Following the introduction of new regulations for short-term rental properties, the government are now employing new tactics to find and punish those who do not declare their rental income.
Up to 50,000 property owners could be in line for sanctions if they are found to be renting out their property for short-term (holiday) rentals without telling the authorities or declaring any income they receive from it.
The government have set up a special division to track down the undeclared properties by trawling internet property portals. They are also said to be monitoring electricity usage to ascertain if the property is inhabited.
The Treasury workers’ union, Gestha, estimates the total amount of undeclared taxes to be in the region of 100 million Euros, which is why they are keen to put a stop to it.
However, it’s not only a tax issue. Many in the hotel industry state that it is unfair competition as they have to comply with a raft of regulations, including health and safety issues, which undeclared rental properties do not. Black-market rentals are thought to occupy up to 30% of the total properties for rent on the Costa del Sol.
Fines of up to 25% of the rental income will be levied, being based on the size of the property and the rental costs requested by the owner. The fines can also be backdated so don’t think that owning up now to years of undeclared rentals will get you off the hook. You must prove when you began renting your property and pay the fine based on the length of time you have failed to declare the income. A little heavy handed, but necessary to bring the market under control.
There are differing opinions from industry insiders with some saying the regulations will improve the sector in both quality and safety. Opposing opinions suggest many owners will simply stop renting out their property for short-term rentals and the market will be strangled leaving a shortage of holiday accommodation.
According to data released by property portal, Idealista, the cost of rental property increased by 4.3% across Spain during the first quarter ending March at 7.4 Euros per square metre, per month. Comparing on the annual rate the increase is 5.2%.
The rental market appears to be recovering more strongly than the sales market. Head of research at Idealista, Fernando Encinar, said “with the report data in hand it is clear that there is a huge demand for rental housing, and that supply is rising strongly.”
The recovery in rentals has to take into account the large amount of rental property available to the market. Excessive construction, leading up to the crisis, means there is a large stock of good quality housing resulting in a large and varied choice for tenants.
Encinar explained “Given that the construction during the years of the housing bubble left a large housing stock of good quality properties, the rise of rents can be a boost for many owners and a good choice for small and medium savers who want to seize the moment to invest in housing.
“With rates at zero and banks giving historically low yields many small investors are seeing good returns by buying homes and placing them on the rental market.”
Rentals by Community
All communities recorded an increase in rental costs during the first quarter, except for Euskadi where prices fell by 4%.
The largest increase was recorded in the Balearic Islands where rental prices have increased 11.2% to 10 Euros per square metre, since the start of the year. The closet “runners-up” were Madrid where prices increased 5.2%, Valencia which saw a 5% increase, and Catalonia where the cost of renting has increased by 4.7%.
Madrid remains as the most expensive location to rent a property. In the capital you should expect to pay 11.5 Euros per m². Catalonia follows as the second most expensive with prices of 11 Euros per square metre.
Andalucia saw prices increase 2.5% on the quarterly basis. The region shows an annual increase of 4%, remaining popular and closely matched to the average for Spain. The price of property for rent in Marbella increased 8% on the annual rate, showing a quarterly increase of 4.7%.
The Costa del Sol showed rental price increases in most areas with Estepona leading the way with a 27% annual increase. Prices in Malaga increased by 15.5%, followed by Fuengirola where rental prices increased 15.1% on the interannual rate.
Results by Province
Increases in rental costs were recorded in 38 of the country’s provinces with the largest increase registered in the Balearic Islands. Valencia saw prices increase by 6.7%, while prices in Madrid increased 5.2%. The largest decline in rental prices through Q1 was recorded in Tarragona where prices fell 8.6%.
When ranking the provinces in order of the most expensive, Barcelona leads with a price per square metre, per month, of 12.6 Euros. Madrid comes in second with 11.5 Euros per square metre p/month.
Following yet another record breaking year for Spanish tourism, 2016 is likely to see even more tourists hitting the beaches.
