Unlicenced Buy to Let

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This topic contains 17 replies, has 7 voices, and was last updated by Profile photo of Anonymous Anonymous 9 years, 5 months ago.

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  • #52883
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    Anonymous
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    There was an interesting albeit disturbing news item on Spanish property in Saturday’s Daily Telegraph Property section. It referred to a crackdown by Spanish tourism and tax authorities over unlicenced apartments and villas let to holidaymakers. Apparently the vast majority of properties are being let illegally without authorisation and some owners have been charged very large fines. Worse still the article stated that even if official permission is sought for holiday rentals it is rarely given. The laws are apparently particularly tough in the Costas and Majorca. This invariably will add woe to property owners facing reducing values and make Spain less attractive for buy to let investors.

    Whether the law affects private rentals to friends and family as well as those publically advertised the article does not state. Whatever is the case the law seems somewhat draconian given that owners will not be seeking to market their properties as officially checked and endorsed by Spanish tourism agencies. Apologies if this thread has been raised previously and for the bad news. Perhaps others have more information on this subject.

  • #72052
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    Anonymous
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    Yes Mike, I also saw the article.

    http://www.telegraph.co.uk/property/main.jhtml?xml=/property/2007/05/12/pcosta112.xml

    I knew about this law with regard to Majorca, but it is the first time I have seen any reference to main land Spain.

    The article seems to refer specifically to ‘Holiday Letting’.

    David

  • #72069
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    Anonymous
    Participant

    I have just seen mike started a recent thread “It never rains til it pours” and lots of replies have been posted there. So I suggest anyone reading this should refer to that thread instead and post there.

  • #72070
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    Anonymous
    Participant

    😆 Don’t be too disappointed folks ❗

  • #72093
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    Anonymous
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    It is strange that most people I have spoken to, including owners who have been renting their properties for years, have never heard of the law requiring rental properties to be licensed.

    I have dealt with rental agencies, as an owner, but no one has ever mentioned it.

    I would be interested to learn, from the more knowledgeable members of this forum, a little more information.

    a/ does this law apply in ‘Mainland’ Spain as well as Majorca? If so, is it simply that the authorities on the mainland have been less active in enforcing it?

    b/ does the law apply to ‘Long Term’ rentals or only ‘Tourist’ rentals?

    David

  • #72094
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    Anonymous
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    This subject is something that has come much to the fore in the Canaries over the last 3 or 4 years and to the extent that at one time, airport passengers were being stopped and asked where they were staying, by inspectors, so checks could be made.

    It is claimed that the hoteliers and complex operators were pushing hard for the law to be enforced, due to the loss of trade to the letting of privately owned properties.

    The “friends and families” being allowed has grown and grown, where againg, there are reports of holidaymakers being questioned.
    I have also read that in residential areas, residents have also made the paying visitors to be made unwelcomed and uncomfortable.

    “I have dealt with rental agencies, as an owner, but no one has ever mentioned it. “
    In the Canaries, often, agents if asked, will just say it is let to friends or family.

    I would be interested to learn, from the more knowledgeable members of this forum, a little more information.

    “does the law apply to ‘Long Term’ rentals or only ‘Tourist’ rentals?”
    I believe it only relates to vacation rentals, which I think is up to 3 months.

  • #72103
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    Anonymous
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    MG

    Thank you very much MG for the information

    David

  • #72207
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    Anonymous
    Participant

    Hi all

    As Spain`s largest holiday home and rental management company here is our response to the article.

    Yet again another untruthfull and confusing article to deceive people from investing our area. Was it not enough that courts were publishing corruption in the Town Halls?.
    The article is both unaccurate and lie. There are only one kind of properties that need to be licensed to go on touristic renting market, and those are the ones that have been developed as special flat hotels, or aparthotels, and the also known as Touristic Apartments complexes.
    The difference between them is vague. The Flathotel, is built by the developer just to be operated as an hotel. The difference between this and a normal Hotel is that every room must have a cooking facility within. The ownership of the building belongs to just one company, and the Hotel can be run either by that same company, or by a Hotel chain (i.e: Marriot, Holiday Inn, etc). The touristic apartments are run pretty much the same way, but the ownership of every apartment is by an investor (this could be either a company or an individual). A good example of this is the complexes run by the French company P&V, or more locally the Don Juan Beach Resort in Manilva, where we have 11 clients that have purchased.

