New Holiday Rental Law?

[mallorcaboy]

New Holiday Rental Law

We're all pretty much in the dark here, but my understanding is that NO RESIDENTIAL PROPERTY can be rented out commercially without correct paperwork. You may find also that some developments you may be tempted to buy in, have enforceable regulations that forbid renting. You may not find this out until you have bought.
The long and short of it seems to be that Hotels have put pressure on the Government to stop all commercial letting of residential properties over the next few years, and coupled with the Spanish Tax office who see millions of untaxed euros disappearing, the private rental business will soon become totally regulated.
Be very careful if you intend to buy to rent out in this way because you may find in a few years this will not be possible unless you under thr strict incoming regulatios or do it illegally. Spain’s' somewhat laid back attitude to illegality regarding properties is changing. This can be seen in things like alterations to properties without permission used to mean a fine, now can result in demolition of the new works.
In a nut shell, if you have to rely on commercial renting to fund a purchase here in Spain, give it a lot of thought

 

[allanglens]

Re: New Holiday Rental Law

Agreed. I am sure that I had seen somewhere that commercial letting was technically illegal - now it appears that it is going to be enforced.

I suspect that this is aimed at the commercial market of actual companies or organisations acquiring individual properties and even blocks built for owner-occupation and then letting them out, with no intention of having anmy permanent occupiers. I suspect that there are quite a few of these out there in PP, and you may find that if it is enforced it may affect property prices if they decide to sell up. Of course the really unscrupulous or illegal ones will continue until they are caught, and the legit ones will register.

One also wonders how enforceable it will be against private owners who advertise in the UK, take their payments through UK accounts, and then send the keys to their 'brother-in-law'.

On the upside, it may restrict the supply of accommodation, so those who are registered may find scope to up their rents.

allanglens

 

[PeRu]

Re: New Holiday Rental Law

We spoke to Tony De La Cruz's office yesterday, but not to Tony directly. His secretary rang us back, having spoken to him, saying that this doesn't apply to individual apartments.
Se rang us back in the afternoon saying she had spoken with Oscar Coll, Tony's partner. Aparently it applies to villas,fincas and blocks of apartments that are owned by individuals/companies who let the whole block.
Perhaps someone would like to clarify this.
PeRu

 

[SENOR CIGAR]

Re: New Holiday Rental Law

JUST TO HELP DEPRESS EVERYONE FURTHER ON THIS SUBJECT OF LETTING I HOPE EVERYONE IS AWARE THAT IF THEY LET (WITH OR WITHOUT ANY LICENCE THAT MAY BE REQUIRED IN THE FUTURE) THEN THEY ARE LIABLE TO SPANISH INCOME TAX ON TOP OF THE WEALTH TAX THEY ALREADY PAY ANNUALLY.
THIS TAX IS AT 25 % OF THE GROSS LETTING FEE WITHOUT ANY ALLOWANCE FOR MORTGAGES ,CLEANING, HEATING ETC THAT ONE WOULD NORMALLY EXPECT TO DEDUCT AS AN ALLOWABLE EXPENCE.
ADDITIONALLY THIS TAX IN THEORY IS PAYABLE WITHIN 28 DAYS OF THE END OF EACH PERIOD OF LETTING.THIS MEANS A LOT OF PAPER WORK WITH THE TAX OFFICE IF YOU STICK TO THE RULES BUT PEOPLE DO DO AN ANNUAL RETURN FOR THE YEARLY TOTAL TO OVERCOME THIS AND LET FROM 1 ST JAN UNTIL THE 31 ST DEC AS ONE CONTINUIOUS LET WHICH THE TAX AUTHORITIES WILL ACCEPT.
JUST TO FINISH OFF YOU ALSO NEED TO DECLARE YOUR PROFIT ON YOUR UK TAX RETURN EVEN IF YOU HAVE PAID SPANISH TAX BUT YOU SHOULD BE ABLE TO RECLAIM THIS IN DUE COURSE UNDER THE DOUBLE TAXATION AGREEMENT BETWEEN SPAIN AND UK PROVIDING YOU CAN GET PROOF THAT TAX HAS BEEN PAID IN SPAIN FROM THE AUTHORITIES NOT AN ACCOUNTANT OR SOLICITOR THERE!!!
:hat :hat :hat