In 2015 the wonders of Spain attracted a massive 54.4 million tourists to its shores. In September alone over 7 million visitors arrived, making it Spain’s busiest September on record.
Once again, the UK was the leading source sending over 12.5 million visitors our way between January and September, followed by France (9,183,150) and Germany (8,270,276) tourists.
Of course, with tourists comes spending and in 2015 this was another record figure. The totalexpenditure bynon-resident tourists throughout 2015 stood at a massive 67,385 million Euros, representing a 6.8% increase over 2014. Most of that money came from British tourists. According to INE, those Brits everyone criticises spent a huge 14,057 million Euros in 2015. So I’m sure Spain can forgive a few unruly stag parties, unless they want to give up the largest part of their profits! This is a 10.3% increase over 2014 and this year is expected to host more visitors so who knows what figure I’ll be reporting this time next year.
German and French tourists came in second and third place with spending of 9,837 million from the Germans (a decrease of1.9%)and 7,074million Euros from the French (an increaseof 7.9%).
This year has started well with 3.5 million international tourists visiting in January, representing an 11.2% increase on the same period in 2015. Following terrorist attacks and changes to Foreign Office travel advice, tourists are ignoring the usual haunts like Turkey, Tunisia and Egypt, instead opting for the “safer” Spain and Portugal. Hoteliers are recording massive increases in bookings for summer holidays and are urging people to book early to avoid disappointment.
Travel group ABTA have also noticed the increase in demand with Mark Tanzer, ABTA Chief Executive saying “The significant increase in summer holiday bookings to western Mediterranean destinations is also being mirrored in other Northern European markets. So it makes it more important than ever that customers book early to obtain the best value and ensure they get the holiday of their choice.”
Travel expert Bob Atkinson said Spain was currently the most searched destination on holiday comparison site TravelSupermarket.com.
Following January’s bomb blast in a busy tourist spot which resulted in ten deaths, Turkey has reported a 50% decrease in reservations.
Mark Warner Travel have cancelled their Turkish holiday programme in its entirety for 2016 stating “We have enjoyed a long and happy history of offering holidays to Turkey and hope to return in the future.”
Meanwhile, Turkish holiday specialists Elixir Holidays have announced they are struggling to compete and are facing administration.
Thomas Cook have also announced that 400,000 seats destined for Turkey have now been allocated to Spain. Thompson Holidays have also increased Spanish options to cope with the massive demand.
Budget airline Monarch, have made changes to their schedule diverting their eight weekly flights to Sharm-el-Sheikh to Spain following the ban on UK airlines flying to the resort which saw 38 people murdered in last year’s terror attack.
Property agency Marbella For Sale have seen an increase in enquiries for holiday rentals in Marbella and the playground to the rich and famous, Puerto Banus, with many of their properties already fully booked for the whole summer.
The increase is surely good news for Spanish businesses but not so great for the tourists as the demand has meant an increase in prices. Room rates are rising due to demand as are flights and car rental costs.
So what to do? If you are planning on spending your summer holidays in Spain, then I suggest you start looking into it now. But shop around, there are plenty of websites offering cheap flights and accommodation so check them all. Don’t book the first one you see and make sure you read the small print!
For the last three years, owners of holiday-let apartments have been holding their breath as the Junta de Andalucia attempt to come up with a new decree governing the renting of private apartments to holiday makers.
The decree was finalised and finally published late last week bringing the wait to an end.
Regulation of the industry on the Costa del Sol is lagging behind as other parts of Spain have had rules in place for many years, including Catalonia where the rules came into force in 2014.
Does my property qualify as ‘holiday rental accommodation’?
If you own a private residential property in a residential zone and you regularly offer it for short-term (holiday) rentals for financial reward and you promote it via any recognised tourism channel then yes, this applies to you. Recognised tourism channels include, but are not limited to, travel agencies, third-party tourism promotors, or any channel that includes the option to make a reservation.
If any of the following applies to you then don’t worry, your property is excluded:
Properties that are transferred without payment or financial reward.
