Good news for Holiday lets.

[ashworth]

Big Win On Private Lettings
The supreme court has ruled that the proposed new letting law should not contain the clause restricting owners of properties in tourist areas from applying for a licence for short term letting. In the ruling they stated that the clause was “contrary to the principle of freedom of enterprise guaranteed by the Spanish constitution

[Charlie dont surf]

Do you have a link to this news?

[Charlie dont surf]

I found something myself regarding the Supreme Court ruling in Dec;

https://www.janetanscombe.com/news/monopolies-commission-calls-on-canarian-government-to-remove-restrictions-in-vivienda-vacacional-decree.html/comment-page-1#comment-540029

It only affects private letting in 'Tourist Areas'. A while back I recall seeing a map of the island with these designated tourist areas and there were only a few on the whole island. In other words, most private letting will be deemed illegal, even after the Supreme Court ruling.

[fatherted]

https://legalandtaxhelp.com/legal-news-spain/06-2018/holiday-lettings-spain-tax?fbclid=IwAR3iDNLjlrhKX4LnNXBn0plZ5ITQfjJioh9z90f7p-FmdxOwVAu_N4KzsR4

[ashworth]

June 2018 things have moved on since then.

[Charlie dont surf]

The link posted by fathered is relevant and relates to Income Tax and the fact that anyone advertising on a Holiday Lettings platform (Homeaway, Airbnb, Booking.com etc) will have to provide the Spanish Tax office with their name and UK address as well as the Cadastral details of their property. Anyone who does not provide this info will not be able to advertise on the Holiday letting sites above.

The issue you are talking about is regarding 'Tourist Licences' required to be able to legally let a property for short term stay. The Authorities will not now be able to deny a licence if your property is within a 'Tourist Area'

If your property is not within a Tourist Area then you cannot get a Licence to let short term or advertise your property to let on any of the above websites.

This is going to severely restrict Short term (Holiday) Lettings of property across the island. Something the Hoteliers have been lobbying for some time and they now appear to have got their way.

The Good news is more property available for Long Term Let for people who work on the island and cheaper properties to buy.

[Ivemovedon]

Doesn't sound too good for places like Lajares then. There's a few bars and restaurants there that rely on customers from rented accommodation to keep the business going.

Local custom and those passing through may well not be enough.


Still as long as the big hotels are OK that's just fine..

[Charlie dont surf]

When you consider how the industry has grown over the past 20 years there's a case for arguing that Private holiday lettings need to be regulated and controlled. A few years ago I recall seeing a map produced by La Oliva Ayuntamiento that showed designated areas (with clear boundaries) in Corralejo and El Cotillo that were either tourist or residential. This protects Locals and residents and creates specific areas for tourist accommodation. Why would this not work? Somewhere like Lajares would still survive. 20 years ago it was doing ok with a couple of bars and a few shops. I remember it being a bit more authentic too. Before endless kite surfing shops sprung up. Look at the place now. A tourist resort that should never have been.

[Ivemovedon]

There was nothing in Lajares until tourism dictated otherwise. Couple of spanish owned restaurants, Los pinchitos, los pirates with not much trade. There was also at the time a well detectable animosity towards foreign customers with a touch of arrogance thrown in. I found that quite endearing.  No shops that I can remember and the supermarket was a dingy little place which also catered as a ferreteria of sorts.It seemed like a throw back to the sixties with the main occupants appearing to be aged hippies.   . dreadlocks were the order of the day. I wouldn't call it a tourist resort now by any means, as even now apart from a bit of Live music in Canela cafe it isn't exactly a nightlife hotspot. Thankfully ownership has changed for the better ( and the friendlier) along with the realisation that that is where the money is. Bit daft biting the hand that feeds you.

Can't imagine anyone owning a business there would want the authentic Lajares of 20 years ago. There's not much money in authenticity. Or the pockets of penniless hippies.

[spitfire58]

Anyone got an up to date copy of the map showing the touristic areas that they can post ??

[fourthwisemonkey]

The supreme court ruling has basically decreed that the restrictive law on letting for tourism purposes is illegal and against the spanish constitution. In effect it now means you can apply for a licence to let for touristic purposes even if the land classification is tourist or mixed (tourist/residential)
Prior to this the only places you could (easily) get a licence were in areas classified as residential where you could declare a Vivienda Vacacional (VV). Or a Casa Rural
It was possible to get licences elsewhere but extremely difficult.

Yes anyone that gets licenced will have to submit modelo 400 etc and will be liable for tax on earnings (as they should be). Obviously the long term aim of associations such as ASCAV etc is that there should be a standardised model for letting (logically far more sensible than having numerous different types of licence).
It still remains to see how awkward the authorities will be (as they are still being influenced by the hotel lobby)in the processing of licences and what extra restrictions they will try to sneak in (ie Santa Cruz ayuntamiento decreeing that even if qualify currently for a VV then also the property must be on one level, have own access (ie not in a gated community), be at least 10 years old and they are even trying to bring in a rule that the property is actually a business so the owner must be registered autonomo....again this is to be challenged through the courts.

