The regional Government of Andalusia, known as the Junta de Andalucía, has just passed a decree regulating tourist rentals in the region, following in the footsteps of other regions like Catalonia, the Balearics, and the Canaries. These new rules apply to any short term rental agreement which is habitually offered as accommodation at a price fixed by the owner and which is advertised through tourism channels, such as travel agencies or online platforms. According to the Junta de Andalucía, every property which is publicised on these portals and puts the owner in touch with travellers has to be registered as tourist accommodation –
This new regulation is arising a considerable amount of queries from our clients, so we have prepared these notes for general guidance:
1.-Is there a ban on short term rentals?
Many UK newspapers incorrectly reported that there was a ban on holiday rentals for property owned by private individuals. This is absolutely not true as the objective of these changes is not to protect the interests of the Hostelry Sector, but simply to set minimum quality standards that will make the whole tourism industry more competitive.
2.-Are long term rentals under this new regulation?
Not at all. The regulation exclude properties rented for more than two consecutive months by the same person, which would be governed by the normal property rental law. If the property is rented out property for weeks or fortnights during the three summer months, it is clearly under the new regulation.
3.- What facilities does a property have to have?
It must have its first occupation licence. The bedrooms must have exterior ventilation and means of shutting out the light. There must be coolings and heating systems at least in the lounge and bedrooms. The regulations insist on domestic appliances, a first aid kit, information about the area in the form of leaflets, maps, etc, and a complaints book. the regulations also specify that the property must be cleaned when clients arrive and leave. Bed linen must be provided, along with a spare set. Tourists must also be given a contact telephone number in case any problems rise, and must be made aware of rules set by the community of owners. The maximum capacity for a single property may not exceed 15 people.
4.- How & when can a property be registered on the Registro de Turismo?
Registration will start officially on May, the 12th, 2016 (in three months’ time, after the decree was published in the Official Bulletin of the Junta de Andalucía (BOJA). The Junta’s Tourism Department estimates that the register will be operative in May, and recommends using this interim period to prepare the paperwork and the property: find or obtain the first occupation licence, download the form, get hold of leaflets, tourist maps, etc or install air conditioning. The aim is that by the summer, properties will officially be able to continue with their normal activity. You can always to ask registration in advance.
5.- What documentation has to be presented?
It is not a complex process, but this is one of the most common concerns among owners. Prior to the presentation you will be needing to obtain your NIE number, and the details corresponding to the registration of your property in the Catastro. You will have to present a statement, that has to be filled in and signed, and then presented into the corresponding office. The registration will then be processed so the property can be rented, and a code will be assigned to identify the property. That code must be included when advertising it on online platforms. You could also authorize somebody to do it on your behalf.
6. -What are the tax implications of a property which is rented for tourism?
It is treated as an urban rental, in other words the money obtained from rentals has to be declared as annual income. It is not necessary for an owner to register as self-employed, no separate taxes have to be paid and IVA does not have to be charged if the property is being rented out by the owner. This type of tourist accommodation is treated as a service, not an establishment.
We strongly advise to use this new regulation as an opportunity to revise your fiscal situation regarding your Spanish assets, and if necessary, regularize whatever tax statements could be pending.
7.- Do you have to give each tourist a contract, or a bill, or ask for their ID for police registration purposes?
The rules say that you have to give each client a contract, even if they are only staying for one night. Also, that written agreement must be kept for one year in case inspectors from the Tourism authorities want to see it. The document must include the name of the person or company that is renting the property, the registration code, the number of people who will be staying in the property, the dates they arrive and leave, the total cost of the stay and the contact phone number for them to ring in case of problems. The owner can only issue a receipt for payment, rather than an invoice, and the rental price can be freely determined by the owner of the property. For security reasons, the people who will be staying in the property should provide their identity document upon arrival, but it is not yet been known whether these details need to be passed on to the police. Hotels and apartments do so online, but this process is not covered by the Tourism authorities.
8.- What happens if you want to rent out three or more properties within a 1,000 metre radius?
This is the most controversial point about these new regulations, because it states that people who rent out three or more properties in the same building or in blocks within a radius of one kilometre must register as Apartamentos Turísticos and are governed by this different regulation, which has been modified for this purpose. It is more demanding because it insists on an opening licence and certain requirements which include minimum measurements in different rooms of the property. Also, properties that are considered to “apartamentos turísticos” are treated differently for tax purposes. According to the Junta, anybody who owns three or more properties has to register as self-employed, and will be taxed in the same way as those who are running a business.In this case, they will come under the section of ‘apartamentos turísticos’ as far as Hacienda, the Spanish tax agency, is concerned.
Anyhow, it must be also mentioned that the rules, under the title Decreto 28/2016, de 2 de febrero, de las viviendas con fines turísticos y de modificación del Decreto 194/2010, de 20 de abril, de establecimientos de apartamentos turísticos, has failed to elaborate on two important aspects: what does compliance really entail and what are the fines for non-compliance.
- In respect to compliance, the rules obliges owners to offer clients –among other requirements- the following: license of occupancy, rooms with adequate ventilation and darkening devices (shutters or similar), sufficient furniture and necessary appliances, touristic information whether in hard copy or electronic, of data for the area (bus schedules, close-by parking facilities, medical facilities in the vicinity and a plan of the town), complaint form, first aid kit, bed linen, cutlery and crockery adequate to the size and requirements of the property (and a replacement set for each). As if not enough, the law says owners will have to have a telephone number available to tenants where they can call to resolve any incidences, an instruction manual for kitchen appliances, details of the use of communal facilities and property equipment, as well as details on access of pets to the property and information on potential restriction for smokers and a few other requirements.But whilst some of the above are clear, the meaning of ambiguous words such as “adequate”, “sufficient” and “necessary” can widely differ depending on who you ask. Attending these grey areas is a pressing requirement.
- The fine system is also not clear. The 2016 Act refers to a 2011 Rural Accommodation Act for elucidation of what fines are applicable. Some scaremongers have enjoyed spreading the belief that if you do not register, you will be fined up to 150,000 Euros. The reality is that failing to register their properties can “only” be fined between 2,000 and 18,000 Euros, the heavier monster fine of “up to 150k” being reserved for other contraventions i.e. unlawful discrimination or obstructing inspectors on duty.
Interestingly, the Act does not address the fines for failing to comply with one or more elements within the the long list on point a), for instance: missing spoons, dirty linen or insufficient first aid kit.
Previous experiences in other Spanish regions, where similar rules apply, shows us that lack of registration is attracting the vast majority of fines, with little or no precedent in respect to the degree or correctness of compliance.
So, if you are planning to rent out your property in a short term basis in the next future, we strongly suggest that you arrange in advance your registration. Also, should be wise to use this opportunity to check that you are fullfiling all fiscal regulations for your property in Spain.
Javier Herrera Llamas, Spanish Legal Services