Illegal Property Rentals (Spain)
Whether or not you need a licence to rent out Spanish property s been the subject of much debate lately.
Mark Stucklin (Sunday Times Home Section, 16 September 2007), points out - “Recent reports suggest that most holiday rentals in Spain are illegal without a licence, and can incur fines of €30,000 for unsuspecting owners.”
Frightening news for many Britons - especially those hoping to pay off the mortgage through renting. But is it all bad news? The whole issue seems to be surrounded by
speculation, confusion, half-truths and oftentimes just plain wrong information. It’s Spain remember - things are never as they seem…
The truth is that, for the moment, most property owners are completely unaffected by the licence situation. You’ll only really need a licence in certain parts of the country and in those areas the law is rarely enforced properly.
The laws in Spain
Spain is notorious for its laid-back “manana, manana” lifestyle. In some cases, the same attitude extends to legal procedures. Also, with so many “illegal” properties being rented out all the country, it’s almost impossible to effectively enforce these license laws.
Online there are literally thousands of properties advertised for rent in both Spain and on the Canary and Balearic Islands. A significant proportion of these are owned by British property owners who have no idea about licence laws and therefore, whether or not they are breaking these laws.
Even if people are aware of the rules and regulations concerning tourist rental licences, most of them have difficulty interpreting them, as they are so unclear.
It’s certainly confusing - as with a lot of things in Spain. The rules concerning tourist rental licences vary widely throughout the country.
In Murcia you have to register with the department of tourism if you want to rent out your property to tourists, whereas in most other parts of Spain all you have to do is tell the local government about your plans to rent it out.
Ultimately, the Spanish government probably just wants to keep tabs on who’s receiving money from holiday rentals so they can make sure the correct taxes are received.
Which parts of Spain actually need a license?
“I can categorically state that you don’t need a licence to rent out a private apartment or villa to holidaymakers on mainland Spain”, according to Lee Jones, head of OPI Property Management and Lettings.
Apparently they’ve had their specialist lawyers confirm this, pointing out that, “with 3,500 holiday rentals this season, we can’t afford to make a mistake.”
It’s a different story on the Balearic Islands though, Mallorca in particular. Here you’re not allowed rent out private residential apartments. “The only kind of residential property you can rent out is a detached villa, but only if you have a licence”, according to Isabel Loeffler, (head of Loeffler Legal Centre, on Mallorca).
It gets worse…
The tourist department on Palma are now saying that it’s not even possible to get a licence to rent out a detached property anymore.
Buy-to-let investors could always choose an “apartamento turistico”, which is a purpose built property, intended solely for renting out.
For homebuyers wanting to make a few quid renting out while they’re not there, they’re not really suitable. Apartamento Turisticos carry a lot of restrictions and potential extra costs.
So what can you do?
It still seems unclear. To be on the safe side, speak to a local Spanish lawyer who should know the specific licence situation in whatever part of Spain you’re considering investing in.