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British tourists are still coming to Spain in search of sun and sea, so how easy is it to invest in a property to let out to holidaymakers?
The boom in British holidaymakers is making Torremolinos an excellent place to invest.
Many British people want to buy a home in the sun and be able to let it out to tourists to help pay for the mortgage. While authorities in Barcelona are struggling to contain such rentals, Torremolinos on the Costa del Sol is welcoming the extra tourism that this kind of letting is bringing in. The boom in British holidaymakers is making Torremolinos an excellent place to invest.
Barcelona clamps down
The Mayor of Barcelona is determined to slow down the explosion in unlicensed private rentals that advertise through portals such as Airbnb and HomeAway. Since 2012 the law in Catalonia has required all property owners, Spanish and foreign, to register their property through their local town hall and to apply for a licence to rent out to tourists for no more than four months per year. Despite warnings of high fines for failure to this, there are still many people who flout the law believing that they won’t get caught.
In 2015 Airbnb was fined €30,000 for advertising unlicensed properties. Now the authorities have decided to get serious and Airbnb are facing a €600,000 fine. Janet Sanz, Barcelona’s Urban Planning Councillor said “the rise in the maximum fine came after two websites continued to advertise holiday apartments without permits. This illegal practise has had a very hard impact on our city. It raises rental prices, fuels the black economy and causes conflict between neighbours.”
La Rambla, Barcelona. The authorities are determined to stop illegal rentals
Torremolinos welcomes rentals
Meanwhile, at the other end of Spain the town of Torremolinos is welcoming increasing numbers of tourists and actively encouraging rentals. The British have traditionally been the biggest visitors to the town throughout the year and recently Jet2holidays announced that they were seeing a rise of 10 percent for winter package deals to the seaside resort. This followed a record summer for tourists.
Torremolinos is within easy reach of Málaga airport and on a smooth and efficient train service. Prices are reasonable and many of its chain hotels have been refurbished. The infrastructure is sound and can cope with the increasing numbers of tourists and not long ago, the town’s mayor decided to pedestrianise the town centre which has been a popular move.
Right next door to Torremolinos is Benalmádena, another favourite destination for British tourists looking for sunshine and beaches. Both towns have affordable hotels and many apartments to rent with property for sale.
What should an investor do?
Barcelona is still a good place to invest your money if you are looking toward the higher end of the property market. It is though, becoming more difficult to obtain a rental licence in the city so it would be advisable to check if the property is in an area where the granting of a permit is likely. House prices are increasing faster than almost anywhere else in Spain and people are looking to buy in suburbs away from the centre, where there are good deals to be found, especially on new builds. There is a ban on granting new licenses in two central districts, Barrio Gótico and Ciutat Vellam, but you can still buy a property there which already holds a license if you wish to rent it to holidaymakers. The process to apply for a licence in other areas of the city is fairly straightforward – though lengthy – and you will need to do this at the district’s town hall, ajuntament. There is an administration fee and municipal license tax to pay and these vary according to the local municipality.
Providing your property meets the required standard for rentals, you shouldn’t have any problem with your registration and are then free to let it
Torremolinos is less expensive than Barcelona and there is property available to buy. Just as in Barcelona, you will need to register your property if you wish to let it to tourists but there is no effort to curb this kind of rental at present and registration of your property is free in Andalusia. You can apply to register at the Torremolinos town hall, ayuntamiento. Providing your property meets the required standard for rentals, you shouldn’t have any problem with your registration and are then free to let it. To date there are no reports of Torremolinos imposing fines on Airbnb or the like, however Andalusian rental law allows provision of fines on property owners who fail to register from €2,000 up to €150,000 for repeat offenders.
Remember to put your licence number or registration code number on any online publicity.
As an investor receiving income from property rentals – permanent or touristic – you are of course required to declare that income to the tax authorities.
