The consequences of the crisis caused by COVID-19 continue to lead to legislative developments. It is known that the situation is priming with the hospitality and commerce sectors. The government's alleged shock plan has been materialized in Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and trade sectors and in tax matters.
Among the measures that the executive adopts, the main one deals with a 50% discount on the rent in the hotel and commercial premises owned by large holders (considered those that have more than 10 urban properties, excluding storage rooms and garages, or a constructed area of more than 1.500m2).
There are a series of requirements to access this help.
- The main one is that the premises must belong to a large owner. Therefore, the reduction is not required in all cases.
- In addition, it is necessary that there has not been a prior agreement between the parties for the temporary reduction in rent or a moratorium on payment during the pandemic.
With these conditions, the tenant may request before January's 31 (i) the 50% reduction, or (ii) the moratorium on the payment of rent. The deferred payment of the rents may be made during a period of two years from the end of the moratorium, and always within the term of the lease or its extensions, distributing the amounts proportionally.
The choice of one of the two alternatives will correspond to the landlord.
The chosen option (removal or moratorium on payment), will be duration the duration of the state of alarm (in principle until May), its extensions and the four subsequent months.
We can deduce from these measures the government's claim to pressure large landowners to renegotiate rents in cases where it has not been done before. If it is not done, The consequence for the big holders would be to give up half the rent or even receive nothing in the next few months. Despite the lack of estimates, it seems that the measure could help many small entrepreneurs who have been suffocated for months.
Finally, and among the various measures included in the RD, you can also choose some tax benefits to smallholders (with ten or less premises) that agree to renegotiate their rents, for the months of January, February and March 2021; as the deduction in the personal income tax of the reduction in the rental price that is agreed. If 100% of the amount is forgiven, the owner may deduct the equivalent of that amount on his return.
