Campbell Ferguson (OP Columnist)
IF you bought to let a Spanish property to offset bills and mortgage fees and you don’t have an extra spare centimo to spend on it, think again.
Andalucía has just confirmed its residential property rental licensing scheme, bringing it into line with the majority of other tourist areas throughout Spain.
And safe to say, whether you get a license or whether you don’t, it will cost you.
As far back as 2011, Barcelona started controlling the rentals of private residential property.
This has gradually spread to all the Costas, with the active backing of the hotel industry which saw private apartment and villa lets as an increasing threat to their occupancy rates.
According to a recent study by HostelTur, private lettings in 2015 accounted for approximately 25% of total short-term rentals in Spain, or more than 7.4 million tourists – an increase of 17% on 2014.
From a health and safety angle, the regulation of sometimes shockingly bad accommodation is a good thing. Provision of fire, smoke and carbon monoxide detectors is good.
But some of the new requirements are crazy, such as stipulating that all bedrooms and lounges must have permanently installed heating/air conditioning.
Apart from the financial outlay, air conditioning is not required in many locations (I’ve lived here for 15 years and neither of my homes had it).
As for heating, why can’t freestanding plug-in heaters be acceptable? Many tourists come from colder climates anyway, and at times when we thin-blooded residents feel the chill, they are still wandering around in shorts and T-shirts!
And many visitors don’t want a hotel holiday for a variety of reasons, cost being one.
Returning to Barcelona, there were so many licences being granted that pressure was brought to bear and they eventually stopped granting them.
Now, those that do have licences are selling at a premium, skewing the property market.
Also, the owners of licenced apartments know there is reduced competition and have increased rental prices to tourists substantially.
Was that the purpose of the legislation?
More troublingly, in the Canaries where there has also been a freeze on licences, the law appears to have stated that only owners of multiple properties can let to short-term tourists.
As a result, individuals with a single property in a building where there are one or more multiple property owners have been held to ransom and forced to sell their own property at reduced cost.
Of course, demanding a licence and then stopping the ability to obtain one is a poorly disguised method of directing traffic towards hotels.
Draconian fines, starting at €1,500, mean that owners and managing agents will not take the risk and multi-listings websites will disappear.
Already, the Valencian tourist authority has started action against eight rental portals.
The hotels will raise their prices, as will private owners with licences and eventually, as we’ve seen before, the bubble will burst and tourists will decide it’s too expensive to come to Spain.
Meanwhile, properties that have licences or are suited to obtaining one will have a higher value than those that do not.
So, even if you don’t intend to rent out the property, it’s probably as well to obtain a licence.
For the environment, all this additional hot/cold air conditioning will increase energy consumption and reduce the energy rating of the property.
Overall, I can see it making property ownership in the area more expensive and slowing down the market just as it was beginning to lift again.
Why is it that the phrase ‘killing the goose that lays the golden eggs’ is so often applied to bureaucrats and business people in Spain?
Unfortunately, selfish greed must be part of the answer.
Just do what the Spanish do, ignore the law completely. Cash in hand, no issue.
Agreed Fred. But the success of private holiday rentals is based on the ubiquity of listing sites, Homeaway, Airbnb, etc. If those sites become largely redundant for Spain due to these vicious regulations, it will be difficult/impossible to have people know that your property is for let, but at the same time, off the radar. Owners will become reliant on repeat business from clients who stay in touch and want to return. Fresh bookings will dry up and an economical holiday model will gradually shrivel and virtually disappear.
Just as the hotel mafia planned.
I just can’t see Spanish officials trawling through millions of website listings, but agreed, advertising will be risky if your property is non-compliant. Less people will holiday in Spain, that’s for sure.
They have a softare for this purpose!
So THAT will not be a major problem for them!
Ulf, even such “crawling” software is still a brute force approach. It can gather adverts en masse but it will still need a human to analyse and verify it. Luckily, as my Spanish neighbour was telling me last week, her paper rental contacts book is bulging with repeat customers – happy times for those who use good old fashioned paper and have repeat custom.
So the writer does’nt need air conditioning – interesting, just where does he live, he does’nt say.
We lived in Guadix and not having air conditioning meant that only 2 hours sleep was possible from May to end of September. The streets were full of children until 1AM, simply because they could’nt sleep in the intolerable heat of their badly built homes and apartments.
Winter – with a Spanish built apartment block, freezing cold and most Spanish bought ‘mantas’ to put over their legs to keep warm, why, because the c/heating pipes were just buried in the concrete flooring. I made the mistake, just the once in leaving the c/heating on all night, I never did it again as the boiler never stopped firing up.
So I think that having a/c in every bedroom is a good idea. So where Mr Ferguson do you live that you don’t need a/c or heating. If you have a properly designed home built of the right material then maybe not – let us know.
I lived in tropical West Africa for 4 years without air-conditioning. I now live in Cádiz without it. It’s not so difficult.
The only thing that is certain is that the Junta de Andalucia will get it wrong. The new legislation will no doubt be too draconian, anti small business and heavily taxed. Yet more government meddling that Spain needs like a hole in the head.
It is possible to live in extremely hot areas in the summer without air condidioning. We built our house in inland Andalucia 16 years ago. It has double thickness walls with air cavity and insulating foam. Windows all double glazed and the roof properly insulated. All bedrooms have ceiling fans and windows and doors have mosquito nets so all open at night. Can be done, but I agree most properties are not like this.
These new rules are unbelievable and sadly so typical of how Spain operates and messes things up and with the Junta de Andalucia operating in these parts, you just know it will be a disaster.
