Media reports of holiday home owners being fined up to €30,000 for renting out their homes without a licence has caused controversy and concern. Adding to the confusion is the ambiguity of information, largely due to regulations varying from region to region.
A recent survey at the Spanish property portal Kyero found that 82% of (mainly British) respondents didn’t know whether rental licences were required: “Clearly, there is a lack of knowledge and awareness about this particular aspect of Spanish law,” says Martin Dell, head of Kyro.
It isn’t known how many second home owners in Spain are dependent upon rental income as this largely unregulated activity falls into the ‘informal economy’ category. The numbers involved will vary from one province to another, and fluctuate with the economy.
“You don’t need a licence to rent out a private apartment or villa to holiday makers on mainland Spain,” argues the owner of one rental management company. “We have had our specialist lawyers check this for us, and with 3,500 holiday rentals this season we can’t afford to make a mistake.”
There can only be one answer to the question on everyone’s lips, says property pundit Michael Walsh. If you decide to rent out your holiday home while you are not in residence then it is in your interests to know the legal situation wherever your home is situated.
Employ a local solicitor where you either have or intend to buy your buy-to-let property. Your legal representative will be best placed to peruse the legislation governing such use. They will identify any clauses or covenants within the property deeds that relate to short term rental activity. i.e. less than three months.
Either your solicitor or you yourself can contact the local authority to see if a ‘tourism licence’ is required. In most cases your enquiry should be directed to the Town Hall. If there is such a requirement they will be best able to explain and process the application for you. Inevitably contradictions will exist so again your solicitor is best equipped to ensure the legality of your intention.
Be aware too of taxation rules, which again vary from country to country, as you must presume to pay tax on rental income earned. Don’t be too concerned that such taxes may be burdensome as there are double taxation treaties between most countries. These take into account and offset taxes already paid. In Spain, the gestoria, who is often engaged on your behalf by your solicitor, may well be able to guide you in compliance.
Another reason for leaving it to the legally qualified is there being two types of holiday property recognised in Spain. They are categorised as either apartamentos turisticos (tourist apartments) or viviendas vacacionales (holiday homes): the legal implications again vary.
Informed advice reveals that in Murcia you need to register with the department of tourism before you can rent a private property to tourists, and can be fined for not doing so.
In Andalusia, on the other hand, you only have to inform the local government of your plans, and in the Valencian region you don’t need to do anything. It would seem that most British owners of private properties on mainland Spain can relax, though they should always clarify their case with a local lawyer