Landlords – beware of the law or face fines

Follow the rules or face fines
Follow the rules or face fines

Property owners who rent their property out are being warned that they must abide by the law or face the possibility of stiff fines being imposed.

The British Embassy in Spain say they have been made aware of a number of cases in which landlords who failed to declare rental income or have incorrect permits have been fined up to €30,000.

It is thought that up to 70% of rental properties in Spain are not being declared meaning billions in tax revenue is not being collected by the treasury.

The British Embassy has released advice for home owners who are, or are thinking about, renting out their property in Spain.

Short-term lets

The regulations on letting tourist apartments (apartamentos turisticos) and holiday homes (viviendas vacacionales) vary by region. If you are planning on making a financial return by renting out your existing property, or buying one to let, you are recommended to seek independent legal advice and check the local licensing laws with your local town hall (Ayuntamiento).

This is particularly important in Catalonia, the Balearic Islands and Canary Islands where the rental of holiday properties on a short-term basis is strictly regulated. The authorities in these areas are cracking down on homeowners who rent out their properties to tourists (particularly through online adverts) without complying with Spanish law.

If you own or are planning to buy an apartment which is part of a Comunidad de Propietarios (Committees of property owners who are responsible for the management of communal areas of apartment buildings/complexes), you should also check whether there are any rules that prohibit or restrict short-term letting.

Long-term lets

Owners who rent out properties on a long-term basis are generally not required to apply for a special licence. However, it is worth seeking professional advice to make sure that you are complying with Spanish legislation and that you are using the correct rental contract.

There are different types of contracts depending on how long the property is being let for, such as arriendos de vivienda which are for a minimum of five years, and arriendos de temporada which are generally for one year or less.  You can get copies of these contracts from tobacconists (estancos).

Taxes

Owners of properties should also be aware that whether or not you are resident in Spain, you will need to declare rental income to the Spanish tax authorities. Homeowners may wish to seek advice from a professional tax adviser (asesor/gestor).

Managing a property rental

You may want to consider hiring a Spanish letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf.

FAQs on letting property in Spain (in Spanish) from the Sociedad Pública de Alquiler (Public Rental Society) 

Further information can be found on the UK In Spain website.

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