Renting out your property in Spain as a holiday home can be an excellent way to earn additional income. However, buyers should be cautious about new regulations in two popular areas.
Thinking of renting out your Spanish home to holidaymakers? Here’s what you need to know…
If you’re thinking of purchasing a holiday home in Spain and don’t want it to be sitting empty for much of the year, one great way to make some extra income is by letting it out as a holiday home.
Holiday home ownership is increasing in popularity in Spain. New data shows that the number of tourist flats in Spain has shot up in the last year by 9.2%. The greatest growth was seen in Andalucía, 17.5%, the Valencian community (19%) and Catalonia (15%).
Click for a step by step guide on the process of buying a Spanish holiday home. Plus, discover the benefits of owning one and more…
Many choose to rent out their holiday home through Airbnb, and the latest stats shows just how lucrative this is. This year, the company had its most profitable quarter one ever, with a net income of €264 million.
Holidaymakers prefer Airbnb to hotel stays because of its flexibility, lower cost and the more relaxed, intimate atmosphere. If you are considering buying in Spain, staying in an Airbnb in your chosen area will likely give you a feel of what it would be like to live there.
However, to run a successful holiday home, its vital to have your documents in order and be fully registered. The news stories below demonstrate just how vital this is.
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Balearic Islands announces shut down of illegal holiday homes
Cala Figuera, Santanyi, Balearics.
The Balearic Islands’ government has published a decree allowing island councils and town halls to seal off holiday homes that are operating illegally. Additionally, the government wants local police officials to be involved in inspection work. Holiday homes are just part of this new decree, which covers other issues such as nature conservation, environmental impact study, waste and roads.
According to Majorca Daily Bulletin, a new report has revealed there are 8,700 illegal holiday lets in the Balearics. This was determined by analysing Tax Agency and island councils’ data.
Valencia: homes will not keep their rental licence when sold
Calpe, a town in the Valencia community, population with home buyers and holidaymakers alike.
By this summer, Valencia is planning to introduce new rules to clamp down on unregulated holiday home ownership. This will include a ban on properties being able to keep their tourist licence when they are sold. If the new owner wanted to rent out the property, they would have to apply for a new licence.
Additionally, the Tourism Minister Nuria Montes is enforcing that every day rooms are not to be offered for rent inside tourist homes. This is prohibited in Valencian law. She has insisted that the law will tackle the underground rental economy and that the focus is not on licenced holiday homes. There are around 120,000 tourist properties in the region.
Renting out a holiday home in Spain: rules & regulations
The rules and regulations that you’ll have to follow to let out a holiday home will differ in each autonomous region. When you are looking at purchasing a property, ask your estate agent and lawyer for more specific information about the area’s holiday home rules, and, if the property you’re interested in has any history as a rental.
Most regions will require that the property has an official tourism licence. This can mean your property meets a certain set of requirements, such as air-conditioning and central heating. These can be difficult and costly to meet, especially with older properties. Once you licenced, you will have to maintain the property to a set standard.
Renting out a holiday home will make you a tax resident of Spain. Fortunately, the UK (and other countries) has a Double Taxation Agreement with Spain, meaning that you will not be taxed twice on your income. One thing to be wary of is that the income you receive from renting out a property in Spain will be subject to fluctuations in the currency market. This can make it challenging to predict how much rental income you will make. To safeguard against this, you can reach out to currency specialists, Smart Currency Exchange. They can organise a forward contract for you, which will enable you to lock in an exchange rate for up to twelve months, making it easier to predict how much you will make.
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