Aware of the housing crisis and in search of a balance between tourism -the main economic engine of the island- and the residents, the Consell Insular de Ibiza has a roadmap with the aim of destensioning the real estate market, both for sale and rent: the Limited Price Housing (VPL). All to guarantee the following premise: “Residents first“.
In addition to setting limits to growth in order to avoid a situation of collapse, the island president, Vicent Marí, has gone into the search for the necessary legal tools to “curb” the construction of free housing, which usually end up in the hands of foreigners due to the out-of-reach values of Ibizans.
And one of the bets is precisely the Limited Price Housing. That is, a type of subsidized housing that is not subject to direct public subsidies, but is subject to amaximum sale or rental price set by the administration.
“What is proposed would be to promote more private housing at a limited price for residents, as the VPL,” have recognized from the Consell a La Voz de Ibiza.
Along these lines, they remarked that “it is a measure that needs to be analyzed“.
This is an intermediate category between free housing and subsidized housing (VPO). Of the latter, there are several projects in the pipeline in Ibiza, although the timing and progress do not coincide with the urgency of the housing crisis.
In private hands
With below-market prices, the VPLs seek to promote access to housing in areas where the real estate market is under pressure, without direct government intervention in the form of subsidies, but through price regulation.
In return, developers usually benefit from urban planning advantages -such as increasing the buildability and use of plots- or tax advantages that make this type of investment attractive.
The public administrations set a maximum price per square meter, both for sale and for rent, while the buyer must use the property as a habitual and permanent residence, at least for a certain period of time. In the meantime, it cannot be sold or rented freely for a period of time if it is not at the limited price.
Current regulations
Law 3/2024, of May 3, on urgent housing measures, establishes the possibility of creating more affordable residential supply with regulated maximum sale and rental prices.
Article 2 creates a new figure, which is the limited price housing (VPL), “of a permanent nature, which has as its most important characteristic a limitation of its maximum purchase and rental price”.
This proposal “is fundamentally a housing that, in addition to the price limitation, has other conditions that differentiate it from an ordinary free housing, such as the limitation to a maximum surface area of 90 sq. m., the use as the habitual and permanent residence of the users or beneficiaries, and that they cannot be holders of full ownership or of a real right of use and enjoyment over any free housing or housing subject to any protection regime, located in the Spanish State”.
The regulation establishes that the VPL “must constitute the habitual and permanent domicile of its users or beneficiaries, and in no case may they be marketed under the tourist stay modality provided for in the tourism legislation”.
In order to have access to limited price housing, in any of the modalities of access to these dwellings, “the beneficiary must be a natural person of legal age, resident in the Balearic Islands, and may not be the holder of full ownership or of a real right of use and enjoyment over more than 50% of any free housing or housing subject to any protection regime, unless the housing becomes unsuitable for personal or family circumstances or other objective circumstances duly accredited”.
In addition, it establishes that “the term during which these dwellings will be subject to the established limitations and will maintain the status of price-limited housing will be permanent”.
The first cases in the Balearic Islands
This has led to the development of different projects. For example, in the town of Manacor in Mallorca, the first complete development of affordable housing has been inaugurated, the result of the transformation of spaces that were not previously residential (for example, former commercial premises) into 10 affordable apartments for residents.
The purchase prices of these homes are between approximately 119,000 and 164,000 euros, which makes them very different from the traditional free market in the Balearic Islands.
In the neighborhood of Es Pil-larí, in Palma, the Government is building VPL promotions as part of the housing shock plan. The project includes 88 new homes, with apartments that are part of this affordable figure, with prices ranging from about 169,000 to 275,000 euros, depending on the surfaces.
The example of Santa Eulària
One of the first examples of this type of action in Ibiza is in Santa Eulària des Riu, where the City Council has awarded the UTE formed by the Fundació Privada Salas per l’Accessibilitat and Salas Promohabit S.L.U. the construction of a 90-housing development intended entirely for rent in the area of s’Olivera, in Puig d’en Valls.
The project, with a total investment of 21.09 million euros (VAT included), will be developed on two municipally-owned plots of land that the City Council will transfer by means of a 75-year surface right, so that, once this period is over, both the land and the buildings will revert to the municipal patrimony. Construction is scheduled to begin in June 2026, with an approximate completion period of 31 months and an estimated delivery date of January 2028.
The mayor of Santa Eulària des Riu, Carmen Ferrer, stressed that this award is “another step in the commitment of the City Council to expand the supply of affordable housing and ensure that residents can develop their life project here”. The action is part of the municipal plan ‘Santa Eulària Crea Futur’, aimed at facilitating access to housing for young people, seniors and families through sustainable and public management formulas.
Access requirements
To qualify for one of these homes, it will be necessary to meet three general requirements: to be a tax resident in Spain, not to own any property in the country and to be registered in Santa Eulària des Riu for at least 10 years of the last 20 years. From that threshold, half an additional point will be awarded for each year of residence, up to a maximum of five points.
The ranking system prioritizes young people, senior citizens and families. In the case of family units, one point will be added for each dependent minor. In addition, seven additional points will be granted to applicants between 25 and 40 years of age or over 65 years of age. Access to housing will also be subject to minimum and maximum annual gross income limits, set between three and ten times the IPREM, depending on the type of housing.
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