Crackdown on illegal holiday lettings

[jriddler@hotmail.co.uk]

Just a thought and I'm not really sure if this can be done but I know of a company in the Northeast of the UK who act as an agent (my brother is one of their clients) for property owners who wish to rent out their properties (in the UK) on a SHORT TERM RESIDENTIAL BASIS. This can be anything from a few nights to a few months. The properties are usually high end apartments (Newcastle Quayside etc) and rented by clients visiting the area who dont wish to be accomodated in a hotel with tourists (popstars and the like!).

[TheCooler]

What is the tax rule on income earned on an overseas property?
Is tax paid in the uk or in Spain?
Are you allowed certain allowances against wear and tear , repairs etc?
Its a minefield.
Can anyone clarify the situation?

[fifi]

Small update from Janet Anscombes blog. http://www.janetanscombe.com/news/contact-details-for-the-tourism-inspectors.html Still no date confirmed for the meeting.

To answer The Cooler, you are allowed to deduct repairs etc. You are supposed to pay tax on any earnings that you make from letting your property out. When the property is not being let out you also pay the "non letting out tax" for that period of time.

[emmi]

This "non renting tax" is crazy.  If you don't have a licence, then you are not supposed to rent your property.  But they are not giving out licences.  Therefore, how can they insist on a tax payment for something which, according to them,  does not exist?

Surely that's "illegal" in itself?  Or is there something I am missing.

[Cameron]

No its them thats missing it. Advice given on here some time back intimated you're a mug if you pay it.True or not i'd love to know how it would stand the test in a European court of law.

[gusangus]

TheCooler
Member



United Kingdom
9 Posts
 Posted - 13 January 2012 :  18:02:13
--------------------------------------------------------------------------------

What is the tax rule on income earned on an overseas property?
Is tax paid in the uk or in Spain?
Are you allowed certain allowances against wear and tear , repairs etc?
Its a minefield.
Can anyone clarify the situation?

taken from Janet Anscombes site
and since, as I say, any tax in Spain goes to the national government, it will also be of no avail to say that they pay their taxes, and this is even more so if the tax goes to the British government.
http://www.janetanscombe.com/news/inspectors-to-find-and-fine-owners-of-residential-apartments-who-let-commercially.html/comment-page-1#comment-12985

[Black 5]

I wonder where the idea that there is a tax for not renting out a house started.
There is a tax "income tax" most country's have one. It pays for the army,navy and the government wine cellar etc. As the most likely source of income for a non resident is from legal letting then thats what you pay tax on. If you do not have an income, the services of the afore mentioned worthies do not come free so you have to pay a notional income tax based on the catastral value of you property. Simples[]

P.S. I do not want my neighbors to rent to to tourist.I live on a residential street not a holiday complex, having to chuck little Johnny's ball back every 5 mins whilst choking my way through the burnt BBQ smoke aint my idea of a good time.[]

[emmi]

quote:If you do not have an income, the services of the afore mentioned worthies do not come free so you have to pay a notional income tax based on the catastral value of you property. Simples

That's what is known as "IBI" in Spain and "council Tax "in the UK.
the "non Renta" tax is additional.  If you own a house in Spain but DO NOT RENT IT OUT AT ANY TIME, they expect you to pay a nominal tax for that pleasure!

[Black 5]

Emmi, I am not an expert in Spanish tax law , I am not even a beginner. I was told by someone who I belive knew what they were talking about that the IBI is as you say for your local council to spend on whatever projects they deem fit.
Your income tax or payment in lieu is for national goverment to spend on bigger things - like ships and fighter planes, something I hope La Oliva have not yet budgeted for.[]

[emmi]

I have no problem with paying taxes on any EARNED income I have received.  But I do have an issue when it comes to paying any kind of tax for which I have NOT RECEIVED any income. If they need more money for ships and fighter planes, then they should be encouraging more tourists by way of licensing properties for rental etc as discussed above.  More tourists, equals more spending, equals more taxes by way of VAT/IVA etc etc......it is not rocket science.

[Black 5]

Emmi , I totally agree with you that paying tax on unearned income is unfair. I have written to Mr Cameron and told him I object to VAT and petrol tax and booze tax and stamp duty and flight tax and insurance tax and a whole lot more taxes that have nothing to do with my income or lack of it , would he listen!
In the end the tax man rules , he is unbeatable. If he catches up with you for non payment of taxes it will be very unpleasent.

I would hope that licences for holiday rentals are never granted on residential developements, it is very unfair on the people who live there.
As for rocket science that is easy , the Yanks managed to put a man on the moon but cannot balance their budget nor can we or most of the western world (Germany excepted).
So pay up and smile[}:)]

[appy ammer]

Black a lot of water has passed since the moon landing, namely Bush, now get back to the subject.

ps can i ave me ball back mister;)

[cockney]

Where has the idea of 'letting licenses' come from. You don't need a license to let your property.

[Cameron]

thats the sort of talk i like to hear. could you elaborate on that statement?

[Black 5]

appy
NO! not unless you agree to lose a few games.

P.S. I have some very nice licences for sale - cheap €1000 each. installments available (one)

[cockney]

quote:Originally posted by cockney

Where has the idea of 'letting licenses' come from. You don't need a license to let your property.

