Tourist Apartment Licences in the Canaries and Balearics, April 2012
The issue of tourism licences for holiday lets crops up from time to time in various popular Spanish tourism spots. We have conducted some research into the licensing laws in the Canaries and Balearics, which we have collated in this document. Please note that this document does not constitute legal advice and we cannot guarantee the accuracy of the information set out here. If you are thinking about operating a holiday let, you should conduct your own research and ideally take legal advice. We hope that this document may serve you as a starting point for conducting your research, but please do not rely on the information set out here.
In our research we have not been able to establish whether there is a national overarching law on holiday lets or whether each province has its own laws.
What we can establish is that the laws surrounding holiday lets in the Canaries and Balearics, at least, seem to focus on distinguishing between homes on residential complexes and those on tourist complexes. They seem to determine that properties on a residential complex cannot be rented out commercially (i.e. found via advertising) on a short term basis unless to friends and family (and only then if income is declared and tax paid).
On tourist complexes, it appears that a sole letting agent is required to control 50% plus one of the properties.
Detached properties that are private residences appear to be exempt from this but do require a licence to be let. These licences have been unobtainable for at least five years.
A law (in Spanish), specifically for the Canaries, roughly translates as follows:
“It is illegal to rent out any properties in a residential area on a short term basis to anyone apart from family and friends. The definition of ‘friends’ has been a bit unclear, but it seems that anyone who has found your property via online advertising sites, agents, newspapers etc would not be allowed to rent a villa in a residential area for a holiday let.”
“Every complex should have only one registered letting company (so homes can’t be let out on the same complex by several different companies) and the company will require written authority, signed before a public notary, from at least 2/3 of the owners on the complex. The management company must rent at least 50% plus one of the apartments on a complex. There can, however, be more than one company on a complex if it is physically divided into different units with independent accesses, services, installations etc.”
This has been law from 1995 and it came into effect in 1997. People have already been fined in the past for not having the correct licence or for renting illegally. We have read that 17 inspectors have been deployed (as of January 2011) to the islands to find the suspected 400,000 illegal beds and 650,000 ‘clandestine’ beds. We believe that they are working on commission and will be given a bonus for every property they find without a proper licence. Fines issued can range from €30,000 to €300,000.
All holiday lets require the services of a letting agency. This does not mean that you have to take bookings via them or that you cannot take bookings independently, but that the property needs to be registered with a professional property agent who holds an official licence. It is not clear whether owning a property in complexes that hold ‘touristic licences’ is sufficient. The problem has been exacerbated by the fact that the local government has now stopped issuing licences for the time being.
The main point is that everyone needs to seek legal advice to see if the licence they hold is valid, and if they are allowed to rent on their specific complex.
Long term rentals (of over a year) seem to be ok.
On the mainland, the fact that Spain is split into many autonomous regional governments makes it different depending on where a property is. There are a few instances over the years where people have been fined for not having the correct licences (Murcia might have slightly different letting laws to the rest of mainland Spain), but it does seem that in general licences are easier to come by and have fewer requirements than in the Canaries and, to a lesser extent, the Balearic Islands. Suggestions vary from needing to register with the department for tourism to just informing the local authorities about the intention to let. The former would seem to focus on competition in the accommodation sector, the latter on who could be generating an income from tourism and therefore liable to pay taxes.
Locals and those affected by the recent rise in ‘noise’ around this topic have set up ALOTCA (Asociacion de afectados por la ley de ordenacion de turismo de Canarias).
The most recent source of reasonable reliability is this press release: http://www.janetanscombe.com/news/press-release-issued-to-spanish-media-introducing-illegal-letting-association-alotca.html
December 2012: This source states that the Director of Economy of the Canary Islands, Jorge Rodriguez has confirmed that the Executive is implementing an inspection program in order to find all the illegal beds on the islands. 17 inspectors have been deployed and will work over the next year to seek out any properties that are being rented without a proper licence and without meeting the relevant requirements. [source: http://www.eldia.es/2010-12-15/canarias/canarias15.htm(in Spanish), and http://newsinthesun.com/?p=4568]
This source states that Canarian tourism law permits commercial letting only in touristic complexes, and in those, only through the sole agent on site. In residential complexes, short term rentals are only permitted to friends and family. [http://www.janetanscombe.com/news/inspectors-to-find-and-fine-owners-of-residential-apartments-who-let-commercially.html]
This source states that renting property to holidaymakers without authorisation and without being registered with the Tourist Board will be considered a very serious infringement according to article 75 of Law 7/1995 and may be punished with a fine of up to €300,000 [cited in the document mentioned above http://www.palomabeach.com/images/marcoscabrerapage3.jpg, and according to Law 7/1995 http://noticias.juridicas.com/base_datos/CCAA/ic-l7-1995.t6.html#a75]
This source states that any companies wishing to engage in the establishment and development of tourism in the Canaries must enroll in the General Register of companies, activities and tourist establishments and obtain prior authorisation from the relevant authority [Article 13 of Law 7/1995 http://www.gobiernodecanarias.org/boc/1995/048/001.html]
This source states that all businesses and establishments, regardless of their nature, must obtain the relevant authorisation and meet all of the requisites necessary to carry out their touristic activities. All tourist lodgings in the Canaries will be obliged to exhibit a plaque which shows that it meets all the requisites for a holiday let, as well as relevant identification numbers [Article 21 of Law 19/2003 http://www.gobiernodecanarias.org/boc/2003/073/002.html]
This source states that every complex should have only one registered letting company (so homes can’t be let out on the same complex by several different companies) and the company will require written authority, signed before a public notary, from at least two thirds of the owners on the complex. In order to become the sole agency on a site, the management company must rent at least 50% plus one of the apartments on a complex. If this figure cannot be achieved then nobody is allowed to rent their property on a short term basis. There can, however, be more than one company on a complex if it is physically divided into different units with independent accesses, services, installations etc. [This is according to a document produced by a Tenerife Tax & Accountancy Consultancy, Marcos Cabrera S.C. It is dated March 1996 however. http://www.palomabeach.com/images/marcoscabrerapage2.jpg]
This source states that in Spain generally, those wishing to rent out their property will need to become a Spanish tax resident and register their letting business. Properties will also need to comply with relevant Health and Safety requirements. Owners will also have to pay monthly social security contributions and obtain public liability insurance [http://www.culturespain.com/tag/spanish-health-and-safety]
Clip from The Sunday Times in September 2007 outlining the matter as it was then http://www.spanishpropertyinsight.com/doctor/070916.htm
Janet Anscombe’s Tenerife blog: http://www.janetanscombe.com/news/public-meeting-15th-december-in-south-tenerife-by-turismo-and-illegal-letting-inspectors.html