Holiday homes targeted in new Spanish property law change

LAST UPDATED: 26 Jan, 2014 @ 10:39
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Holiday homes targeted in new Spanish property law change

BRITONS with holiday homes in Spain and France could be prevented from renting them out to tourists under controversial new laws.

The latest rules – which are still in the planning stage – could also add hundreds of euros to the cost of breaks for millions of visitors from Britain.

Experts say families would be the hardest hit as they would no longer be able to pay cheaper rates direct to owners – but would have to stay in apartments, villas or hotels operated by major firms.

The Spanish authorities are expected to ban unlicensed rentals next spring.

Ryan Levitt, of holiday rental website housetrip.com, warned: “This law is closing the door to working and middle-class families who want to book a break to Spain at an affordable price.

‘“Instead of being able to share a whole house with friends, you face being stuck with your kids in a cramped hotel room.”

More than a million properties in Spain are owned by Britons. Many are inhabited all year round by expatriates, but hundreds of thousands were bought as holiday homes.

Until recently, it has been relatively simple for British owners to rent out their properties in the two countries.

But under the new rules, those with second homes in Spain will need a licence from the local council, which could incur a fee.

They will also have to meet strict conditions, such as being contactable 24 hours a day to deal with problems such as water leaks or power blackouts.

Owners will have to pass regular safety inspections and obtain hygiene certificates. Failure to comply will lead to hefty fines.

According to La Caixa bank, around three-quarters of overnight stays in Spain last year were in ‘unregulated premises’ such as privately-owned villas or apartments.

Most of these visitors booked directly through the high number of online holiday rental firms which have sprung up over the past decade.

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16 COMMENTS

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  1. Whilst it is true that Berlin has recently cracked down on holiday rentals there is no suggestion of the same thing happening in mainland Spain. It is simply a case of the Government seeking regulation and recouping millions in unpaid taxes.

    The Spanish authorities have been in talks about regulating rentals for the last couple of years however as you point out, the industry is worth far too much to the tourist trade to simply make sweeping bans across the board.

    We’ve had scores of home owners contact us at NeedMoreRentals following these recent articles but there has been absolutely no official line about hygiene certification, licence fees or fines. It is pure speculation.

    In terms of owner contact, all absentee rental owners should be accessible by phone or email at any time of day anyway with a local maintenance person to attend any emergencies. This is standard duty of care to ones guest.

    It is on-going however as long as taxes are declared there is no need for owners or managers to panic. Regulation is a normal process and as the industry continues to grow every year this should be accepted by all and not lead to panic.

  2. The London Borough of Newham introduced a Landlord Licensing Scheme last year and we feared the worst thinking it would be difficult and draconian but in fact it was very easy. IF the authorities in Spain set up a similar system it will be very straightforward but they have to make sure they get it right and don’t make it unviable which will put people out of business.

    Newham Council introduced the licensing scheme to (quite rightly) root out rogue landlords who do not maintain their properties, eradicate overcrowding, make sure landlords deal with anti social behaviour problems with tenants and also to stop tax evasion. Basically, it costs £450 for a 5 year licence, the application form is very easy to fill in online (it can be found on their website) and there is a telephone helpline. They ask for the landlord’s home address, a 24 hour contact number for emergencies (this can be the landlord or managing agent), a description of the property layout, list of appliances and room sizes. They then provide a certificate which states the maximum number of people allowed to live at the property together with emergency contact details and this has to be left at the property before the tenants move in.

    The Council will be carrying out random checks to make sure there are smoke alarms, gas safety certificates and the property is being maintained. They also pass on the landlord’s details to HMRC. Obviously all governments want to make sure people are paying their taxes.

    Newham do not set rent caps and they do not force people to spend endless money on things like extra fire doors etc. There is a very large fine if landlords fail to apply for a licence.

    So far, it seems to be working OK and other Boroughs are thinking of following suit. The Spanish authorities could do a lot worse than contact Sir Robin Wales, Mayor of Newham, and get some advice as to how to set a workable and user friendly system that does not alienate people.

    IF, and only IF the Spanish authorities adopt the same system, holiday home owners have nothing to fear but if they start placing unreasonable restrictions on them and start charging them large sums of money, it will be a complete nightmare and it will also put people off buying holiday homes in Spain. Spain, please get it right!!

  3. You shouldn’t have said anything Susan. Now they know how to make a complete b******s of it. There are more brown envelopes available to the hotel lobby than to the owners of holiday lets.

  4. Seems entirely reasonable to me. I would want to be sure that my holiday let is safe, properly maintained, hygienic and that my landlord is actually contactable. If all the lets are subject to the same regulation, the usual competitive forces should ensure that the price of the lets doesn’t spin out of control.

    Would be interested to hear, however, if an how this law will affect the regulation of a casa rural (B&B)…

  5. Not just Brits!
    ITs common knowledge down my end (nr cadiz) that its the hotels pushing for regulation. And quite frankly i dont blame them. Id say three quarters of the rural homes around here are let out over the summer for VAST amounts of money – all undeclared. (still a cheap self catering holiday, especially if theres a group).

