Many people that purchase a holiday home in Spain consider renting it out to tourists when they are not using the property themselves.
This can be an effective way of earning a healthy income, but beware – there are certain rules regarding the Spanish rental market that you must understand before you start seeking holidaymakers to rent your property.
In 2013, the law in Spain was amended to devolve regulation powers of holiday rentals to the region in which the property is located.
The change was implemented after hoteliers complained that those renting out holiday homes did not have to adhere to the strict rules and regulations that they do.
Therefore, the amendment attempted to create a balance and raise the standards of holiday lets to match that of hotels.
What the law says
The law regarding Spanish holiday lets varies for each of the 17 self-governing regions of Spain.
For example, some inland areas with low levels of tourism, such as Castilla-La Mancha and Castilla y León, do not have regulations.
However, holiday hotspots, such as the Canary Islands and the Balearic Islands have very strict standards – but be aware that rules vary even between islands.
For other areas of Spain, here are some regulations that you must be aware of:
- Valencia
Holiday rentals in Valencia are subject to strict criteria in regard to the accommodation and furnishings provided. Additionally, a recent change to the law means that all holiday lets must be registered with the Register for Tourist Businesses, Establishments and Professionals.
Once registered, you will be given a registration number, which must be included in all advertising and marketing material for the property. If you do not comply with this regulation, both you and the advertising platform could face fines.
- Asturias
In Asturias, you cannot rent out a flat for less than 30 days. If you are renting out a holiday home, you must offer the property for rent for at least July, August and September. This is to stop people living in their beach homes during the summer months.
- Basque Country
If you are renting out just one property in the Basque Country, then you do not need to register the rental. However, if you are offering more than one holiday home for rent, you must register these properties. But please note that the law is set to change this year and the new rules will require all holiday rentals to be registered.
- Andalucía
The enforcement on holiday rental law in this region is still pending, but some districts are already issuing fines.
It is believed that the local government is close to approving a new law, so you should keep on top of the latest changes if you plan to buy a property in Andalucía and rent it out.
- Catalonia
Law was implemented in Catalonia in 2012, requiring all holiday lets to be licensed. However, there are tens of thousands of properties still not licensed and property owners are facing fines.
To add to the confusion of property regulations in Spain, rules are often subject to change, so you must carefully check the legislation in the area you are buying in.
The risks of non-compliance
If you do not comply with these local regulations, you could be fined a hefty penalty – fines amounting to €537,771 have been recorded. There have been 284 cases against property owners and agents since the law was changed, with fines between €3,000-€24,000.
However, it’s not just owners and agents being penalized. The Catalan government recently issued a €30,000 fine to Airbnb for a breach of local laws – the website published details of rental properties that had not been registered with the Tourism Registry of Catalonia. The government has threatened to ban Airbnb from operating in the region.
The costs
As with how you will be regulated, the costs of licenses vary from region to region. Some areas operate on a set fee basis, with charges generally between €177-€500. Other areas, like the Balearic Islands, calculate the cost per guest.
In all regions, the license fee is a one-off cost, which you should factor into your budget if you are planning to rent your holiday home out.
Protect yourself
As well as good holiday home insurance, you will also need public liability and specific rental insurance for your holiday let. In addition, you must declare any earnings to the Spanish tax agency, as well as to HMRC if you are a UK resident.