Being, like so many others, short of some reddies, I was just about to convert my son’s end of the house into a small rental apartment. But, hah, just in time, I remembered that here it must all go to the large and well-connected players. All (even in ‘socialist’ Andalucía). So, no repairs and, look, my son is welcome home again.
A friend of ours has just received a badly written mailshot from her lawyer who is trying to tout for some business on the back of the new legislation. I don’t know if this is a diktat from national government or whether the Junta de Andalucia have gold plated the more draconian legislation.
It starts off looking fairly reasonable and then came this part:
“A contract document must be signed by all parties, showing the details of the property, the owner, the number of days of occupancy and the cost of the accommodation, as well as the ID of the people with a copy of their passports or ID cards. It will be a simple document of just 1 or 2 pages that the owner must keep on file for a period of 1 year.
Likewise, the owner must notify the Guardia Civil of the occupation of the property with each new client. The owner must provide a copy of the signed contract and the passports/ID cards of the guests.”
In other words stupid, unworkable bureaucracy that will put most ‘small’ people out of business. Assuming most owners are like our friend and based in the UK/Northern Europe, they will already have to pay for cleaners, keyholders and a gestor to do their non-resident tax return (my friends does her own online) and now they will have to employ someone to set up the licence (this lawyer will happily do it for a large fee) and faff about with the endless ongoing paperwork/rental contracts and copies of passports.
Basically, this is anti business and designed to stop people renting out their properties – estate agents will have to change their “good rental income” sales pitch because nobody in their right mind would want to get involved with that lot. My friend’s apartment is of a very high standard and actually complies with the physical parts of the new legislation but the extra paperwork is the tipping point for her. She is going to sell her apartment at a loss, due to the state of the market, so if anyone reading this thinks buying an apartment in Spain is a good investment, think again.
This is going to be unviable for the vast majority of people and from what I can see, the only upside of the whole thing is the end of the horrid 1950s style gas fires on wheels. My friend will now have to tell all her guests who have been staying at her apartment for years that they will have to find somewhere else to go on holiday. Will they stay in a hotel instead? Will they hell, no UK TV for a start and far too inflexible.
Do as my Spanish neighbours do. Cash in hand, no records, word of mouth, no need to comply or worry about daft Spanish laws. How can the authorities prove a rental in such a scenario?
Back to basics, eh Fred? Love the implied anarchy, but, a bit Luddite, no? A grand, self-sustaining business was growing in leaps and bounds due to internet activity promoting the possibility of an alternative to the dreary hotel model. And then, wha’appen? (as the young folk say) the dinosaurs won again with the aid of a compliant administration.
It is a bit luddite, but it’s what the Spanish have pretty much always done. The idea of registering rental properties is not a bad thing in concept, but Spain takes the issue to its normal draconian levels. They always take a sledgehammer to crack a nut, there’s never a middle ground.
BUT…how eill the tenants find your property?
Well via an add on the Internet!
Ulf, people were renting before the Internet came along. Back to adverts in windows and cars lol.
Jane G,
a great post full of actual content, instead of the usual uninformed opinions. This is a blatant show of bullying designed to stop foreigners or Spanish from renting out their homes and is manifestly the diktat of the hotelliers – hey arseholes in Brussels what are you going to do about it – silence – as usual.
And are’nt Spanish hotels wonderful – zero privacy due to the construction, just what people – do not want.
Jane G if there is a Brexit and Spain starts to suffer and it will, just how will the Spanish or come to that the French react. I had a very nasty experience with two Gendarmes a couple of weeks ago after one of my dogs was attacked by two Dobermans owned by a French farmer. Totally biased and chauvanistic, reminded me of what happened twice to me in Spain, once in Galicia and once in Andalucia.
I’m thinking, if they are like this now, what will happen when the Ponzi scheme that is France collapses – the Brits will be ready made scapegoats.
I feel sorry for those foreigners (not only Brits) who have made investments which they cannot realise and walk away from in Spain.
It was’nt luck on my part but knowledge about how crap Spanish building is that we were able to walk away in 2009, because I refused to get involved in any way with a Spanish built property and the School of Architects would never have agreed my designs. Here in France. I was looking to buy a plot and have a house built, a bad back means I would have had to employ others to build it. Employ French – you have to be joking, if they turn out to be chancers, I can’t just sack them, it would have to go to a tribunal.
So it turns out that we are now lucky once again, if there is a Brexit we will be able to tell if there is a backlash against Brits living in France. This backlash if it comes will not necessarily be from the ordinary French but from the French system – I am not optimistic.
For all the sensible ones who never sold their homes in the UK but rented them out and rented in Spain they are on a winner and like us can walk away. I do however feel for those who acted in good faith and who have been bullied, intimidated and in some cases lost their homes with absolutely no assistance or real support from either the Nasties or the Pink Tories.
That sadly is one thing that Brits can be certain of – they are on their own, their government will do nothing to help them, just take their taxes.
What was it the colonists said – no taxation without representation – take it from there.
I think it is a good idea. Airbnb is ruining residential areas. Tourists are partying to all hours disrupting the peace of residents who never chose to live in tourist centres. And those who are planning on avoiding the obligations and evading tax would like the benefits of Spanish public expenditure without contributing their fair share to it.
The bigger issue surrounding this short term holiday rental frenzy is the effect on the local population and their ability to find decent housing long term. While wealthy international people buy their second home to use only a few weeks a year and perhaps rent out during summer season makes the locals see a struggle in finding a home to live in. The biggest problems are the illusion of price set on those who do offer long term that seem more based on what the tourist can pay and not on what average joe living on a spanish salary can pay. Then you have the major problem of most only offering long term between the low season months and then kicking the tenent out in order to cash in on high season. This is not sustainable but yet of course the government for the people doesnt seem to care at all that families are living on top of eachother or homeless..