# Spain New rules prevent eviction of tenants during corona virus crisis



## mouloudb13 (Nov 9, 2013)

Hi, I have just heard of new measures introduced by the spanish government just now to protect tenants during the corona virus crisis whereby landlords cannot evict tenants until 6 months after the end of the current crisis.
What are the implications of these new rules for expat landlords in Spain? Will the tenants obtain help from the government to pay their rent whilst they are not working due to corona virus shutdown? Is there any protection for landlords from tenants who might exploit the situation to avoid paying rent knowing that nobody can evict them? Any advice for landlords who are renting their properties in Spain in case tenants stop paying rent? 
I will appreciate your advice. 
Kind regards


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## davexf (Jan 26, 2009)

If I am a small landlord, is my rent at risk? 

No. The Government has launched the line of credit with the Official Credit Institute (ICO) to make sure that the tenants can pay the rent, so the small landlord will receive their income. This financing will have no commissions or interests, making it accessible to any tenant with financial problems due to this crisis.


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## mouloudb13 (Nov 9, 2013)

Devexf
THANK you for your reply and clarifications. 
Now that the government is offering help to tenants to pay rent if they can't because of shutdown, what happens if tenants stop paying rent knowing that the new rules prevent landlords from evicting tenants? Are there any solutions left for small landlords of a tenant decides to exploit the new rules that prevent eviction to stay without paying rent? Any advice?
Kind regards


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## davexf (Jan 26, 2009)

Hola 

The new measures approved by the Government will be open to tenants who have become unemployed, who have suffered a Temporary Employment Regulation File (ERTE) or in the case of the self-employed, who have significantly reduced their turnover, as a consequence of the paralysis of the economy due to the state of alarm. 

What if we don't reach an agreement between the landlord and the tenant? 

If no agreement is reached, the tenant can access the financing program to request a loan from the state-backed banks through the Official Credit Institute (ICO), which won’t have any cost to the applicant. It can be requested for an amount of up to six month’s rent and can be returned in a maximum of ten years.

What if the years go by and I can't repay the credit? 

The credits may be repaid within a period of six years, extendable to ten if necessary. But, in the event that the situation of vulnerability lengthens, the Executive may approve direct aid for victims of gender violence, homeless people and others who are especially vulnerable. 

It is an aid of up to 600 euros per month, which can be raised in certain cases to 900 euros (the limit is 100% of the fee), for the payment of the rent and another 200 euros for supply costs to take care of the debt if the tenant has not economically recovered. 

Hope that answers your questions 

Davexf


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## mouloudb13 (Nov 9, 2013)

Absolutely! Thank you so much for all this important information!
Kind regards


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## kaipa (Aug 3, 2013)

Looks like autonomo and landlords are going to be last in line.


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## fortrose52 (Nov 29, 2018)

Yes. If you have bought a house to rent out as an investment, you are on the same footing as 10s of thousands of self-employed and small, medium and large businesses who have already gone bust. These measures are to prevent homelessness and not really to give security advantage to landlords as that would be puting them above all those other people who have lost out.


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## kaipa (Aug 3, 2013)

Basically some people are going to have to pay for this huge public bailout. This time it will be the haves. Government have learned from 2008 that bailing out the banks and punishing the people was not popular or fair so this time will be different


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## mrypg9 (Apr 26, 2008)

It's amusing how the 'free' market looks to the state when the going gets tough. Renting property like any investment involves risk. I was a landlord in the UK and Canada. That's one reason why I'm a renter in Spain. If a landlord loses rental income the asset, the property, is still there. The tenant may lose a home.If you've leveraged yourself to be able to buy that asset, again, tough.

In the last two financial crises, 2008 and the Eurozone debacle of 2012, feckless borrowers both public and private were bailed out by the taxpayers, the ordinary working people. Many people lost their jobs and homes while bankers and others in the financial sector kept their inflated 'compensation' and bonuses.

Investing in any asset involves risk. A lot of ordinary people will suffer from this crisis. No prizes for guessing who won't.


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## mrypg9 (Apr 26, 2008)

kaipa said:


> Basically some people are going to have to pay for this huge public bailout. This time it will be the haves. Government have learned from 2008 that bailing out the banks and punishing the people was not popular or fair so this time will be different


We hope. I wonder how this will be brought about. Taxes on unearned income? Closing of tax loopholes? Salary /income caps? Death duties/inheritance tax?

Borrowing, yes, but pushing debt further down the line and many countries will be obliged to raise yields on their sovereign bonds.
Printing money? A form of internal devaluation that punishes small savers.