Law 7, the tourist law that came into force about 15/20 years ago has some 54 clauses and a few concern letting. Basically if you own a villa or similar property that has it's own entrance then you can let that property and advertise the fact. However, if your property is part of a complex then the decision has to be made by the owners as to whether that complex is residential. If it is then you cannot let other than to family and friends without charge. If your complex is deemed to be a tourist resort then your individual property can only be let through the single agent/company that is empowered to do so. I don't remember any mention in the original text of licences.

There have been disputes by the larger holiday companies complaining that it is unfair for a single company to have sole control on letting but I do not know whether this dispute has ever been tested in the court.

[Cameron]

music to my ears cocker. So where did all this license business originate from then and why?. As with a lot of these strange Spanish taxes you wonder how legal they are, a case in point being the much discussed non resident non rental tax.It always struck me as odd that you would have to fork out for letting someone in your own well paid for front door and even odder you still paid if you didn't..

[emmi]

quote:and even odder you still paid if you didn't..

Too right - I've a real bee in my bonnet about this one!  What's the penalty for not paying it, which I am inclined to do - NOT pay it I mean!

How would they know if it was not paid, as I understand, they don't claim for it by sending one a form, it seems to be a "voluntary"
submission of taxes.  Or am I misunderstanding the situation?

If you start to pay it, then they know your situation, so then you are in the system.  If you don't pay it then you are not in that particular system and as I understand it there may be something going on in the European Parliament about getting this STUPID tax repealed.

[gusangus]

taken from Janet Anscombes site
Update 7 September: In respect of the private villa situation, I have had another meeting this morning with José Escobedo. The upshot is not good news.

Firstly, the Ayuntamiento has rejected any proposal to change the classification of land to mixed or touristic. Secondly, however, it wouldn't matter if they had agreed because Turismo has said, explicitly and emphatically, that under Ley 19, 2003, there is a moratorium on touristic licences which prohibits the grant of any licence other than to 5 star hotels.

http://www.janetanscombe.com/news/inspectors-to-find-and-fine-owners-of-residential-apartments-who-let-commercially.html

[Cameron]

ah yes those same licences that there is no apparent mention of in cockers law 7. What a tangled web we weave.

I think this question has been put before. Is there anyone here who has actually been prosecuted or fined for not having a licence. Not a friend of a friend, heresay, rumour or from a magazine article, just themselves personally.

be interested to hear their experiences if anyone has.

[gusangus]

they are not being fined for not having a licence the fine is for not having an Inspections book or a reclamacions book 9000 for each offence  although one person ended up with a 48000 fine I guess this must have been a second  offence

http://www.gobcan.es/boc/2012/025/012.html

[Cameron]

trying to establish who 'they' are.
I'll rephrase the question then to... has anyone on here been personally fined for not having said documents?.

[Cameron]

quote:Originally posted by Cameron

trying to establish who 'they' are.
I'll rephrase the question then to... has anyone on here been personally fined for not having said documents?.

Hmmm not exactly queueing at the door with tales of rental injustices.Can only assume either folks are a little apprehensive of putting thier experiences with the authorities on a forum or its not actually happening at the tidal wave rate we've been led to believe . Maybe give it a while longer and one might turn up.

[gusangus]

It appears that most of the fines so far issued have been on the western islands to that end the authorities have opened a second office that will deal  with the eastern islands  Gran Can,  Fuerty & Lanzarote some fines have apparently been issued on Gran Can as I have seen  boletins issued for there, so it,s just a matter of time, with the amount of money that can be raised it  will be when not if as some people seem to think.

[trebol66]

Most of what I have seen relates to Tenerife, which seems a bit odd.

Where have you seen reference to a second office being opened?

I haven't seen any that have been issued on Gran Canaria, but maybe they have just been swamped by those on Tenerife.

One community in Caleta is to change from residential to touristic. I am surprised that any community could get the unaninimity required for that change.

[Cameron]

Originally posted by gusangus

It appears that most of the fines so far issued have been on the western islands to that end the authorities have opened a second office that will deal  with the eastern islands  Gran Can,  Fuerty & Lanzarote some fines have apparently been issued on Gran Can as I have seen  boletins issued for there, so it,s just a matter of time, with the amount of money that can be raised it  will be when not if as some people seem to think./quote]

As far as revenue gained from such fines goes i'd be inclined to think it won't be as much as would be gained from a well run licence system with year in year out contributions. They may well get a few big hits to start with but it will all dry up sooner or later when people get wise or are forced to give up renting. So what then? No more dinero for them thats what.

I also have to wonder which holiday destination will get lucky with the thousands of private renters who would have gone to fuerteventura if the properties that were now not trading were available? Our islands loss will be thier gain.

[fifi]

The Lawyers advice is being heeded about quoting the Urban Letting Law. Have a look at this advert.... http://www.holidaylettings.co.uk/rentals/caleta-de-fuste/193524

[Cameron]

Whats the difference between a residential short let and a touristic short let?.I don't see how it conforms..... its short and its to non family and friends. Any idea which lawyer advised it fi and how will it make a difference?

[fifi]

Jose Escobedo was one of the Lawyers mentioned. Have a look at his blog posts. http://www.escobedo.net/

I think that the idea really was to just not mention short lets or anything Touristic by nature inorder to delay being caught because they then have to prove that you are letting for a shorter period than 3 months and also offering a Touristic service. You can legally let a Residential property for three months or more. The add from Holiday lettings mentions short stays though which I was surprised to see.

[Cameron]

Ok thanks.just read it again and they state it conforms about 4 times in the ad. They obviously think it will make an impact on someone.In truth i think most folks are so confused by all this nonsense they don't know if they're coming or going.