If the rental contract lasts for more than two months continuously by the same tenant (long-term rental).
Properties in rural areas. These properties are already covered by article 48 of Law 13/2011 of December 23rd and Decree number 20/2002, dated January 29th, Tourism in Rural Areas and Active Tourism.
Multiple properties (three or more) with the same owner, located in the same building, or in neighbouring buildings, less than 1km from each other. These will be classed as Touristic Apartments and will be subject to Decree 194/2010 of April 20.
Can I rent my property for tourism purposes?
If renting the entire property, the maximum capacity is restricted only by the license of occupation but may not exceed 15 people with a maximum of four people per room.
If renting a single room, the owner must also reside in the property, and the maximum capacity will also be four people per room, with a maximum of six people.
My property qualifies and I do rent it our seasonally. What do I need to do?
This is quite a list so sit comfortably and read on!
An occupational license is required and your property must comply with technical conditions and quality requirements for housing.
The property must be sufficiently equipped and furnished to enable immediate use.
Ventilation, either via direct ventilation or via a patio must be in place as must the ability to provide window shading either by darkened windows, blinds or curtains.
Fitted air-conditioning must be in place in all bedrooms and lounge areas. For rentals from May to September a cooling system must be available. For rentals from October to April a heating system must be available. If your property is listed as of “cultural interest” or building/modification work is prohibited, then your property is exempt from this item.
Properties must contain a fully stocked medical/first aid kit.
Information about local amenities must be made available for tenants. These should include details of local shops, restaurants, parking, medical facilities and public transport, etc.
A complaints/claims book must be made available to tenants.
Properties must be cleaned before check-in and after check out of clients.
Bedding, towels and other household good must be provided, along with spares.
A contact number should be available for tenants to answer questions or resolve issues regarding the rental.
Information/instructions must be provided for all electrical appliances.
Rules and regulations regarding the property and/or the urbanisation must be provided. These include rules regarding smoking, music, pool access etc.
Ok, I’ve got that. How do I register?
As the owner of the property it is your responsibility to ensure your property is in-line with the new requirements and is registered with the authorities.
To do this you must submit a statement to the Ministry for Tourism confirming the property is compliant. Once submitted you can accept clients immediately. The minimum details you are required to submit are:
Property Details: Catastral Number and Maximum capacity (as stated on the license of occupation)
Your details: Whether you are an Individual or a Company, along with contact information.
Once you have registered you will receive a registration number which must be included on all promotional/advertising material.
The registry must then be informed of all rental activity in your property. This includes details of commencement and cessation of rentals.
How do I go about my rental business now?
There is now a long list of things you now have to do to legally handle your rental clients:
All of your clients must be presented with a document, by way of contract, that provides your details, the registration number provided by the Registry of Tourism, the tenants details along with the details of their stay, including the price, and a contact number.
All of your tenants must provide you with identification to enable you to register details of their stay. This brings private rentals in-line with the registry process when staying in any other recognised hotel or similar.
You must agree arrival and departure times with your tenants prior to their arrival. If you do not, the arrival time will be assumed to be 16:00 and departure time will be 12:00.
At the point of check-in, the clients must be provided with keys or access cards to allow them entry to all points of the property/urbanisation. You should also provide details of any rules regarding the community/urbanisation.
Instructions for all the appliances within the property must also be made available.
When advertising your property, it must be priced per night and the price must include utilities (water, electricity, cleaning and bedding). There is no restriction on the number of nights.
Final price, dates etc must be provided in writing before confirmation of any booking. If an advance payment is made, a written receipt must be provided for the tenant.
You may request an advance payment as a deposit up to a maximum of 30% of the total rental cost, unless a different amount is previously agreed with the tenant.
Cancellation
If the tenant cancels the booking within 10 days of the commencement of the rental, then the owner may retain the deposit in full.
If the tenant cancels the booking more than 10 days before the commencement of the rental, then the owner may retain up to 50% of the deposit.
