If you are a property owner on the Costa del Sol, and you like many others, rent out your second or holiday home to vacationers – pay close attention to this blog. Changes are coming, and if you don’t fully understand how these new Spanish rental laws will affect you, you may find yourself in a panic.

So far the Spanish government and to the media have been fairly vague in describing the implications of this new rental law, particularly how it will affect foreign property owners on the Costa del Sol. Many people who own property in Spain use it as their second home and as a rental units as a means of raising income to cover the mortgage and running costs.

Do you rent your Spanish holiday home?

On June the 1st of 2013, there were several changes made to the existing law on Spanish residential rentals (LAU). Some of these changes could very well affect the holiday rental market here on the Costa del Sol. The general feeling amongst those who own Spanish property is confusion; they can understand the reasoning behind it but they are bemused by the lack of details available, which is why it’s important to contact a trusted legal firm that can give you the correct information.  These are only a few of the questions we’ve been asked at Perez Legal Group….

Is there a new rental law in effect?
How much will it cost?
How will this affect my Spanish taxes in the long run?
Do I really need a licence?
When can I expect this new law to really take affect?

How worried should you be as a landlord?

As it stands right now, there are three main concerns that landlords will no doubt have regarding this new legislation.

  1. Renting your Spanish property will mean you have to file a 210 tax form every quarter declaring the income you receive per month.
  2. Properties will need to be inspected before the town hall will approve and issue landlords with a rental licence.
  3. The overall total costs of obtaining this rental licence. (In the opinion of Perez Legal Group, the cost for obtaining this rental licence shouldn’t cost more than 300 euros.)

Let’s go back to basics for a moment, and look a little deeper into the new Spanish rental law.

Why do we need a Spanish rental law anyway?

It is has been suggested that changes to the current regulations were desperately needed because of growing pressure from the hotel industry, as growing numbers of holiday makers choose to stay in private accommodation rather than hotels. In 2012 alone, there was three times more revenue generated through holiday rentals than through the hotel stays.

The law is also a means of clamping down on property owners who are failing to declare their income and therefore dodging paying tax on their rental income. At Perez Legal Group, we can assist Spanish property owners in all aspects of tax including rental income.  According to Spain’s Finance Ministry, figures published showed that there is still 2.9 billion euros of undeclared revenue from the rental of private homes, with a significant portion of this coming from short-term holiday rentals.

What do these changes mean to you?

Believe it or not there are benefits involved with the new Spanish rental laws. For one, the tourism market will be positively affected – regulating holiday rentals will bring Spain up to speed with the rest of Europe. Countries like France, Italy and Croatia follow strict guidelines. If you were to advertise your holiday rental, and make it known that you follow all guidelines, you will attract more renters who wish to keep this legitimate.

How do you apply for a licence?

Perez Legal Group can handle the entire process for you, relieving you of the hassle of visiting the Town Hall (ayuntamiento) and filling in official forms. We will explain what procedures you need to follow.

In summary, there are two types of holiday rentals in Spain and the category that you fall under will depend on what you need in place when the new guidelines come into full effect:

  1. Alojamiento turistico (Tourist accommodation) – these are homes or units that function as a tourist business.
  2. Casas vacacionales (holiday homes) – very common and most of you will fall under this category. You rent your home out for short-term holidays.

How should you prepare?

If you do in fact rent out your holiday or second home to tourists or even weekenders from Great Britain, there are two things we recommend that you prepare for:

  1. Start declaring your earnings now, and pay the taxes due.
  2. Make sure your guests (and you) are insured with the right coverage.

If you have any other questions regarding the new Spanish rental laws, call us on 952 833 169 and we will be happy to help!