Has anyone come across the recently published Ley de Renovación y Modernización Turística de Canarias?
http://www.parcan.es/pub/bop/8l/2012/319/bo319.pdf (http://www.parcan.es/pub/bop/8l/2012/319/bo319.pdf)
My Spanish is pretty rubbish, but it seems to be saying that while residential complexes are unchanged - ie no letting - touristic complexes will have to follow the rules, with no residents allowed and all apartments available to let through a single agent. Touristic apartments whose licences have lapsed will have 18 months to meet the new 5* specs or risk being taken over by the State and sold to developers who will bring them up to scratch. Not clear what will happen to anyone living full time in one.
There is a lot of discussion and much concern on Janet Anscombe's Tenerife site.
http://www.janetanscombe.com/news/draft-new-touristic-law-out-to-consultation.html (http://www.janetanscombe.com/news/draft-new-touristic-law-out-to-consultation.html)
Sounds like a worse nighmare than the big fines. The President's comment was to the effect that people may not like it but it is what we are going to do!
"Touristic Complexes", that sounds like Villa Florida, Castillo Mar etc.. in Caleta, and Paraiso & Coco Sol etc.. in Nuevo. Loads of people living in those. What they gonna do.
Quite Woe. We are worried. I am waiting for Janet Anscombe to do a proper translation of the draft law currently being debated in parliament. The google translate version is rubbish, not helped by the fact that the law itself is particularly poorly written, unclear in several areas and open to mis-interpretation. It is important to state that this is not the final version of the law, it is being contested, particularly by Fuerteventura and Gran Canaria as they feel it benefits Tenerife and harms them.
One of the reasons we are worried is that it sets out to enforce the use of complexes as they were originally built. So if your complex was built as touristic, you should be renting to tourists. If you own on a residential complex you should not be renting to tourists.
It depends on whether tourist and residential is allowed in the licence granted when the property was built.
Dormant touristic complexes have 2 years to re-apply for their tourist licences. It is not immediately clear what happens if they do not, but perhaps they could be deemed to be in 'breach' for not using their complex correctly as it was built and then there would be negative consequences, possibly as a last resort even expropriation of the complex.
Clearly a law like this has no place within 'social reality' and under the Spanish Constitution you have the right to live in your own property, so they cannot stop you doing that. But they could possibly stop you doing residential lets on a tourist complex, so if this was not your main residence you could only rent to tourists by paying to upgrade the complex to regain the tourist licence, under a newly appointed sole operator. Or you could just leave it empty, or give the keys back. It doesn't matter really, your apartment will effectively be worthless.
Apparently owners on dormant touristic complexes will only have to meet the standards in place when they were first granted a licence. This is to make it easier for them to get legal. But they will then be required to renovate and upgrade facilities to meet the new 'quality' standards. This could be hugely expensive, but rest assured they have 'soft finance' in place to enable owners to get even deeper into debt and double their negative equity. And if the owners don't do it, they will find an investor who will and then you will owe them the money and have to hand over the keys to your property.
As it stands the new law is tantamount to compulsory nationalisation of dormant touristic complexes. And they can do it because the Canaries is an autonomous region that can make its own laws.
Somehow I can't quite see this working in Fuerteventura. We have lost so many flights, by next summer there will be a huge drop in tourist numbers - who in their right mind would want to invest in that? Investment returns on cheap holiday apartment rentals are already very low. Prices are being squeezed down by the increase in flight costs. IGIC tax increases are biting into any remaining profits and once you add in paying a sole agent to run a 24hr reception and your loan repayments to upgrade the complex there will literally be nothing left. This is not a business model it is more an anti-business model.
And what about the many, many local people currently living in these dormant touristic apartments - some of them owners. Will they be forced out onto the streets?
peejay
Very well put.
The main objective of the new law is to modernise tourist resorts and incentivise the development of more 4 and particularly 5 star hotels. Basically hotel owners can access cheap funding to upgrade their hotels. Many are already doing this in Tenerife and Grand Canaria. There is more money to be made in so-called 'high quality' tourists than the mass market tourism of old. It has just been announced that BA are going to be flying 5 times a week between London and Tenerife, including business class seats, so they have been working on this strategy for a while. To go more upmarket they are wanting to redevelop the old tatty tourist complexes originally built in the 80s and 90s. Many of these are now full or part residential. They want to knock them down and replace them with something nicer, or open up the space to avoid all the building congestion.