If the owner cancels the booking more than 10 days before the commencement of the rental the tenant must receive a refund of the entire deposit.
If the owner cancels the booking within 10 days before the commencement of the rental the tenant must compensate the tenant with up to 30% of the contracted price of the entire stay.
Force Majeure
If the rental is cancelled by either party for substantiated reason or force majeure, no compensation will be due to either side.
Deadline and Sanctions
Don’t panic! The decree was only published last week so you have a little time to prepare. Registration will open three months from publication, which was Feb 11th. This takes us to May 11th, 2016. From this date we believe you will have three months in which to register your property. You then have 12 months to ensure your property is fully compliant.
If you rent out your property without registering or before your property is fully compliant then you are liable to be fined. Maximum fines are stated as 180,000€.
Spain is still attracting thousands of foreign buyers each year and purchasing a property is likely to be one of the largest purchases you will ever make. On what else would you spend over 100,000€?
If you are buying to retire or making a permanent move then you are likely to spend a great deal of time in your new town so you want to be sure it is the right one. You may have visited a few times for a holiday but is that really enough to get to know an area?
With so many properties available to rent on the Costa del Sol many people are now choosing to rent before they buy. Renting is an easy way to “try-before-you-buy” allowing you to experience your chosen area as a resident rather than a tourist.
Puerto Banus, for example, is a very popular place for tourists – all night bars, restaurants and a real party atmosphere create the perfect tourist nightspot. A nice place to live? Probably not. Spending a week living in Puerto Banus would probably be a sleepless experience. Throughout most of the year the port is packed full of revellers and few venture home before the sun wakes up!
At the other end of the scale inland towns like Ojen seem like the perfect country retreat. A quiet, tranquil village with views to die for – olive groves, quaint white houses – perfect. But are you looking for such isolation? Although most of the smaller, inland towns are well connected to utilities they can be a long drive from the lifestyle you are looking for. You may have been expecting more of a social scene in your chosen town but be prepared to drive to your nearest bar or restaurant. You may find yourself cut-off from society. David Bebbington moved to Spain from Manchester in 2004. “We wanted to be near to night-life but somewhere quiet.” he said. “La Quinta was sold to us as ‘only a short-drive from local nightspots’ but it was more like half an hour. Although the area was peaceful and quiet it was just too far from anything. We didn’t have a single bar or shop within walking distance and we felt completely cut-off.”
Renting a property in your chosen town is a great way to weed out any possible issues. Quite often visitors and locals will view a town differently. Visitors tend to do the “tourist” activities: visiting museums, hiking, sampling local delicacies. Locals live there – they have jobs and families to look after and their day-to-day tasks are probably pretty similar to your home life. Remember, what you do at home now will still need to be done when you move. Take the children to school – where is the nearest school? Do the food shopping – where is the nearest supermarket? Not feeling too good – where is the nearest doctor? How many hours of sun you get may turn out to be the least important requirement.
My advice is to rent before you buy. If you buy first and then find the area isn’t what you expected you will have to find a new property, sell the one you just bought and move again – extra stress that I’m sure you don’t need.
Rent for six months first. Live with the locals, find out about local activities, local amenities, community fees, traditions etc. Become part of society and above all….. learn to speak Spanish!
5 Bed Villa For Rent – Puerto Banús – Ref: R261409
LOCATION!!!!! Charming finca style of villa ONLY 1.5 KM FROM PUERTO BANUS, By the Golf Course Dama De Noche. It consist of independent living areas with bedrooms and kitchen, what makes it perfect for big families and group of friends. The villa has stunning panoramic views from the garden and terrace. Also has a big barbeque area with table tennis and pool bar .Good Sized Swimming pool .