So there's never been a better time to squeeze the rich until the pips squeak, as Denis Healey once memorably claimed he intended to do - but never did.


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## Tigerlillie (Apr 7, 2015)

In France we have what's called 'La trêve hivernale' which runs from 00.01h November 1st until midnight March 31st and nobody can be evicted or have their utilities cut off, this has now been extended for 2 months until midnight May 31st.

Does a system such as this exist in Spain?


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## kaipa (Aug 3, 2013)

Governments will simply need to increase tax levels on everyone especially the wealthier earners. Tax bands matching Scandanavian countries would be a start. Surprisingly small levels but applied across all sectors will go a long way. It is clear that many aspects of socialism are going to have to be applied. Look at banks already showing fear of public anger are announcing no bonus payments etc. Those businesses and individuals that have stuck to hard capitalist reactions toward the virus are quickly recalibrating their PR. Sports Direct, Britannia Hotels desperately trying to fall in step with public mood. Basically the state will need to borrow and invest to stimulate the economy. The lesson learned in 2008 was that trying to not to spend , and the accompanying cuts in public spending didnt work.


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## kaipa (Aug 3, 2013)

Tigerlillie said:


> In France we have what's called 'La trêve hivernale' which runs from 00.01h November 1st until midnight March 31st and nobody can be evicted or have their utilities cut off, this has now been extended for 2 months until midnight May 31st.
> 
> Does a system such as this exist in Spain?


Yes it does. No evictions no sacking and 6 months interest free loans.


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## davexf (Jan 26, 2009)

kaipa said:


> Looks like autonomo and landlords are going to be last in line.


Hola 

The Ministry for Ecological Transition from now on will allow the social bonus to people who meet certain thresholds of low family income and who prove to be affected by employment regulation records motivated by the state of alarm, as well as the self-employed. The threshold is applied when activity has ceased or their turnover has been reduced by 75% compared to the average of the previous period. 

Self-employed may suspend the payment of electricity.

The Government has approved measures so that the self-employed and SMEs affected by the stoppage of activity can reduce part of their fixed costs, especially those linked to essential supplies. Self-employed and small businesses may suspend payment of their electricity and natural gas bills, or supplies of butane or propane, and pay them pro rata for six months after the end of the state of alarm.

Similarly, self-employed and SMEs will also be able to benefit from a flexible contracting of electricity and gas, and may temporarily modify or suspend their contracts without penalty, including the possibility of reducing the power and contracted amount. Once the state of alarm is over, they are once again allowed a new modification without cost or penalty to adjust to normal activity.

Davexf


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## mrypg9 (Apr 26, 2008)

kaipa said:


> Governments will simply need to increase tax levels on everyone especially the wealthier earners. Tax bands matching Scandanavian countries would be a start. Surprisingly small levels but applied across all sectors will go a long way. It is clear that many aspects of socialism are going to have to be applied. Look at banks already showing fear of public anger are announcing no bonus payments etc. Those businesses and individuals that have stuck to hard capitalist reactions toward the virus are quickly recalibrating their PR. Sports Direct, Britannia Hotels desperately trying to fall in step with public mood. Basically the state will need to borrow and invest to stimulate the economy. The lesson learned in 2008 was that trying to not to spend , and the accompanying cuts in public spending didnt work.


Tax increases shouldn't be levied on everyone. Low earners spend more in proportion to income and spending is ne way of getting the economy going. Then there's the issue of what constitutes 'wealthier earners'. A low income in London is a high income in Barnsley. 

I shouldn't put too much faith in the willingness of big corporations to suddenly become kinder and gentler after all this has died down and we're back to a kind of normal. PR is PR . Banks and financial institutions will still pay huge salaries and bonuses. No lessons were learned after 2008. No real regulation has been put in place. Finance is still beyond the control of governments. CDS ,MBS and other fancy derivatives are still being sold.....

When states borrow they obviously have to pay back, amounts depending on the yields of the bonds they sell or other ways they raise loans from central banks or money markets. Of course there will be a need for increased borrowing, there always is. But there are vast sources of unearned wealth,, taxes on which if levied
at a higher rate would not only bring in revenue but demonstrate fairness and solidarity. Plugging loopholes and employing more qualified tax inspectors to chase up the £billions of uncollected tax due might help.

I think the whole UK tax system is unfair, not really progressive and needs a thorough overhaul. But raising taxes on the comparatively low paid would be counter productive.

As for that other tool, interest rates....well, how low can you get..


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## NickZ (Jun 26, 2009)

Be careful what you wish for. If landlords can't make any money they won't rent out. If you look at Italy you'll see large number of properties kept empty. It's less hassle for landlords then trying to deal with renters. One of the reasons so many properties have been converted to short term AirBnB type rentals is because of the problems with long term rentals.