One of the main issues for us though, is that we are not Tenerife. We do not have flights from BA, we hardly even have flights from EasyJet and Ryanair. We do not have tower blocks of dodgy apartments taking up valuable tourist land. Our planning was more planned in the first place, so we do not have these monstrosities. Also, we do not have a shortage of development land near the coast. There is plenty of room to build new tourist facilities and theoretically it is possible to transfer the number of beds from a dormant touristic to a new plot of land and build a very nice new hotel. Trouble is the way the draft law is currently written, you can only do this if you demolish the dormant touristic complex first. For Fuerteventura this would mean knocking down loads of perfectly acceptable low rise buildings, happily lived in by owners and tenants. Absolutely crazy.
Quote from: peejay on November 07, 2012, 16:14:11 PM
For Fuerteventura this would mean knocking down loads of perfectly acceptable low rise buildings, happily lived in by owners and tenants. Absolutely crazy.
Couldn't the properties be changed to permanent residential?
The new law intends to stop this, as the government believes that the residentialisation of tourist complexes, pushes tourism into the outskirts of resorts. They are renewing the moratorium on building any new tourist accommodation and making it permanent - so that no new land is eaten up by tourism, apart from 5 star hotels - they are allowed. The law is designed to force the redevelopment and rehabilitation of existing land zoned for tourism, in some cases unfortunately with a dormant touristic sat on it.
Not just in Spain. 170,000 under-used Holidays Homes in the UK could be siezed back by Councils.
http://www.dailymail.co.uk/money/mortgageshome/article-2229840/Councils-able-grab-used-holiday-homes--GMB.html (http://www.dailymail.co.uk/money/mortgageshome/article-2229840/Councils-able-grab-used-holiday-homes--GMB.html)
I particularly enjoyed the first comment 'Section this idiot . . .' (not you Woe!)
I guess the difference though is that people are actually living on our complex, it is not empty most of the year.
I had a meeting with a solicitor in UK last week to discuss a potential purchase in Cornwall.
He informed me that a case has just gone through the courts, where an owner in England was letting out his property for holiday lets. It has been deemed 'illegal' and the owner needs to apply for 'Change of use'. In other words, it looks unlikely that you can now let out your home in the UK for holidays, unless you have planning permission. The next step is that holiday homes will have to pay Business Rates.
:( >:(
Quote from: SurfJames on November 11, 2012, 10:35:39 AM
<snip>
The next step is that holiday homes will have to pay Business Rates.
:( >:(
And why not?
I have never understood why second home owners - who obviously are in the more prosperous part of society - should get away with paying reduced property taxes.
Quote from: SurfJames on November 11, 2012, 10:35:39 AM
I had a meeting with a solicitor in UK last week to discuss a potential purchase in Cornwall.
He informed me that a case has just gone through the courts, where an owner in England was letting out his property for holiday lets. It has been deemed 'illegal' and the owner needs to apply for 'Change of use'. In other words, it looks unlikely that you can now let out your home in the UK for holidays, unless you have planning permission. The next step is that holiday homes will have to pay Business Rates.
:( >:(
[/quote
Properties in Cornwall are facing the same compulsory purchase orders that may be in the pipeline for Fuerteventura too. http://www.guardian.co.uk/money/2011/oct/08/compulsory-purchase-cornwall-empty-homes (http://www.guardian.co.uk/money/2011/oct/08/compulsory-purchase-cornwall-empty-homes)In one way I can see the bigger picture and agree with the new Canarian Governments proposals because they would benefit the Island in the long run....but as a home owner who is likely to be affected by this .....I feel like a fool for ever buying on the Island. I want out and the sooner the better. The Island is a wonderful place to live.....but I still believe that long term renting is a better option in most cases. Who knows what kind of land grab laws could be on the way?
phillip says:
14 November 2012 at 12:45 pm
I met with a well respected and knowledgable Canarian Lawyer yesterday and he told me in no uncertain terms that this legislatation was not and could not force an owner on a touristic complex to let their freehold apartment out or indeed not live in it if they wished. He said there was some hysteria at the moment about some aspects of the new law but any government who attempted to deprive people of their apartments in such a manner would not only be acting unlawfully but also would be committing political suicide in the current climate. He cited the demonstrations outside the banks in Santa Cruz as an example to support this. I did ask him if there could be restrictions on Escrituras that made this easier fot the government to enforce and he again replied not.
