Spanish Rental Licences (what you should know…)
One of the biggest issues facing Spanish property owners and investors is whether or not they need a licence to rent out their property to tourists. Most people don’t know the answer. The law is quite unclear on the subject – a common occurrence in Spain.
A significant number of holiday rentals in Spain are illegal (without a licence). The scary thing is, that you can incur fines of up to €30,000 – €30,000 for doing something you didn’t even know was illegal!
There’s a wealth of incorrect information out there – a mixture of confusion, speculation and hype.
So, what’s the truth? According to a recent article (Sunday Times Home Section, 16 September 2007) “In reality, you need a licence only in some parts of Spain, and most owners are unaffected”.
Spanish Laws
Although some people are technically breaking the law in certain parts of Spain, renting without a license is widely practiced and the laws regarding it are not properly enforced.
For the authorities, the problem is there are just so many properties being rented throughout the mainland and on the two archipelagos. It’s almost impossible to track them all.
You only have to look on the Internet to see the amount of private properties for rent in Spain. There’s literally thousands. A lot of these are owned by UK nationals, many of whom are completely unaware that any licensing laws even exist. Those who are aware of the laws mostly don’t understand how they are to be interpreted and if they will actually be enforced.
It certainly can be confusing but then again, this is Spain. These laws seem to vary too, depending on which part of the country you are in.
For example, if anyone in Murcia (Southeastern Spain) wanted to rent out their private property to tourists they’d have to first register with the department of tourism (nobody does by the way). For most other parts of Spain, they’d just have to inform the local government about their plans to rent.
Most probably, these licences are an attempt by the government to keep track of who’s earning money from property rentals, so they can tax them accurately.
Areas where you’ll need a rental licence
The Balearic Islands, for one. Up until now you couldn’t rent out any type of private residential apartments. The only kind you could rent out was a detached villa and you’d have needed a licence to do so.
But now, according to the tourist department in Palma you can’t even get licences to rent out detached properties in Mallorca!
Things are apparently different on the mainland. Some people claim that you don’t need a license at all. “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). This has been checked and confirmed with a group of specialist lawyers.
Long-Term Rentals
You don’t have to have a special licence to rent accommodation if it is a long-term let, for some reason. You will however, be liable to Spanish VAT laws.
Renting for more than a year can be risky. If you do so, you could find yourself in trouble, as in Spain people staying in your property for more than a year acquire all sorts of rights regarding their newfound accommodation.
Conclusion
The Spanish are renowned for laid-back, “mañana mañana” lifestyle. This approach to life often extends to the way they conduct business and enforce laws. It’s all part of their unmistakable charm!
Sometimes it can be annoying though – and in some cases very expensive. In all this confusion, the only advise is to a consult a local lawyer who should know the exact licence situation in whichever part of Spain you’re considering investing in.