On the companies increasing the taxes will just mean more of them moving to tax havens like Ireland and the Netherlands.


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## kaipa (Aug 3, 2013)

Higher levels of taxation across the whole spectrum are inevitable. Everyone will be expected to contribute more this time. That way no single group will receive preferential treatment. Already we have people going on about it will affect their pensions, their properties, their investments
We are all in it together so we should all just accept that our individual wealth will take a kicking and give thanks that is all it will be


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## kaipa (Aug 3, 2013)

NickZ said:


> Be careful what you wish for. If landlords can't make any money they won't rent out. If you look at Italy you'll see large number of properties kept empty. It's less hassle for landlords then trying to deal with renters. One of the reasons so many properties have been converted to short term AirBnB type rentals is because of the problems with long term rentals.



Empty properties will be either subject to higher tax or requisitioned. I am afraid the idea of property as a investment and income source has had its day. Look at Spain 65,000 workers in the construction industry are now unemployed. Spain has a huge amount of empty housing stock. Do you really think a nearly bankrupt economy are going to prop up this sector? How many Brits come on this forum with plans to buy an apartment in Spain that they intend to be paid for by rentals? Should these people be first in line for help? It might appear a tough world now but it has always been like this for many people it's just you dont really care as long as you are doing okay


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## Isobella (Oct 16, 2014)

NickZ said:


> Be careful what you wish for. If landlords can't make any money they won't rent out. If you look at Italy you'll see large number of properties kept empty. It's less hassle for landlords then trying to deal with renters. One of the reasons so many properties have been converted to short term AirBnB type rentals is because of the problems with long term rentals.
> 
> On the companies increasing the taxes will just mean more of them moving to tax havens like Ireland and the Netherlands.


Which is what happened when Gordon Brown increased the upper rate in UK...end result less revenue came in. Perhaps Governments are just going to have to juggle the budgets and allocate more to social spending. 

My Brother and I inherited some properties, a few of them in the North are contracted out to local authorities. Difference is they guarantee the rent if the tenant doesn't pay. Usually happens as I think they are problem families. a small apartment block we have runs great but we have had to do an eviction because of complaints (many) from other tenants of a family re. noise, drugs. etc. They were due to be evicted last week. Now frozen. The losers are the other tenants living in the block.


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## mrypg9 (Apr 26, 2008)

kaipa said:


> Empty properties will be either subject to higher tax or requisitioned. I am afraid the idea of property as a investment and income source has had its day. Look at Spain 65,000 workers in the construction industry are now unemployed. Spain has a huge amount of empty housing stock. Do you really think a nearly bankrupt economy are going to prop up this sector? How many Brits come on this forum with plans to buy an apartment in Spain that they intend to be paid for by rentals? Should these people be first in line for help? It might appear a tough world now but it has always been like this for many people it's just you dont really care as long as you are doing okay


The answer to your questions is No. Any investment in any asset carries risks as well as rewards. To me, the idea of buying an asset and relying on someone else to pay for it is a big no-no. I have never owned a property I had to rely on someone else to pay for.

Why should the taxpayer yet again subsidise private acquisitiveness? Where's moral hazard in all this?

As for the stock of private rentals drying up....well, maybe the public sector - local municipalities, co-operatives, mutual societies, housing associations and other kinds of non-profit organisations will fill the gap. 
But then I have this quaint old-fashioned idea that housing, health, education, care for the elderly and other social services should never be the object of private profit and speculation.


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## mrypg9 (Apr 26, 2008)

kaipa said:


> Higher levels of taxation across the whole spectrum are inevitable. Everyone will be expected to contribute more this time. That way no single group will receive preferential treatment. Already we have people going on about it will affect their pensions, their properties, their investments
> We are all in it together so we should all just accept that our individual wealth will take a kicking and give thanks that is all it will be


But there are groups that deserve 'preferential treatment' and those that don't. I'm not concerned with pensions, investments, properties. I have investments and pensions , no properties, I'll take a hit. I don't work so I accept priority goes to getting working families back on their feet.

The lower paid already are affected disproportionally by current tax regimes. Purchase taxes fall most heavily on the poor and the tax threshold in most countries starts at too low a level. Neither are most tax regimes sufficiently progressive. those earning £80k, £150k , £200 k plus shouldn't be taxed at the same rate.
Not all high earners are in jobs with low if any social value. Some teachers, health service workers, police officers, local government workers with responsible positions earn well above the mode, especially if they work in big cities.
That's certainly true for the UK and also for Spain although probably less so.


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