 

[jesse2002]

Re: New Holiday Rental Law

As far as the council is concerned this only applies to villas. Think about the bleak financial prospect for Spain if they bought in a leglislation that affected the whole rental market, this is certainly not something that anybody wants.
Fortunately this is not Menorca.......yet...........

 

[PeRu]

Re: New Holiday Rental Law

Hi jesse2002,
Could you please expand on "Fortunately this is not Menorca....yet
Thanks
PeRu

 

[jesse2002]

Re: New Holiday Rental Law

Hi
Having dealt in the past with an owner of a large rental company in Menorca he explained to me the huge problems they are experiencing recently as Menorca tightens up on rentals. Menorca is like a massive nature reserve and so the laws are even stricter than here, imagine the S'Albufera the size of Menorca and you can appreciate the difficulties people have, very good for the ecosystem (which I am all for) but tough on renting and building etc.
Once you move forward the way Mallorca has, it is very tough to go back, which is why I can't personally see many enforcable laws coming out regarding renting of properties.
Anyway like I said, only my thoughts, but that's what a forum is for right?

 

[smiddy]

New Holiday Law re Renting

Am i alone in thinking owners shouldn't be allowed to rent out apts? Our apartment block does not allow commercial letting and this for the most works well. You do get the odd one who tries now and again, and this is were problems begin. The wrong sort of family(Brits on Tour) and a lot of holidays could be ruined, it only takes one. Some people on these blocks are residents, and it plainly isn't fair to them. I believe the previous owner rented out our apt and i can still see the scars, i also believe he spent a lot of time replacing broken furniture.

As MB says if you're thinking of buying a property and part-financing it with rental income, tread warily.

 

[Belladonna]

Re: New Holiday Law re Renting

Bit of a controversial opinion there Smiddy!! I for one would love to be able to afford to buy my apartment outright and be able to use it when ever I wanted without having to rent out. As previously posted, the last set of renters did cause me a little heartache and we rethought whether we should carry on renting.

We rent through an agency, so pay all relevant taxes etc, but I dont think that was your main gripe was it? Many I know do rent privately and so have the chance to do a slight vetting process.

August is going to be noisy all over the tourist parts of the Island and all accomodation is subject to "high spirits"!

When we had apartments in Alcudia in one of the Siestas, we actually found that it was the permanent residents that caused the most noise!

As soon as I win the lottery, I promise I wont rent out my dream villa!! 8)

 

[Bella]

Re: New Holiday Law re Renting

Hello all, this is my first posting.

I'm sorry if this is going over old ground but I have only just discovered about the new villa licensing law. My villa is about a month off being finished and I have really struggled to find the law (preferably in English!) and details of the requirements the villas must meet.

Can anyone tell me anything or point me in the right direction?

Thanks alot.

 

[pollensa]

Re: New Holiday Law re Renting

Hi Bella,

please read the rest of this topic which I assume you may already have. The only link we have is the one in Spanish in one of the posts in this topic. As suggested elsewhere in this topic the best thing you can do is to contact your solicitor. All the information we have is contained in this discussion which you have been reading.

If you learn anything else, please post back here for everyone else's benefit.

Thank you

Webmaster

 

[allanglens]

Are we sure they are talking about holiday lets...?

'cos if you run the Spanish text thru' 'Babel Fish' you get some very interesting translations!

vis. "2. In these registries the drug dealers of tourist stays in houses will have to register, after the contribution of previous the mandatory documentation that will settle down prescribed"

Obviously Spanish legalese is just as incomprehensible as English!

allanglens