, the government has set forth a foreigner housing policy so that low-income group foreigners or visitors could get cheaper housing. With this policy, more and more property owners are willing to give their house on rent. The housing policy encourages home ownership by granting income tax relief on the purchase of a main residence, without any means test, by helping the least well-off households to buy homes through the housing plans, with the application of a reduced value added tax (VAT) rate on residential construction and with no taxation on the imputed rents of owner-occupiers of the property.

Home seekers in Spain are now increasingly using the home share programs by seeking a home with homeowners who have an available room. In return, they either pay rent or exchange non-personal services such as shopping, cooking, gardening or housekeeping in keeping with the principles of ‘mutual help’ and ‘solidarity between generations’. Home-owners in Spain are now being increasingly being encouraged to rent out their empty property by the government.

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