Real Estate Investment in Spain: The Market After COVID-19 and New Government Regulations

Although prices for urban real estate have risen despite the corona pandemic, rental prices are falling in major Spanish cities. The Spanish Government is preparing a new law for urban housing that includes some price control measures.

The rental prices are falling in the big city markets such as Madrid and Barcelona. This is due to a variety of factors including the economic crisis, tourist apartments returning to the market as a result of less travel after the pandemic, or the pressure of recent new regulations. The Spanish Government is preparing a new law for urban dwellings which will introduce some price control measures in areas where prices have been going up in recent years.

We can advise you if you want to buy or sell real estate in Spain, as well as on international investments.

Christian Koch, Partner, Lawyer, ECOVIS Legal Spain v. Carstenn-Lichterfelde Abogados, Madrid, Spain

What the Spanish Government is Planning for Real Estate Investment in Spain

The measures will include a mandatory reduction in rents for large-scale property owners and prevent all other owners from increasing rents, with tax-benefits for those owners who decrease the rent they charge for their residences.

There are also some modifications to tax-legislation which will affect investments in the real estate market. These include increases in municipal taxes for residences that remain empty for some time, a new sales tax for residences in urban areas to replace prior legislation that was declared unconstitutional, and some government assistance for repair works that increase the energy efficiency of the buildings, explain the Ecovis advisers.

However, in the short term at least, the decreased rents and increased regulation of the sector will have a negative effect on the return on investment.

For further information please contact:

Christian Koch, Partner, Lawyer, ECOVIS Legal Spain v. Carstenn-Lichterfelde Abogados, Madrid, Spain
Email: christian.koch@ecovis.es