  6. I see no problem with these proposals as it would ensure that rental properties are adequately maintained, safe and of an acceptable standard. My only concern would be whether those responsible for regulation at a local level (i.e. the Ayuntamiento) interpret the regulations uniformly and do not impose unacceptable costs for inspections and licences

  7. Dear all, I am afraid it actually isn’t speculation. Until May 2013, there were no laws affecting holiday rentals on the national law books. The lawmakers in Madrid passed the decisions down to the regions – and the requirements differed wildly. In Catalunya, it’s a rather straightforward process of registration and tax payment. In the Canarias, Balearics and Andalucia it is much more complex, largely due to heavy involvement by the hotel lobbying groups.
    The national government decided that a new ‘national’ law needed to be established that the regions could opt in or out of. And so they formed a task force of four regions – Andalucia, Canarias, Rioja and Aragon. The most popular regions for tourists (Andlucia and Canarias) fought hard for greater restrictions while the other regions, which rely heavily on Agroturismo, argued for a more flexible arrangement. The end result is that they are now no longer speaking and the legal decision will revert back to the national government in May 2014.
    The reason behind these legal changes is not on standardisation or safety. So those who are saying that it’s a good thing for these laws to be introduced aren’t actually reading into the text which has nothing to do with tourism standards. It’s all about taxation and payment of tax. At HouseTrip (the company I work for), we agree that there should be a level playing field between hotels and individuals. But we believe the system should be clear and easy to understand. At present, many people don’t pay – not because they don’t want to – but because they don’t understand the myriad complexities of laws established in their region.

    If the Spanish government gets it right, then the new law could be positive in that it will make registration and taxation much easier for all to handle. If, however, they heed the hotel lobbyists and the regional governments that are fighting with them, then we are looking at much more complex requirements. Take a look at the Canarias and their requirements for a licence (which they have not issued any of since – I believe – 2002/3) and you’ll see what that future brings. In the Canaries, they are specifically targetting foreign owners with large fines when they don’t meet the complex requirements that have been set. The government hasn’t succeeded in making their law stick in the courts – yet – but if they get their way, then the fines will be established.

  8. I should also add that while the site doesn’t mention it, they do refer to France. A law is being voted on as we speak to severely restrict rentals in all French cities with a population of 200,000 or more. We have, however, been informed that all cities will opt out of the law with the exception of Paris. So the French capital may soon be a no go area for potential second home investors.

  9. Hi Ryan.

    Thanks for your input.

    I’m very interested to know when and where there has been an official line on these pending expensive licence fees, fines, hygiene certificates, inspections etc?

    Whilst it is a concern that hotel lobby groups are having such a massive influence, I personally think it is a bit irresponsible to suggest that the government is now ‘closing the door’ to holiday rental bookings without knowing the facts beforehand. Predictions can’t be made on what has happened elsewhere. Until a decision is made it surely IS just speculation?

    I visited 2 local Ayuntaniemtos in Andalucia in the new year and neither were expecting major change this year, let alone warning of tightening restrictions.

  10. Holiday makers don’t want to stay in cities – your referring to the parasitic buy to let brigade not second homers – good.

  11. Hello,
    As I stated above, we have received no notification about any changes in terms of hygiene certification or inspections. The new law is all about licensing and tax collection.

    We are getting all our information at the national level. The working group if four regions is tasked to propose a law that the rest of the regions can opt in or out of accepting. Unfortunately, this working group are now no longer speaking to each other because the pro-regulation regions (canaries and Andalusia) will not accept any arguments by the pro-flexibility regions (Rioja and Aragon).

    When the national government formed the working group, they made a provision that the law would revert back to Madrid if the group couldn’t come to a decision within a year. That time limit hits in May. And we fully expect this to happen.

    This is bad news for home owners because Madrid has very close links with the hotel lobby and the city of Madrid itself is contemplating bans on holiday rentals within city limits.

    HouseTrip have been in close talks with all our competitors and with a national Spanish association representing the Spanish holiday rentals industry as we are concerned by these changes. So once again, this is not speculation. These are predictions based on discussions that we and our competitors have had both at the national and regional level. And on the current way the wind is blowing in Madrid.

    HouseTrip we’re asked to present our views to the working group alongside others but with the demise of the working group, we don’t see that happening anytime soon.

    Ryan

  12. Not quite true Stuart. We have enjoyed many self-catering breaks in cities such as Barcelona, Sevilla, Jerez, Lisbon,Cadiz. This year Valencia will host us. Our hearts would sink if forced into crappy hotels, or onto, God forbid, the Costas. We have no desire to be grilled on a bed of grit.
    It’s understandable that local people may resent the comings and goings of holidaymakers in quiet locales. Having stayed in a variety of Pueblos Blancos such as Orgiva, Olvera, Gaucin etc. we realise it is important to keep a low profile and enjoy these places without making a racket. But of course, some folk are incapable of good behaviour on holiday.
    That said, this move is all about vested interests of the tax-man (fair enough) and hotels, NOT FAIR.

  13. It is a pity that this is unlikely to affect the many properties in Chiclana de la Frontera (nr Cadiz) that are regularly let out with no IBI, etc. having been paid on the properties, and with illegal connections to the electricity supply. Probably these properties are also let without hygiene certificates, inspections, or even insurance. Nice little earner for the property owner but not so good for those who are doing things legally and correctly. Shame that laws, rules and regulations only seem to apply to some, whilst others can ignore them with apparent impunity.

  14. 2 years on from the date of this publication and there is still a way to go. Despite the decree now having been passed, the Junta, Apartsur and English-speaking publications are still saying different things. #farce

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