The Spanish Government have introduced a rental subsidy for young
Decree provides aid for young tenants, a loan to cover the rental guarantee
and the cost of guaranteeing the rental contract.
will be managed by the Autonomous Communities and paid by the State.
will apply to both existing rental contracts and young persons who are
currently sharing with family or friends.
details are provided at the Spanish Ministry of Housing Website -
Follow the link to "News/Read More" and look for "02/11/07 El
Gobierno aprueba la renta de emancipación de 210 euros mensuales"
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A précis of the press release about the rental subsidies
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
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
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
A Social Security Number.
Proof of Employment, Education Grant and/or other source of
In the case of an existing rental agreement: the Rental
Contract, Address of the Property, the Owners Name Address and DNI and the
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
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.
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
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.
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
Even if the expected 361,000 young people become emancipated
and participate in the scheme that still leaves around 3,269,000
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
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
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
Some recent examples are the LRAU and the Foreigners Residence Card fiascos.