No doubt there will be many other legal opinions on all this but I do know that he has contact with the authorities (and Janet) on a regular basis and I am taking some comfort in what he has said at this stage.
He did mention the current situation with the fines etc and there is no doubt in my mind that without alotca (Janet included) things would be a lot worse!
It is clear that sole management is an important part of the legislation and all I would like to see is regulation of these so that owners are in control of their own apartments' use and that they receive a decent return on the investment if they do choose to rent.
I fear it will be a 'watch this space'situation for some time to come!!
Cut and pasted from Janet Anscombe's website.
Quote from: woe10 on November 08, 2012, 16:20:37 PM
Not just in Spain. 170,000 under-used Holidays Homes in the UK could be siezed back by Councils.
http://www.dailymail.co.uk/money/mortgageshome/article-2229840/Councils-able-grab-used-holiday-homes--GMB.html (http://www.dailymail.co.uk/money/mortgageshome/article-2229840/Councils-able-grab-used-holiday-homes--GMB.html)
Good news for Suffolk - Look at the prices of Houses in Aldeburgh and Southwold compared to the surrounding area . Youngsters born in the town have no chance of buying in their home town . Hugo 's Henry's Henriettas's and others are taking over .
Quote from: jg on November 11, 2012, 21:41:31 PM
Quote from: SurfJames on November 11, 2012, 10:35:39 AM
<snip>
The next step is that holiday homes will have to pay Business Rates.
:( >:(
And why not?
I have never understood why second home owners - who obviously are in the more prosperous part of society - should get away with paying reduced property taxes.
And what makes you think all second home owners are rolling in it?
We are certainly not in the prosperous society ,we live in a 3 bed mid terrace and drive a 10yr old polo ,we work bloody hard and long hours and make sacrifices to enjoy our second home and other holidays abroad,so to be honest i take offence to your ar*ehole of a remark
Hi Roar,
I couldn't agree with you more. We like you have worked our a**e off to have our home in the sun. We have worked 12 hour days, 7 days a week for bloody years to be able to afford to do this, we didn't sit on our a**e's watching TV waiting for the next hand out. The thing is with some people, if it isn't given to them on a plate they just love to knock people who have grafted for what they have.
Apologies now for going on like this on this thread..........some things just wind you up!!!!
Mawbeef >:(
Couldnt of put it better ;D ;D
This is an entirely different situation to that in the UK. Foreign investment and holiday home ownership has been encouraged. But it has been left in a mess in terms of what type of property can be let to what type of person ie tourist or resident. This legislation seeks to bring clarity and sort out the uncertainty. Unfortunately, the way it is written has raised various alarm bells. A straightforward translation of the words is therefore not that helpful and we will have to wait for a proper legal interpretation of the law and hopefully, through the parliamentary process, they may adjust the wording of some of the most confusing bits. I'm sure like most property owners on the islands, I am not swimming in cash, I bought a little place here because I love it, have done since I was 19. So comparisons to toffs in Suffolk is somewhat wide of the mark! If I had that much money, what on earth would possess me to buy here on this scruffy rock!!!
The Canarian Parliament today approved a temporary extension of the moratorium until late May 2013 at the behest of New Canary (NC). All parliamentary groups supported this proposal justified by the need to have sufficient time to proceed with the study and approval of the bill for renovation and modernization of Tourism Government of Canary Islands.
This debate took place through an amendment, signed by all parliamentary groups, who wanted to avoid a legal vacuum that could occur between the close on 13 December and until the entry into force of the future standard of renovation and Tourist modernization, which has to deal with in Parliament.
So, they have another 5 months to work on the draft tourism law. Let's hope they come up with something better than the first version.
If there is any doubt then always take the safe route. Many expats, not just the British, attempt to "bend" the rules. When they a caught a large fine is imposed and a lien put on the property, just like unpaid taxes. Then when they come to try and sell the property they discover their indebtedness! It seems in these cases that you are guilty unless you can prove yourself innocent and the fine is automatic
Sadly many estate agents and letting agents keep these fact from prospective clients - just have a look at some of the current agents web sites. "Excellent Rental Potential" appears on so many of their advertisements, even when there is no license in place and probably never will be.
If in doubt always consult a qualified and recommended Canarian lawyer, the money spent will be returned many times
Also look out for "Management Fees" as these can escalate as complexes become less and less inhabited and there is no control over the increased costs as time passes. Unlike the public purse where "the government" is expected to find the cash - someone has to pay if the complex is to be kept up to scratch!