| Mortgage interest rates in the Eurozone are on the | | | | the regional government. So it does appear that |
| rise, putting Britons who have borrowed to buy | | | | most British owners of private properties on mainland |
| holiday homes in Spain under increasing financial | | | | Spain can relax, though you should always clarify your |
| pressure. As a consequence, many are turning to | | | | case with a local lawyer. |
| holiday rentals to help pay the bills. | | | | The islands, however, are another story. Powerful |
| But after recent scare stories reporting that most | | | | hotel lobbies in the Balearics and the Canaries have |
| holiday rentals in Spain are illegal, and that some | | | | pushed for local laws that make it difficult or |
| Britons have had fines of up to 30,000 Euros slapped | | | | impossible for owners to rent legally to tourists. |
| on them for renting without a licence, many owners | | | | "In the Balearics you can only rent official 'tourist |
| are now having second thoughts. | | | | apartments' to holiday makers, not private residential |
| "When I heard about this I immediately contacted | | | | apartments," explains Isabel Loeffler of Loeffler Legal |
| my rental agency in Spain, but it was news to them | | | | Centre in Mallorca. "The only kind of residential |
| as well," says buy-to-let investor David Harris, 52, a | | | | property you can rent out is a detached villa, but |
| hotelier from Essex, who rents his 2-bed apartment | | | | only if you have a licence." |
| in Mijas on the Costa del Sol to tourists. "Property | | | | The department of tourism in Palma confirms this, |
| forums are full of contradictory advice, which just | | | | and adds that licences to rent detached properties |
| leaves you more confused." | | | | are no longer being granted in Mallorca (though it |
| Aileen Hutchinson, 57, a semi-retired health and | | | | appears that they are still being granted in Menorca). |
| safety professional from Derbyshire is also | | | | It's a similar story in The Canaries. "It is illegal to rent |
| concerned. "We have recently bought a house in | | | | a residential apartment to tourists on a weekly basis, |
| Denia on the Costa Blanca, with the intention of | | | | and you need a licence to rent a villa, though they |
| renting when we aren't using it to assist in its | | | | are not issuing licences anymore," explains Mario |
| upkeep," says Hutchinson, whose townhouse is on a | | | | Izquierdo of Lanzarote Lawyers. |
| development with 18 other properties. "A disgruntled | | | | A quick search online, however, turns up thousands |
| neighbour has warned us that we need a licence | | | | of private apartments and villas to rent in both |
| from the Spanish Tourist Board to rent. With | | | | regions, many of them belonging to British owners |
| mortgages going up this is serious issue for half a | | | | who may have no idea that they risk fines if they |
| dozen of our neighbours." | | | | are caught. |
| A recent survey at the Spanish property portal | | | | "The situation is a bit of a mess" admits Kate |
| Kyero found that 82% of (mainly British) | | | | Mentink, 63, from Edinburgh, who has lived in Mallorca |
| respondents didn't know whether rental licences | | | | for 27 years, and is now a local councillor and deputy |
| were required in their area of Spain. "Clearly, there is | | | | mayor responsible for tourism and international |
| a lack of knowledge and awareness about this | | | | integration in the popular Calvia municipality in the |
| particular aspect of Spanish law," says Martin Dell, | | | | South West of the island. |
| head of Kyero. | | | | "My department's understanding is that all short term |
| The question is further complicated by the distinction, | | | | rentals to friends and family are fine, provided you |
| under Spanish law, between 'tourist apartments' | | | | declare your rental income and pay taxes, but renting |
| (apartamentos turisticos) and 'holiday homes' | | | | to strangers through a tour operator, agency, or |
| (viviendas vacacionales). "The former are a special | | | | even the internet is not allowed without a licence," |
| category of property built and licensed specifically for | | | | explains Mentink. |
| renting out to tourists, normally in a complex with | | | | Despite reports of hefty fines for some British |
| certain facilities and services under the management | | | | owners, it looks like warnings come before fines, at |
| of one company, whilst the latter are private | | | | least sometimes. "Last week we had a case in the |
| residencies rented out by owners to holiday makers | | | | town hall of a British man who has been warned for |
| on a part time basis," explains Maria de Castro, of | | | | renting out his apartment without a licence. No |
| Costa Luz Lawyers in Andalusia. | | | | further action has been taken, but he could be fined |
| This being Spain, the rules are often ignored, and | | | | if he continues," says Mentink. |
| some developers have been merrily mis-selling 'tourist | | | | Nobody I have spoken to can confirm that any fines |
| apartments' as private properties to unsuspecting | | | | have actually been paid in the Balearics or Canaries, |
| British buyers who aren't aware of the distinction. | | | | even if they have been issued. "They might not |
| 'Tourist apartments' have use restrictions, and need a | | | | stand up in court," says one lawyer. |
| licence if rules are enforced. Fines can be incurred if | | | | Furthermore, the restrictions only apply to short term |
| they are rented without satisfying regulations | | | | tourist rentals, not to longer periods that might suit |
| concerning services and facilities. | | | | owners who only use their properties for a few |
| But most Britons own what Spanish law defines as | | | | weeks a year. "Short term rentals are a hassle," says |
| 'holiday homes', so the question is do you need a | | | | Jan Westwood, of buyer's agency The Property |
| licence to rent these out to holiday makers, as you | | | | Finders in Mallorca. "If you use the right kind of |
| do in other countries like Portugal and Italy? | | | | contract you can get a winter rental, say from the |
| In Spain, with its system of autonomous regional | | | | yachting community, that is much more lucrative and |
| governments, the answer depends upon where your | | | | easy on your property, for which you don't need a |
| property is. | | | | licence." |
| "You don't need a licence to rent out a private | | | | Wherever you own in Spain, but especially on the |
| apartment or villa to holiday makers on mainland | | | | islands, the best advice is to check with a local |
| Spain," argues the owner of one rental management | | | | lawyer, and bear in mind that you can definitely be |
| company. "We have had our specialist lawyers check | | | | fined if you don't declare your rental income and pay |
| this for us, and with 3,500 holiday rentals this season | | | | tax on it. You also need appropriate insurance, |
| we can't afford to make a mistake." | | | | correct rental contracts for every client, and to |
| I cannot confirm that this is correct for all areas of | | | | check community byelaws if you belong to a |
| mainland Spain, as regional restrictions do appear to | | | | community of owners. |
| exist. In Murcia, for example, you need to register | | | | Despite the recent alarm about rental licences and |
| with the department of tourism before you can rent | | | | related fines, a much bigger problem for British |
| a private property to tourists, and can be fined for | | | | buy-to-let owners in Spain is disappointing rental |
| not doing so. In Andalusia, on the other hand, you | | | | results. "Nothing like what I was promised by the |
| only have to inform the local government of your | | | | estate agent," complains David Harris. But that's |
| plans, and in the Valencian region you don't need to | | | | another story. |
| do anything, at least according to local lawyers and | | | | |