By the letter of the law virtually anyone should be able to let their property for touristic purposes. Probably the only places that cannot are if a community currently has a ruling for the community expressely stating that this activity is not allowed (and a community cannot bring this rule in retrospectively without a 100% yes vote from all those that attend the AGM/EGM which obviously will not happen as the owner wanting to rent would simply cast a no vote)

For those of us that do rent out legally, pay the relevent taxes etc this is a good thing as hopefully it will level the playing field. Personally I think it will not adversely affect the long let market as there are going to be quite a few properties that are currently illegally let for tourism which will not be able to compete legally so will end up becoming longer lets (bit easier to fiddle the tax on a long let ). What may affect the long term rental market is the new law regarding contracts etc where the rental period etc is now 5 years...so even more biased toward the tenant.

As an aside, if the property is a registered licenced tourist let VV etc then if your calendar is blank and hence you have no guests and you should happen to get squatters then legally you can turn off the water and electric as the regulations are different for a tourist property compared to a residential property. Generally the squatters will move on then or probably as they are all too aware of the laws, will not even enter in the first place.

[fourthwisemonkey]

I have the original cabildo map from before it was removed from the website but it is a BIG file so could not post it. They may have rezoned some areas but think not although nothing to stop them using sneaky tricks like that to complicate licence applications. Goalposts have moved a little even since I did my VV

[ashworth]

The supreme court ruling has basically decreed that the restrictive law on letting for tourism purposes is illegal and against the spanish constitution. In effect it now means you can apply for a licence to let for touristic purposes even if the land classification is tourist or mixed (tourist/residential)
Prior to this the only places you could (easily) get a licence were in areas classified as residential where you could declare a Vivienda Vacacional (VV). Or a Casa Rural
It was possible to get licences elsewhere but extremely difficult.

Yes anyone that gets licenced will have to submit modelo 400 etc and will be liable for tax on earnings (as they should be). Obviously the long term aim of associations such as ASCAV etc is that there should be a standardised model for letting (logically far more sensible than having numerous different types of licence).
It still remains to see how awkward the authorities will be (as they are still being influenced by the hotel lobby)in the processing of licences and what extra restrictions they will try to sneak in (ie Santa Cruz ayuntamiento decreeing that even if qualify currently for a VV then also the property must be on one level, have own access (ie not in a gated community), be at least 10 years old and they are even trying to bring in a rule that the property is actually a business so the owner must be registered autonomo....again this is to be challenged through the courts.

By the letter of the law virtually anyone should be able to let their property for touristic purposes. Probably the only places that cannot are if a community currently has a ruling for the community expressely stating that this activity is not allowed (and a community cannot bring this rule in retrospectively without a 100% yes vote from all those that attend the AGM/EGM which obviously will not happen as the owner wanting to rent would simply cast a no vote)

For those of us that do rent out legally, pay the relevent taxes etc this is a good thing as hopefully it will level the playing field. Personally I think it will not adversely affect the long let market as there are going to be quite a few properties that are currently illegally let for tourism which will not be able to compete legally so will end up becoming longer lets (bit easier to fiddle the tax on a long let ). What may affect the long term rental market is the new law regarding contracts etc where the rental period etc is now 5 years...so even more biased toward the tenant.

As an aside, if the property is a registered licenced tourist let VV etc then if your calendar is blank and hence you have no guests and you should happen to get squatters then legally you can turn off the water and electric as the regulations are different for a tourist property compared to a residential property. Generally the squatters will move on then or probably as they are all too aware of the laws, will not even enter in the first place.

Well said Sir............

[fourthwisemonkey]

You do not need a licence in UK but do have to jump through a lot of hoops health and safety wise...admittedly probably most of those hoops were created by european law. Perhaps if things were a little more controlled in UK there would be a lot less rogue landlords. I personally have no problem with SENSIBLE restrictions that provide security for both tenants and landlords. That is why especially touristic letting should be controlled so whether you rent a 1 star apartment or a 5 star villa there should be a minimum safety standard and expectation. Stupidly the most common licence (VV) makes no stipulation on fire extinguisher/smoke alarm, electrical standards etc. Basically only indication that the house is not a beat up wreck is you have to submit a few photos.

Personally I would include a caveat in the licence that if you were not permanent resident on the island and hence were employing a management company then their details should also be provided (more income for the taxman and again security for both owner and guest as there would be legal address if anything was wrong)

[Charlie dont surf]

The new requirements are going to have a massive effect on the holiday lettings market in the Canaries, especially in Fuerteventura. I'm certain most people who advertise on sites such as Homeaway and Airbnb don't have either a licence or declare income to the Tax man. Take somewhere like El Cotillo where there must be well over 100 properties advertised and yet I've only ever seen a couple of VV signs. Already there's a huge increase with people advertising their properties to rent on social media sites. Desperation and panic are already kicking in.

