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As we predicted in our previous article (Spanish Government introduces inflation control in long term rentals – 1st April 2022), because of Spain’s high inflation, the government would continue to ‘chain’ (by this we mean renew every 3 months) the 2% inflation cap on long term rentals.
Spain’s National Bureau of Statistics (INE) reported inflation hit 8.7% Year-Over-Year during May 2022.
In view of this spike in inflation, the Spanish Government took swift action and approved a slew of measures to fight it. Amongst them, was a law to enforce inflation control in all long-term rentals.
Continuing the previous 3-month cap, it will be extended starting on Friday 1st of July and end on the 30th of September 2022. All contracts signed during this period need to abide by it.
For professional landlords, rental updates are capped at 2%. For laymen, there is freedom to negotiate. However, if no agreement is reached, a 2% limit also applies. In practice, this translates into a 2% limit for everyone.
Again, I stress it is highly likely our government will continue to renew the 3-month rental cap until Spain’s high inflation is brought to heel, which realistically could take several years, if we are to go by historic records. So, far from ‘temporary’ inflation as we advised last year (Tax breaks on buying property in Andalusia extended indefinitely! – 8th December 2021).
At Larrain Nesbitt Abogados we have over 19 years’ experience buying, selling, and renting properties. We are also specialized in immigration & residency visas. You can contact us by e-mail at firstname.lastname@example.org, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.
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