    These complexes are subject to the touristic laws and must be licensed as touristic resorts before they start operating, and it is true that some of them do not have such licenses.
    The rest of properties, plain apartments, town houses and villas, are all free to be rented, and do not require any licenses for their renting. Such license would be such a limitation of the ownership rights, that the law that enforced the licenses would be declared anticonstitutional by our highest court.

    The tax subject is different. Every income that a resident or a non resident receives from the letting of his property, must be both declared to the Spanish tax authorities and paid 24% Non residents income tax. Every renting should be through a renting contract that must be written, even if just for one day, and the tenants cannot be liable for the cost of the supplies. Apart from those limitations, there are no more restrictions than those of the tenancy law.

    It could happen that a community of owners did approve in their EGM that properties could not be rented, but such decision could be contested before the court as it does suppose such a limitation to the ownership right.

    If any of the persons that say to be affected in that article, is true, most probably their fines come from the tax authorities, either in Spain or the UK, as the incomes generated by the renting must be declared to both, and would affect the income tax of the owners in both countries.

  • #72217
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    Anonymous
    Participant

    How irresponsible of the newspaper. But than sensationilsm sells papers!!!!!!!!!!!!!!

  • #72227
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    Anonymous
    Participant

    Mmmmmm, is that an impartial opinion?

  • #72285
    Profile photo of Anonymous
    Anonymous
    Participant

    No, just correct. Why do these forums always become conjested with sarcasm, maybe thats why I do not bother to contribute most of the time.

  • #72288
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    Anonymous
    Participant

    “As Spain`s largest holiday home and rental management company here is our response to the article”
    “Lee Jones
    C.E.O OPI Group”

    Completely unbiased opinion then?

  • #72290
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    Anonymous
    Participant

    So, if someone is an expert in their field, be it any business type and have valued comments form experience and expertise it is viewed as Biased ?
    I deliver seminars throughout Europe to Developers and Sales organisations on the rental marketplace and thus feel I am in a position to speak. Don´t you feel the public want to know both sides of the story ?

    Please respond if you wish but I will not be involved in anymore wasteful discussion.

  • #72291
    Profile photo of Anonymous
    Anonymous
    Participant

    An unbiased opinion from a self appointed expert.
    That settles that then…

  • #72294
    Profile photo of Anonymous
    Anonymous
    Participant

    You say you deliver seminars throughout Europe to Developers and Sales organisationson the rental marketplace. Can we assume that as a rental agency, your seminars are biased in favour of the renter and not the Developer or Sales team?
    I do find this strange!!!

    An expert is someone who can vouch in a Court on something, and experience is not normally accepted without the relevant qualification. Can we assume that you are qualified in the financial or property sector?

    You quote various points regarding what is legal are not, so in your opinion, an apartment in a residencial development, would it be leagal to rent out for holidaymakers for say 2 weeks?

    I most certainly do feel that the public need to hear both sides of the story, which is why I make comments and ask the questions as I have done above.

    I would appreciate your “expert” response.

  • #72296
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    Anonymous
    Participant

    This is exactly what forums are not for, my parting comment is that we work for the interests of the owners, not the agents. Our training shows how to explain the benefits of management and rental returns without strtching the truth. I am asked by various newspapers and magazines for my “comment” from my experience which I gladly do. If you don´t want people such as me not to get invloved in offering advice from our experience then you are going the right way about it. If other members are happy with me to comment on further tags then I will do so.

  • #72297
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    Anonymous
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    But you make a comment such as “There are only one kind of properties that need to be licensed to go on touristic renting market, and those are the ones that have been developed as special flat hotels, or aparthotels, and the also known as Touristic Apartments complexes.”, So, if an apartment in a residencial development, would it be leagal to rent out for holidaymakers for say 2 weeks?
    You also say “that we work for the interests of the owners, not the agents”. Isn’t there a conflict as you operate a renting agency, where the customer who is paying you should come first?

  • #73171
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    Anonymous
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    I found this interesting article today on the subject of letting Spanish property.

    http://www.citywire.co.uk/News/NewsArticlePrint.aspx?VersionID=92760

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