Price: 3,500€ p/month
Setting: Close To Golf, Close To Port, Close To Shops, Close To Sea, Close To Town, Close To Schools
Orientation: South East
Pool: Private
Climate Control: Air Conditioning
Views: Mountain, Panoramic, Garden
Features: Fitted Wardrobes, Near Transport, Private Terrace, Solarium, Satellite TV, Games Room, Guest Apartment, Storage Room, Ensuite Bathroom, Marble Flooring, Bar, Barbeque
Furniture: Fully Furnished
Kitchen: Fully Fitted
Garden: Private
Parking: Street
Category: Holiday Homes
A stunning three bedroom south facing penthouse situated within the luxurious beachside development near to Puerto Banus. The property has been built to the highest quality standards, comprising of large spacious terraces, a fully fitted kitchen, laundry room, large lounge/dining room opening onto a wonderful and very private terrace, with views over the beautiful communal gardens and mountains.
Price: 2,500 p/month
Setting: Beachside, Close To Shops, Close To Sea, Close To Schools, Urbanisation
Orientation: South
Condition: Excellent
Pool: Communal
Climate Control: Air Conditioning
Views: Sea, Garden
Features: Covered Terrace, Fitted Wardrobes, Near Transport, Private Terrace, Ensuite Bathroom, Marble Flooring, Double Glazing, 24 Hour Reception
Furniture: Fully Furnished
Kitchen: Fully Fitted
Garden: Communal
Security: Gated Complex, 24 Hour Security
Parking: Underground
Category: Luxury
Charming family home set in a popular residential location of Calahonda. This villa is built in 2 levels in rustic ,traditional style and is well equipped , has a 1200 m2 garden and a large terrace leading to the garden and pool. The property has a spacious and comfortable living room-dining area with a staircase leading to the upper bedrooms.
Price: 2,200€ p/month
Setting: Close To Golf, Close To Schools, Urbanisation
Condition: Excellent
Pool: Private
Climate Control: Central Heating
Views: Sea, Garden, Pool
Features: Covered Terrace, Fitted Wardrobes, Private Terrace, Satellite TV, ADSL, Guest Apartment, Ensuite Bathroom, Marble Flooring, Double Glazing
Furniture: Fully Furnished
Kitchen: Fully Fitted
Garden: Private
Security: Alarm System
Parking: Private
3 Bed Penthouse For Rent in Calahonda – Ref: R391761
Unbeatable Panoramic Views!! Fantastic 3 bed Penthouse situated in a secure gated community at the upper part of Calahonda .This Top Floor South Facing Apartment commands magnificent panoramic views over the coastline and out to the sea. Comprising of three Bedrooms, 3 Bathrooms , Fully Fitted Kitchen and separate laundry room. The urbanisation has a lovely Garden and swimming pool.
Price: 900€ p/month
Setting: Close To Golf, Close To Schools, Urbanisation
Orientation: South
Condition: Excellent
Pool: Communal
Views: Sea, Panoramic
Features: Covered Terrace, Fitted Wardrobes, Near Transport, Private Terrace, Satellite TV, ADSL, Utility Room, Ensuite Bathroom, Marble Flooring, Jacuzzi, Double Glazing
Furniture: Fully Furnished
Kitchen: Fully Fitted
Garden: Communal
Security: Gated Complex
Parking: Underground
2 Bed Apartment in Bahia de Marbella – Ref : R391749
Lovely 2 bedroom apartment with sea view in Bahia de Marbella, Built in the style of the traditional Andalucian white villages, it is a small community of houses and apartments in the exclusive Bahia de Marbella area. First-line beach, it has a private gate leading directly onto sandy Los Monteros Beach, generally considered one of the best in the area.
Price: 1,500€ p/month
Setting: Beachside, Close To Golf, Close To Sea, Urbanisation
Orientation: South, South West
Condition: Good
Pool: Communal
Views: Sea, Garden
Features: Fitted Wardrobes, Private Terrace, Satellite TV, ADSL, Ensuite Bathroom, Marble Flooring, Double Glazing, 24 Hour Reception, Restaurant On Site
Furniture: Fully Furnished
Kitchen: Fully Fitted
Garden: Communal
Security: Gated Complex, 24 Hour Security
Parking: Underground
Real Estate News - Marbella, Spain 