New Holiday Lettings Legislation

On 12 May 2016 a decree enacted in 2012 (Decree 28/2012) comes into force. It has important bearings on people who rent their homes or parts of their property for holiday lets on a daily or weekly basis. This affects many of our clients. Under this decree all persons who let their properties in this way will be required to register the activity.

The Junta’s intention in redacting this decree is ostensibly to ensure that such lets meet certain minimum standards. However, since there has been no clamour from consumers for a raising of standards we can safely assume that the real motives are:

• to appease the hotel industry which complains about unfair competition from unregulated businesses 
• to raise taxes from people who currently hide their letting income by, for example, receiving all or part of their income in overseas accounts or in cash.

However, there are some very important exemptions, principal among which are:

• the regulations apply only to URBAN properties. Owners of RURAL properties are still required to register their property as Vivienda de Turismo en el Medio Rural but will not be required to meet the minimum standards established by the new regulations.
• properties let to tenants who stay for two months or longer as these are not considered to be holiday homes.
• If a person has three or more holiday lets within a one kilometre radius this activity falls under the  regulations governing tourist apartments.

The onus is on the owner of the property to register it before 12 May 2016. Unless this is done and a registration number obtained, which must then be displayed when offering the property for holiday rentals, the owner will no longer be permitted to rent the property.

It is estimated that there are as many as 80.000 properties liable to register but by the 12th May only 3.000 had registered. Failure to do so can result in a fine of up to €150.000.