The Constitutional Court Rejects part of the new Government’s Rental Act

28 January 2020 – El Economista

The Constitutional Court (CC) has rejected part of the Government’s Rental Act. Specifically, the CC is forcing the Government to review the first additional provision, which establishes the mobilisation of public land for the development of social rental housing. The CC deems the provision to be unconstitutional and void, whereby forcing the new PSOE-Podemos coalition Government back to the drawing board on one of its key initiatives.

The idea, proposed by the Ministry of Development, was to grant public land to private companies for the construction and operation of around 20,000 rental homes over 50 years at affordable prices. However, an appeal filed by the PP, questioning the “extraordinary and urgent need” of the proposed measures has been partially upheld by the CC.

In April 2019, the previous Government approved the Housing Act, which does not include any measures to fix rental prices but instead states that rental prices should increase in line with CPI. It also establishes a series of tax measures to incentivise the supply of affordable rental homes, such as discounts of up to 95% on the annual Property Tax (IBI) of protected rental homes whose rent is limited.

Original Story: El Economista

Translation/Summary: Carmel Drake