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Property-buyers in Spain planning to make money from holiday lets could be forgiven for feeling confused about how to stay within the law, and not without good reason!
Since 2013, the task of regulating short-term holiday rentals has fallen to each of Spain’s 17 regional governments. This came about after the Spanish central government decided to exclude this sector of the rental market from its national Spanish Tenancy Act, or LAU (Ley Arrendamientos Urbano), preferring to devolve it to the regions.

The regional governments, some of which already had a level of regulation in place before 2013, were given guidelines by Madrid and over the years most have adopted some core rules, such as homeowners needing to obtain a rental licence. Inevitably though, today there are not only regional differences in the way short-term lets are controlled, but also between provinces, town halls and cities within the same region. Even individual complexes and urbanisations have their own rules, which will be set by the community of owners, so always check these before buying somewhere. In other words, what goes in the Costa Blanca won’t necessarily go in the Costa del Sol, and rules for the city of Valencia will be different to the rest of the Valencian Community.

At the same time, other factors can trigger changes to local rental regulation, such as pressure from large tourism bodies, local politics and how saturated an area is with holiday accommodation – keeping up with things isn’t easy without speaking to local experts.

Getting your licence

Typical of most regions now is the need to register and have your property licensed for holiday lets. As a rule, homeowners should start by gaining permission from their town hall or declaring their intention to do so with the authorities. The next step is to register their property and obtain a unique registration number – which is done through returning a completed form to the local tourism office or post office, often followed by an inspection (depending on the region). You’ll need relevant documentation, including ID and your property’s occupancy licence.

Each rental property should also be rated as either superior, first or standard, depending on the size/ level of comfort and facilities. There are minimum size requirements for some rooms, and specified health and safety standards will need to be met too. Both the rating and registration number should be included in any advertisements or marketing, and on display in your property. Other – but not all – requirements include the owners having to log details of all paying guests with the local police.

Beware, advertising and renting out your Spanish property illegally and without the appropriate licence can result in hefty financial penalties. Similarly, income generated from rentals should be declared to the Spanish tax office and all necessary taxes paid.

Rentals in cities

In Spanish cities that have become especially popular with tourists and foreign homeowners, short-term rentals have become highly regulated in recent years. Fuelled by Airbnb, a boom in demand for holiday accommodation has in many cases been detrimental to domestic residential markets, typically leading to shortages of affordable housing for locals.

Since mid-2018, short-term tourist rentals have been banned in apartments, or ‘multi-family residential housing’, in Palma. Across wider Mallorca and the Balearics, holiday rentals have always been more controlled than other mainland regions, with the island using zoning and exclusion zones, and the government capping the number of tourist beds available. Controls in the city of Valencia include keeping short-term rentals on different floors to residential properties and limiting them to less than 50 per cent of a block or housing unit. In some neighbourhoods, there is a moratorium permitting any short-term rentals.
While in Barcelona, where the Airbnb effect has been greatest such that it is said to have the highest density of tourist apartments in Europe, there has been a heavy crack down on unlicensed holiday lets. The Catalan capital’s town hall is now using zoning to control the rental licences in the more central neighbourhoods, where some are subject to a freeze on new licences.

A key takeaway for buyers intending to rent short-term to holidaymakers is to be prepared to obtain a tourist rental licence and always observe local regulation, right down to the rules of your chosen community. Using a lawyer will help you to tick all the right boxes and keep within the law.

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