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Holiday Rentals Law under evaluation by Spanish agency

The National Commission of Markets and Competition in Spain (CNMC in Spanish), is the agency that monitors consumer and company activity within Spain, has done it again. Last week, the agency submitted its claims to the court against the governments of Galicia and Castilla y León.

The claims were regarding the latest changes to the holiday home rental laws in these regions which were implemented in February and May of 2017.

The CNMC believes that the recent changes to the Castilla y Leon and Galician holiday rental legislation are contradictory and disregard the principles of the free market and competition, which the CNMC supports in its endeavours for effective economic regulation.

It seems that the CNMC waited for a couple of months before initiating severe legal actions. Last April, the CNMC took legal action against the Decree 12/2017 in Galicia and the Decree 17/2017 in Castilla y León in May. 

The agency publicly complained to both regional governments regarding some of the impractical requirements stated in the law. However, neither of the regional governments changed even a word in the decrees.

Since the CNMC’s first claim back in April 2017, the agency has been trying to push both regional governments to consider a change in their holiday rental legislation.

The agency’s goal is to achieve a common understanding among themselves, industry professionals and the regional governments of the current holiday rental situation, with a further goal of improving the general activity of the industry in those regions.

The CNMC has already taken action against other regional governments such as Madrid and the Canary Islands. They were the first to denounce some of the unjustified requirements. They finally achieved their victory with the court’s decision of freezing the current holiday rental law on the Canary Islands.

With regards to the Galician decree, the CNMC understands that requirements such as renting the house as a whole, a maximum rental period of three months and including instructions for any technical aspect of the property, can cause issues for efficient business development.

On the other hand, with the Castilla y León holiday rental law, the CNMC argues that measures such as a mandatory 24-hour telephone assistance, prohibiting room rental on an individual basis and government control of rental prices are counterproductive for healthy business development within the growing holiday rental industry.

So far, almost all Spanish regions have a decree that specifically regulates holiday rental activity. Some regions also go as far as to implement further control measures, the Balearic Islands have recently increased their eco-tax in an attempt to limit tourist over-activity.

Despite not being one of the most popular solutions for over population of tourists, application of holiday rentals taxes has been proposed as a solution for similar problems in Valencia and cities such as Seville, Malaga and San Sebastián. San Sebastián has already implemented restrictions on the number of holidays rental properties in the city centre.  

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