Moraira Information Articles | Spanish Rental Subsidies for Young Persons

Moraira-Info.com - Everything in Moraira!

The Moraira Area Guide (Moraira, Javea, Benissa, Benitachell & Calpe)

 

 

MORAIRA AREA BUSINESS & SERVICE DIRECTORY | MORAIRA AREA INFO | FORUM | ARTICLES
Homepage | Advertise | Contribute

Maps | Cheap Flights

 

HELP US MAKE MORAIRA-INFO BIGGER AND BETTER

Contribute -

Write a single article or
a regular feature!

Contribute to Moraira-Info

Advertise -

Local Internet Advertising
is cheap and effective

Advertise at Moraira-Info

Moraira Forum -

Exchange ideas, get help or advice, have your say!

Moraira Area Forum

Homepage -

Make Moraira-Info your homepage. Free E-mail!

The Moraira Homepage

 

 

 

The Spanish Government have introduced a rental subsidy for young persons!

A Royal Decree provides aid for young tenants, a loan to cover the rental guarantee and the cost of guaranteeing the rental contract.

The scheme will be managed by the Autonomous Communities and paid by the State.

The scheme will apply to both existing rental contracts and young persons who are currently sharing with family or friends.

Full details are provided at the Spanish Ministry of Housing Website -

http://www.mviv.es/en/

Follow the link to "News/Read More" and look for "02/11/07 El Gobierno aprueba la renta de emancipación de 210 euros mensuales"
Reproduction of a hyperlink to this website is not permitted but it is in Spanish anyway.
You can ready the full text by pasting the URL into http://www.google.co.uk/language_tools?hl=en
Translate a web page: (and select "Spanish to English")

A précis of the press release about the rental subsidies follows -

November 2, 2007 - The Spanish Cabinet today approved a  Royal Decree governing a rental subsidy for young persons, between 22 and 30 years, of 210 euros a month for up to 4 years, plus a loan of 600 euros for the guarantee payment and 120 euros to cover the cost of a bank (or other financial institution) guarantee.

The rental subsidy will apply to young persons who meet the following requirements -

Aged between 22 and 30 years.

In possession of a current rental contract for their habitual first residence.
Those who have no actual rental contract are still eligible to apply for the subsidy and they have 3 months in which to actually contract the property.

A regular source of income, either as an employee or self-employed, for at least 6 months.
Alternatively proof of future income for at least six months.
In either case the total income must not exceed 22,000 Euros per year.

Spanish nationality, nationality of any member state of the European Union or the European Economic Area or a permanent Spanish Residence.

In the case where several individuals and/or family groups share a home the subsidy will be proportioned.

In order to operate the scheme the Ministry of Housing (Ministero de Vivienda) will accept applications at its website and at local offices.

Applicants for the rental subsidy must provide -

A Spanish Identity Card or the equivalent Foreigners Identity Card.

A Social Security Number.

Proof of Employment, Education Grant and/or other source of Income.

In the case of an existing rental agreement: the Rental Contract, Address of the Property, the Owners Name Address and DNI and the Catastral Reference.

Rental Deposit Payment and Guarantee -

In addition to the subsidy of 210 Euros for the rent, the Royal Decree provides aid, up to 120 Euros for the payment of the Financial Fee for a guarantee with a private guarantor and an interest-free loan of 600 Euros for the Rental Deposit Payment.
However, both of the above only apply to new rental contracts (not existing ones) and will be paid only once.

Pre-application for the Rental Subsidy -

Applicants may apply for an "in principle" rental subsidy and, after notification of acceptance for the subsidy, have 3 months in which to present details of the property.

Prevention of Fraud -

Various control mechanisms will be established to prevent fraudulent payments, in particular -

Those who have a family relationship, either direct or via marriage, with the owner of the property are prohibited from receiving the rental subsidy.

Beneficiaries are obliged to notify the Administration of any change in their personal circumstances that alter the conditions that gave the right to receive the subsidy.

Overall Plan of Support -

The Youth Rental Subsidy is part of a comprehensive package of measures promoted by the Ministry of Housing, in collaboration with the Ministries of Economy, Finance and Justice.
These measures includes a wide range of initiatives to encourage both supply and the demand for the rental industry.
An important objective in this case is the emancipation and independence of young people as well as to improve the rental market, which currently represents only 11% of the total housing stock.

The majority of young people want independence, which they are denied for economic reasons.
These measures are intended to facilitate access to a first home to young Spaniards who currently are the slowest in European to gain emancipation, with an average age close to 30 years.

 

Spanish Youth Rental Subsidies - Further Details

Another measure to support the rental market is that tenants will now be able to offset the rental against personal income tax in the same way as those who own their own property.

In a blog from Euroresidents.com Subsidies for Renting Accommodation in Spain it was noted that the rental subsidies would cost the Spanish Government 436 million Euros per year and a further 348 million in tax concessions.
Approximately 361,000 young people are expected to benefit from the subsidies in the first year and 700,000 families are expected to be eligible for tax rebates on rentals.

ThinkSpain.com provided a news item Govt. unveils subsidy scheme for young renters that reports that president Zapatero and his new Housing minister, Carme Chacón made a joint presentation at the Moncloa Palace.

 

Spanish Youth Rental Subsidies - Editor Comments

The first thing to remember is that there is a national election next year and the worst kept secret is that the Spanish economy is going into recession.
Sr. Zapatero's PSOE party will need all the support they can get, especially the young people.

My view is that the whole scheme is a risky business that is likely to cost the Spanish Government a great deal of money.
It is a brave effort - can he pull it off? My view is that it will not work, without other manoeuvres, if he is to save the failing economy because the construction and tourism industries employ around 25% of the Spanish workforce.

Even if the expected 361,000 young people become emancipated and participate in the scheme that still leaves around 3,269,000 unoccupied properties.
Something else will have to be done to rescue real estate, construction and tourism - we'll have to wait to see what else is in the "election bag".

Another point to take into consideration that the 210 Euros amounts to a vastly different proportion of the rental across the country.
In Madrid, for example, the average rental is 1,248 euros and this amounts to 16.8% and in Barcelona it is 18.8% of the 1,119 Euros average. In other cities it is the same story: San Sebastián (19.5%), Bilbao (21.3%) and Valencia (21.8%).
In Granada the average is 649 Euros (32%), Soria (49,3%), Teruel (47,8%) and Orense (46,9%) and it is only really inland towns where the offer provides any real incentive.
The Madrileños, most certainly will not get excited about it!

The Autonomous Regions may have very different ideas and perhaps not even the means to carry out the scheme.
There have been many Royal Decrees in the past that either frizzled out, due to lack of interest, or became a complete distortion from the original concept.
Some recent examples are the LRAU and the Foreigners Residence Card fiascos.

 
Links to other articles about Spanish real estate and renting.

1. Spanish Real Estate - A Crash or some Adjustments?

2. Spanish Real Estate - The Future.

3. Spanish Real Estate Survey - The Most Popular Areas could be the Best Investment.

4. UK Tax Amnesty for Owners of Holiday Homes

5. Tourist Rental Income 2007 - What's gone wrong? Overview of the situation.

6. What will happen next? Spanish tourist renting during the next 10 years.

7. How the Spanish authorities could react to the tourism crisis.

8. Making the best of it - advice for Spanish property owners who rent!

9. Property Values and Tourist Rental Income - Written in 2004. A very long article which foresees the present economic depression.

10. Spanish Young Persons Rental Subsidies.