Spanish Rent Subsidy

[command]

The Spanish Budget has just been announced and it would appear that like us they have an issue with young people not being able to afford to get on the property ladder.

Also like us they have a tradition of home ownership rather than renting.

What they are proposing is that any young Spanish person between 22 and 30 years old earning less than €22,000 will receive €210 toward their rent and a loan of €600 towards a deposit.

I now some people will say that this is just putting money in the pockets of landlords but is there merit in it. Discouraging young people from overstretching themselves with too large a mortgage until they can afford it must be a good thing?

 

[room305]

What they are proposing is that any young Spanish person between 22 and 30 years old earning less than €22,000 will receive €210 toward their rent and a loan of €600 towards a deposit.

What's stated intention of the proposal? Presumably the rent the landlord demands will simply move to reflect the subsidy available to the buyer. Or at the very least it's hard to understand why this wouldn't happen.

However, perhaps this is the actual intention of the proposal and as such it can be viewed as a move by the Spanish government to encourage more investors into the market in an effort to shore up falling property prices and construction job losses.

 

[Markjbloggs]

Like most legislation designed to do good in Ireland, it would only end up benefitting the stroker, in this case the Landlord.

 

[Afuera]

I now some people will say that this is just putting money in the pockets of landlords but is there merit in it. Discouraging young people from overstretching themselves with too large a mortgage until they can afford it must be a good thing?

On the face of it, I think that encouraging young people to rent in Spain is a good idea. As it stands, the average age that people move out from the family home there is around 32, as it is only at this point that they can afford to buy. Since rental increases are controlled by the government, I don't think you can say definatively that these proposed measures are the same as putting it in the pockets of landlords. Unlike in Ireland the landlord can't just up the rent by 210 EUR.

 

[Afuera]

Like most legislation designed to do good in Ireland, it would only end up benefitting the stroker, in this case the Landlord.

As I just mentioned Spanish rent control should have a dampening effect on the amount it will benefit the landlord. Also, if I remember correctly this proposal was going to be given in the form of a tax relief. To receive it you have to make a tax declaration called Renta which would be reimbursed to you at the end of the year. It will not be the same as if young people were automatically given a larger amount of disposable income, which the landlord could try and milk when negotiating a lease with new tenants.

 

[Markjbloggs]

Doesn't matter - the Irish cute hoor will always find a way to turn this around to his own benefit.

As I just mentioned Spanish rent control should have a dampening effect on the amount it will benefit the landlord. Also, if I remember correctly this proposal was going to be given in the form of a tax relief. To receive it you have to make a tax declaration called Renta which would be reimbursed to you at the end of the year. It will not be the same as if young people were automatically given a larger amount of disposable income, which the landlord could try and milk when negotiating a lease with new tenants.