Who is eligible for the moratorium on mortgages due to COVID-19?

The Spanish Government has agreed to approve a moratorium on mortgage payments for people who have lost their jobs or had their income reduced by the coronavirus. This is part of the royal decree that will be coming into force this Tuesday to address the economic and social impact of the pandemic on families and individuals.

These measures, as confirmed by government sources, have been proposed by Unidos Podemos, who since last week have been putting pressure on the PSOE to adopt economic measures with the widest possible scope to support citizens during this time of need.

The government has advised that the ministers will hold talks at 10:30am on Tuesday and that they are expected to be “long and dense”, mainly due to the extensive nature of the econòmic measures which the country is expected to adopt, say sources at the Palacio de La Moncloa.

Vulnerable Groups
According to the draft they are handling in the Placa de La Moncloa, these economic measures are anticipating that the individual paying the mortgage will become unemployed. Or, if they are a businessman or professional, that they will suffer a substantial loss of income or a substantial drop in sales. As well as the above, the stimulus will not be available to groups where the total income of the members of the family unit does not exceed certain limits in the month prior to the request of the moratorium.

These limits are, in general, three times the annual Multiple Effects Income Public Indicator of fourteen payments (hereinafter IPREM). This limit will be increased by 0.1 times the IPREM for each dependent child in the family unit.

The increase applicable per dependent child shall be 0.15 times the IPREM for each child in the case of a single parent family unit. This limit shall be increased by 0.1 times the premium for each person over 65 years of age in the household.

In the event that any of the members of the family unit has a declared disability of over 33%, a situation of dependency or illness that makes them permanently incapable of carrying out a work activity, the limit foreseen will be four times the IPREM. Without taking into accountto the accumulated increases per dependent child.

People with cerebral palsy, mental illness or intellectual disability

It is also foreseen that in the case that the mortgagor is a person with cerebral palsy, with mental illness, or with intellectual disability, with a degree of recognised disability equal to or greater than 33%, or a person with physical or sensory disability, with a degree of recognised disability equal to or greater than 65%, as well as in the cases of serious illness that makes the person or his/her carer demonstrably incapable of carrying out a work activity, the limit foreseen will be five times the IPREM.

Other cases are that the mortgage fee, plus basic expenses and supplies, is equal to or greater than 35% of the net income received by all members of the family unit. And that, as a result of the health emergency, the family unit has suffered a significant alteration in its economic circumstances in terms of the effort required to access housing, in the terms defined in the following point.

When will the moratorium be contemplated?
For the purposes of the rule, a significant alteration in economic circumstances shall be deemed to have occurred when the proportion represented by the mortgage payments on household income has been multiplied by at least 30%. And for businesses and professionals, that a substantial fall in sales has occurred when this fall is at least 40%. Lastly, the vulnerable group by family unit includes: the debtor, his or her spouse (not legally separated) or registered partner and children, regardless of age, residing in the dwelling. Also included are those linked by a relationship of guardianship, custody or foster care.

If you require any assistance or legal counsel concerning properties, purchases and sales on the islands of Mallorca, Menorca and Ibiza, please contact us at your convenience at info@mallorcasolicitors.co.uk or by phone on the numbers listed on our contact page

 

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