The anticipated 2018-2021 Housing Plan is finally here. After months of waiting, the scheme has received the green light for approval by the Council of Ministers held on March 9th. This is an agreement that is being read with magnifying glass since it includes assistance for buying, renting and renovating homes within the national territory and its effects will be retroactive, as they will be valid from January 1st, 2018.
We would like to dedicate this article to specify the main guidelines of the 2018-2021 Housing Plan, with special emphasis on the rental assistance that's available for those under 35 years of age.
What are the rent subsidies that people under the age of 35 can benefit from?
Íñigo de la Serna, the current Works Minister for the Government of Spain led by the People's Party, has been responsible for establishing the guidelines of the plan and specify what will be the benefits that people under the age of 35 can enjoy when renting a property. In any case, we want to emphasise that the granting of these schemes will be limited to those who earn a maximum of three times the IPREM (Public Indicator of Multiple Effects Income), which is currently at € 7,455.14. This means that only those who earn less than € 22,365.42 gross per year will be eligible for this grant.
However, there are some exceptions regarding these rental conditions. For example, the maximum threshold may be four times the IPREM, that is, 30,078.36 euros if the applicant is part of a large family. Similarly, it may amount to € 37 597.95 or whichever is the same, five times the IPREM (33 per cent or higher) when within this large family there is one or more members with a recognised disability.
Rent subsidies for the under 35 year olds
By reading the terms and conditions of the plan, one will realise that the text states the tenants who are entitled to this subsidy will be able to enjoy 50 per cent of the agreed monthly rent up to a maximum of € 600. However, in some cases, this maximum amount may amount to € 900, as long as it is properly justified.
The determining factor to establish whether the maximum limit should be set at € 600 or at € 900 will be determined by the market. You just have to think about the situation in which the properties for rent are located in cities such as Ibiza, Barcelona, and Madrid to realise that this increase is fair and necessary. Of course, this subsidy, or the increase referred to above, can not be granted to those who already own a home within the national territory of Spain. In addition, the rented dwelling must be your own habitual residence during the entire period of time in which you collect the subsidy with a maximum of 3 years.
To all this we must add that in the section of the text which states the rent subsidy is from € 601 to € 900, the amount is not granted in a percentage of 50 per cent, but 30 per cent of the monthly rent.
What are the other incentives for under 35 year olds to take advantage of?
Those under 35 years of age will be able to enjoy other grants and subsidies thanks to the incentives that are included in the plan. In particular, these subsidies do not refer to the locations that are for rent, but to the purchase of a house. Among the main objectives of this aid is to further enhance this market, which is one of the main engines of Spain's economy, and facilitate access to housing for the youngest.
To be exact, the plan presented by the Ministry of Public Works states that up to € 10,800 will be subsidized for those who are under 35 years of age and who aquire a house in municipalities with a population of less than 5000 inhabitants. Undoubtedly, this is a measure that aims to prevent the depopulation of rural areas and to curb the enormous growth of some of the major cities of our country.
Specifically, the terms and conditions of this subsidy refers to the amount awarded corresponding to 20 per cent of the total value of the home to be purchased with the specified limit of € 10,800. For its part, the house can not have a value that exceeds € 100,000. It is estimated that, at present, there are approximately 52,000 homes within our country that meet all the requirements contemplated by the plan in order to be able to grant aid, which represents 23.6 per cent of the total current property market.
What about the rest of the population, are they not entitled to get help for renting or buying a home?
The answer is yes. Specifically, the recently approved plan includes a rental aid for people between 35 and 65 years of age up to 40 per cent of the rent with a maximum of € 600 and provided that the IPREM is not more than three times the amount. The requirements are exactly the same as for those who are under 35 years of age.
On the other hand, for those over 65 years of age like the retirees who reside in rental homes may also enjoy a subsidy of up to 50 per cent of the income they pay monthly provided their gross income does not exceed the IPREM multiplied by three. In addition, to this must be added an additional requirement: the applicants will not be able to have savings that exceed € 100,000 in order to be able to be eligible for this subsidy.
In summary, the 2018-2021 Housing Plan promises to serve as an incentive for the rental and purchase of property, especially for those under the age of 35 who reside in large cities or want to settle within small municipalities. This is certainly a good option for a more sustainable urban model and for improving the lives of young people in the country.
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