[fourthwisemonkey]

@CDS
Probably are plenty illegally let. Do note though that just because there is no VV plaque does not mean they do not have permission. When you go through the VV process it is not a request for a licence it is actually Declaracion responsable de inicio de la actividad de explotacion de una Vivienda Vacacional. ie you are stating that you are doing the activity and stating that you comply with the relevent regulations. Basically you submit the form along with tax info and the proof that the land is residential (uso del suelo) etc etc and then this is processed by Tourismo at the Cabildo. Eventually you get a permit number for the VV plate and you get the plate printed....this can take a long time (some people been waiting over a year as there was a lot of submittals around the same time).
HOWEVER from the point where the correct paperwork is entered at Registro....you are legal even though you do not yet have the VV plate and number. Obviously if inspected you would have to show all the submitted paperwork which is stamped by the registro. Also you would have to show proof that you are registering all guests with the Hospederia (Guardia Civil registro de viajeros). (in accordance with ORDEN INT/1922/2003 de 03 de julio)

That last bit is often overlooked even by those who have VV plates etc. Multa for not doing it is up to 30,000â,¬ and they are checking!!

[Charlie dont surf]

Interesting. Many thanks for explaining the process for obtaining VV. Would be interested to know the percentage of people (advertising on Homeaway, Airbnb & Bookingcom, who have followed that procedure. Call me a doubting Thomas but I'd put a guess at less than 20%.

[fourthwisemonkey]

Looking at the cabildo original map and then at the letting sites (airbnb et al) it would be fairly simple to get an accurate percentage that do not have licences as of today (there are exceptions because as mentioned there are some strange licences out there ie beach front property in Corralejo centre with a permit!!). I think a lot were scared off initially but now the fuss has died down who knows. I know of several that are actually declaring everything to the hacienda but simply could not get a licence because were in a tourist zone....the court case means many of them can now try to get a licence and become 100% legal).

There will always be those who will operate outside of the rules as they do not want to pay tax etc, usually also employing ´black´labour but hopefully the tourismo inspectors can go for those now as they in theory will be out of work once all the correctly operating landlords get permits/licences whatever....good incentive.....and eventually the taxman catches up with everyone. Ask Al Capone

[Charlie dont surf]

Owners who advertise on Homeaway, Airbnb and bookingcom have until 11th Jan to provide NIE or passport number and Cadastral Ref of their property to the Spanish Taxman for Income tax purposes. You would assume they might then be sneaky and cross reference this info with the Licensing Authorities. Could be double trouble for those letting illegally. Will be interesting to see the effect this has on the amount of properties advertised on the above sites. Also, what action will be taken if they don't provide the info requested.

[Ivemovedon]

On a lighter note the Canaries are in talks to axe the 7% tourist tax post brexit, commonly known as the Indirect General Tax.

I take it that's the one you see on restaurant bills and such like.

Don't shoot the messenger.

[Charlie dont surf]

 Thats the tip covered then

[bookman]

Much as I would not advocate anyone breaking the law. Can anyone explain how, take Airbnb , will the Spanish authorities
compel an American based company to conform to their reg's.
At the moment some American city's ( NYC San Francisco) find
American courts unwilling to force Airbnb to share the necessary data about their customers in America.

[Charlie dont surf]

https://anfitrionesresponsables.com/faq_english.html

[COPPERS]

What does not make sense to me is that if you rent out your property on Fuert and are paid in English Pounds and you declare to the IR, are they saying you have to pay double tax?  What happened to the 'double taxation agreement' ?

Generally a complete mess as usual!

[Charlie dont surf]

How many owners do you seriously believe declare income earned on their Spanish property to the UK taxman?

Those that do will not be liable to pay Tax twice so have nothing to worry about. Those that don't will probably now be thinking of doing so, pronto.

Reminders have been sent out today to remind owners they have until 11th Jan to provide the Required info to the Spanish Ministry of Finance. I have been reliably informed that the Advertisers (Homeaway, Airbnb, bookingcom etc) will be freezing the accounts of Owners who do not comply.

[fourthwisemonkey]

Double taxation agreement stands but the Hacienda is more than likely going to want to see proof of the declaration in the UK.
Certainly part of the VV process is the submittal of modelo400 (ie registration for IGIC) this has to be done even though you may not have to charge IGIC in the price. (depends on ownership of the property and gross income from the property etc)

[Stone Free]

Double taxation agreement stands but the Hacienda is more than likely going to want to see proof of the declaration in the UK.
Certainly part of the VV process is the submittal of modelo400 (ie registration for IGIC) this has to be done even though you may not have to charge IGIC in the price. (depends on ownership of the property and gross income from the property etc)

If income from rentals is very low, would I be right in thinking that registration for IGIC is still compulsory?  In the UK, registration for VAT is only required if annual  turnover is more than £85,000.

[fourthwisemonkey]

You have to complete modelo 400 (register igic) even if you do not pay it. Rules are a bit weird in so much that a joint ownership between married couple or sole ownership then it is igic exempt however if owned by unmarried couple or say mother and son or whatever then you do have to pay igic. Still have to register but you state on the factura that you are igic exempt.
Most likely a job for the accountant who can explain better.
Same ruling I suppose as an autonomo who earns less thane 21k year. Has to register for igic but does not bill it.