[Webinar] Legal changes affecting holiday rentals in the Balearic Islands

This informative webinar aimed at holiday rental owners, rental agents and property investors in the Balearic Islands

In the past 8 months, several significant changes in the Tourism Laws in the Balearic Islands have been introduced with the aim of striking a balance between residents and tourists on the Spanish islands. 

How do these new laws impact on existing owners who rent out their property? Are the Balearic Islands still a sound investment for property investors? 

During the webinar we discussed in further detail the issues affecting holiday rental activity in the region. We also covered the current situation in relation to the application of legal changes and upcoming zonification for all the Balearics. Furthermore, we covered topics relating to holiday rental taxes, requirements and the future of the industry for these islands.

In a 30 minutes presentation, this webinar aims to guide homeowners, agents and property investors through the current legal requirements relating to holiday rental properties in Mallorca, Ibiza, Menorca and Formentera.  You can find the recording of the webinar here.

The presentation was followed by 15-minute Q&A, we answered many questions but understand that we could not respond to all. However, we answer some of the most common questions we received during the past session:

 

Q: I missed your reference to "sanctions" please could you cover in more detail?.

A: The sanctions that the new reform introduced ranged from €4.000 to €40.000 depending on the seriousness of the infraction. Fines could be issued for infractions such as renting without a licence to tenants breaking community rules. You can find detailed information about the type of infractions and the sanctions linked to them in Capitulo II of the Law 8/2012

 

Q: What will happen after the moratorium?

A: We do not yet know exactly what will happen after the moratorium period. A specific urban plan (PIAT in Spanish) for each island is expected to be released in August this year. This will detail the saturated areas in each island and the maximum period of renting for all types of holiday rentals. The PIAT must be published by each individual Island Council, therefore, we can expect different PIAT interpretations depending on the situation on each island.

So far, the council in Mallorca is the only one to have published a provisional plan for the zonification of tourist accommodation. However, the plan is still pending approval.

 

Q: To clarify if you are not a Spanish resident you cannot accept holiday rentals? Or if I live on my property for some weeks in the year but it is not my main residence can I let it out?

A: This topic can be confusing, however, the new law reform (Art 50. Section 20) states that in order to rent your property as a holiday rental in certain areas (all of them determined by the zonification that the PIAT establish for each island) the homeowner must certify that the property is their main residence.

According to the law, for a property to be your main residence in the Balearic islands you must live there for at least 183 days of the year and this must be certified by the local authorities.

 

Q: I have a property that has two houses on the plot - would I be able to get a licence in this situation and would both houses have to be rented at the same time or can I live in one and rent out the other?

A: As this represents a particular situation, I would suggest asking your local Island Council. Considering the current legal situation, if we are talking about two different properties, with separated entries and completely independent one to the other, the property selected to be a holiday rental should not have problems to obtain a licence.

 

Q: How do we pass guest details to the Police?

A: You can pass guest details to the police both physically and through their electronic system. If you want to do it online, you must first go to your nearest police station to request the activation of your user login online. Your NIE/NIF will be required in order to verify your identity. After that, you would be able to login to the police registration system and proceed to send them your guest’s details every time your holiday rental is occupied.

 

Q: Are licences issued pre-August 2017 subject to a 5-year renewal?

A: According to the new law reform, all licences will be valid for a 5 year period. In the current situation, firstly authorities will need to unfreeze licensing approvals. We recommend waiting until the end of the moratorium period when we all expect to have a deeper insight of what will happen to all holiday rentals in the Balearic Islands.

 

Q: Please clarify the 60-day holiday letting period for existing licence holders? & Is the 60 days max rental restriction, for saturated areas, the maximum time frame allowed per every time we rent the property i.e. per client or the max. period per year?

A: There is a 60-day limitation for all residential homes (main residence of the homeowner) that aim to be used as a holiday accommodation. The Island Council in Mallorca has decided to apply this limitation to Saturated areas (however, we need to wait until August to see how this requirement is applied to each island).

 

Q: When they keep 'changing the goalposts' in terms of zoning and who will be eligible to lease their property will this spark legal reprisals for the Balearic government and are we not protected by EU law?

A: Each Island Council has a period of one year ending 1st of August 2018, to define zones according to the level of tourism. For example, tourist hotspots, rural areas, protected, areas, etc.

The Island Council is responsible for deciding the zones. With the exception of the city of Palma, it is Palma town hall who have the exceptional response to establishing tourist zones within the city since Palma is the capital city and has the highest density of population.

The holiday rental association have already put in a claim against these law reforms as some of the proposed legal requirements do not coincide with European law. This is an ongoing process and you can find out more through APTUR.

 

Q: If I'm renting out my property to friends and family only, without using any holiday rental platforms for promotion and for less than 31 days, do I still need to apply for a licence?

It seems that you can carry on with your current activity. As far as we know from the last Tourism Law Reform, authorities established that all rentals under 30 days would be considered touristic or for tourist purposes. Therefore, as you mentioned in your email, as long as you set up contracts for a minimum of 31 days your rental would be regulated by the Urban Rental Law (LAU, 1994). Additionally, you are not promoting your property through any of the touristic channels detailed by the Tourism Law, another limitation established with the holiday rental law in the Balearics.

 

To conclude, the Balearic Islands face a common tourism challenge, which is the high volume of visitors during peak seasons. However, each island has its own particularities that affect the internal management and tourism control. Therefore, by August each Island Council will decide how they apply the new law reforms so we cannot expect a common framework.

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