With the new law on urgent measures to limit rent on residential leases, Law 11/2020, that came into force on 22 September 2020, Barcelona entered a new phase to regulate rental prices by introducing a housing rent reference index.
This Law aims to set a limit on prices of rental accommodations through the index. Up until now, the rent reference index had only been indicative, and there were three reference price options: the lower, the higher or the index itself.
New regulations are now stating that long term rentals are not allowed to exceed the rent reference index.
In this article we have collected the law’s most important information, so you will be fully aware of the details.
What does the rent reference index in Barcelona mean?
This rent index for rental housing is a reference framework determined by the Agencia de Vivienda de Cataluña, and it also takes data provided by the Incasòl (Institut Català del Sòl) into account. The index represents a certain value per square metre in a certain given area.
How to work with the rental price index in Barcelona?
The Catalan government has provided a service for users by means of a useful tool. To determine the price according to the rent reference index, you must enter the following data:
- The property address
- The house’s useable area in square meters (which you can find in your apartment’s cédula de habitabilidad)
- The condition the apartment is in
- The floor on which it is located
- The year of construction
- The Energy Certificate
- If the place includes a parking space, an elevator and/or furniture
Once you have entered the data, the only thing left to do is multiply the value established by the rent reference index by the property’s number of square metres.
The value of the index is determined by a geolocation system. Depending on the data you have entered in the form on the website, the tool then values the price according to maximum and minimum rental prices found within your search area.
The index is based on an objective average of recorded data and the type of area, and it weighs minimum and maximum rental values found in the exact area where the property is located.
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Where should the rent reference index be applied?
Rental prices have been rising in Barcelona for quite some time now. The demand for housing in the city has caused for rental prices to keep increasing, in order to be able to compete with the number of properties.
For this specific reason, the law has defined “Strained Housing Market Areas“, and the list contains 60 municipalities in Catalonia where rental prices have increased the most. These areas are:
Rent reference index in Barcelona: FAQ’s
To understand how these changes may affect you, ShBarcelona has answers to your questions, and these answers will help you understand the impact of this new law.
What kind of rental accommodation does it affect?
The law is aimed at long-term rental contracts, that are signed from the day the law was published and that are located in an area declared as a Strained Housing Market Area, affecting 60 municipalities in Catalonia.
What is the maximum rental price that can be set?
The rental price of the residential accommodation cannot be higher than:
- The one established by the rent reference index
- The one in the last rental contract (if this was also lower than the price set by the index)
The index sets a price per square metre, so in order to determine the rental price, you need the usable area of the apartment which can be found on the cédula de habitabilidad (occupancy certificate).
When does the limit set by the index not have to be applied?
- If the tenant has an income of equal to or less than 2.5 times the rent indicator (19,919.33 euros/year), and the owner has an income equal to or more than 3.5 times the rent indicator (27,887.05 euros/year)
- If the property is subject to special rent determination regimes (e.g., officially protected housing)
When does the price limit of the previous contract not have to be applied?
If the last contract that was signed was with a family member. In this case the index price can be applied, even if the price of the previous contract was lower.
When is monthly rent allowed to be higher than the index?
1. The maximum rental price may be increased with up to 5%, if at least 3 of the following elements are present in the apartment:
- Parking space
- Furnished apartment
- Heating or cooling system
- Community areas for shared use, such as a garden or rooftop
- Communal swimming pool or similar facilities
- Concierge services in the building
- Special views
2. If during the last year major renovation works have been carried out, for which a work permit for major works was needed. These are works that improve habitability, safety, comfort and/or energy efficiency.
Who pays for general and individual services?
Both parties need to agree on who will be responsible for what. The rental contract must describe every item separately and with a monthly breakdown of the costs.
In the month of January of each year, the annual report will show if there is a difference between the amounts transferred to the landlord and the actual costs made. If the tenant has paid more, the difference will be refunded.
Rent your property through ShBarcelona
Now that you know everything you need to know about the new law that determines rental prices in Barcelona, you are ready to start renting and living in a new place.
Whether you want to rent an apartment in Barcelona or – as an owner of a property – want to get higher yields by renting the apartment out, you can contact our team and we will advise you on the options.
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