Spain wants young people to leave home – and is offering them $300 a month to do so

Wealth

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Spain is planning to offer young people aged 18-35 years old 250 euros ($289) a month to incentivize them to move out of their parents’ house and rent. 

Spanish President Pedro Sanchez announced the proposal on Tuesday, as part of the government’s 2022 budget. 

Young people earning less than 23,725 euros a month would be eligible for the rental bonus, if the budgetary proposal is approved. In addition, the most vulnerable families may be offered additional subsidies covering up to 40% of their rent, according to the government announcement. 

“We are talking about a fair economic recovery and this means facilitating access to housing, especially for those who are most vulnerable to precariousness, such as our young people,” said Sanchez, making the announcement at an event organized by United Nations Human Settlement Programme, known as UN-Habitat. 

Eurostat data from 2020 showed that people in Spain moved out of their parents’ house at around 30 years old on average, four years later than the typical age for the whole of the European Union, of 26 years old. 

A report by U.S. thinktank Brookings, published in April, stated that less than one in four homes were rented out in Spain. However, the report noted that there had been a gradual growth in demand for rentals, due to job insecurity and low salaries preventing young people from buying a home, as well as more caution from banks to offer mortgages. 

According to data published by Eurostat, a one-bedroom apartment in the Spanish capital of Madrid was estimated to cost 1,000 euros a month to rent in 2020. 

Separate data from Eurostat showed that in 2020 a single person without children in Spain had net earnings of around 21,241 euros, which was slightly below the EU average of 24,005 euros. 

Check out: How to save more and reach your financial goals by the end of the year

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