Counting the Costa Renting

All,

As a business, I know it may seem we keep 'drumming' this issue into people intending on Renting / Letting a property on SADM but again it's reared it's ugly side in the Nationals and overseas publications. Following is an extract from The Telegraph which indicates how the Spanish (and British) Governments are clamping down on 'un-licensed' properties for Let. Unlike the fall in Construction Company's share prices and licenses etc, this is nothing to be worried about as long as you have done your homework and run your property letting as a small business. We have made a lot of friends through this Forum and i personally would hate to see anyone fall foul of this in SADM.

Again, nothing to worry about but we'd sooner bring this to your attention than you go into the Letting market blind of the focus.

Regards

Darren & Michelle

Hi Daren,

You have come up with an interesting point.  A lot of people may plan to invest in SADM because a rental guarantee covers the mortgage.  Is there any restrictions on renting on this site either through a managment company or as an individual to family and friends?

We are told to expext to pay  tax on rentals to Spain & even the UK, if the license to rent is not in place would it deter people investing, even pulling out.

If so this will effect Spains economy, how much are they  making in development projects, Agents, solicitors, developers and building workers are probably dependant on the trade.  A lot of people make their money in the building buisnes, so the Spanish should not get heavy handed.

As soon as something looks good the govenment think they can get a larger slice of the pie.  I have 4 buy to let properties with happy tenants. Now I have to pay into the govenment scheem for landlords, and insure the tenants deposits.  How am I going to cover the cost/  Increase the rent, the tenant has to pay more,  I have to do more paper work and some one up the line makes money for nothing.

New regulations for houses of multiple occupantion, new rules and regulations costing the landlord thousands of pounds. Another government stroke to protect the tenant?  The result higher rents, or sell the property and tenants are homeless.  So wher are the new council houses at afordable prices.

When govenments interfear and get greedy things colapse.  I'm glad to be leaving.

send me your thoughts, why are so many Brits leaving?

Recardo

Recardo,

It is purely the tip of the iceberg and why we discuss it so often with our clients.

What homeowners are doing are creating their own 'mini-business', i.e providing a service for which they receive remunerations for, and thus have to pay all associated Goverment Tax and charges. If they intend to rent out for more than 4 weeks per annum, they have to be licenced with the Tourist Board and should go through some fair stringent examination to obtain their 'Tourist' mark. This includes Health & Safety, correct insurance and management, advertising and clear descriptions of the property and it's facilities......ie if it's not clearly promoted as 'non-wheelchair friendly' and a client turns up that cannot even get up the steps, guess who is liable ????, or in the worse case a visitor has an accident....who is liable...????.

We covered this in as a 'top-slice' in our March Newsletter and also brought to peoples attention the Contracts which have to be in place.....it's not a case anymore of a 'gentleman's handshake' and monies swapped. Again, if your weekly tenent decides to extend their stay 'illegally' and refuse to leave, who do you turn to, to get them evicted, in Spain they have legal rights to remain in situ....! If you go through an Agent or official body, you will set up an 'Arrienda de Temporado' which doesn't give the tenent these automatic rights to remain in residence.

There are a 101 issues anyone intending Letting will face and why we advise so often for people to seek proper Financial Advice from a Regulated body (not us). In short, if you are not registered, the UK and Spanish Government will track you down and expect you to pay....and you'll end up paying each of them!

We, ourselves, do not profess to know it all by any means, but by digging into this as a business, we've un-earthed a number of regulations that effect all of us.

Darren

Alm,

And i have to say with some naivety that I knew very little about the topic when you last posted and through that, I have personally delved further into it for our own benefit. Only now have I realised how stringent the Spanish are regarding Letting legalities and other related subjects and that we cannot just bury our heads in the sand and avoid the issue.

Darren

On a more positive note the same type of thing is in force here in the UK

and lets face it we all know this government has fleeced those who work to improve their quality of life

lets hope we all have a better life in Spain even if it costs a bit extra

Its quite interesting that the Spanish government are quite happy to charge all none residents 'Renta' (deemed letting tax) suggesting that everybody who owns a property as a second home will be gaining income from rent.  This to me would suggest that you are already given authorisation by default to rent your property, and yet they also want you to register your property with the tourist agency.

I totally understand the liability side, and agree each should treat the renting of their property as a business, however I do suggest that double standards and contradiction in terms are taking place in Spain.  If the governments and councils in Spain are not clear and careful about what they want and how they want to run it then many property investors will be having second thoughts (they are already) and the Spanish economy will begin to take a dive.

People are beginning to realise that the cost of buying in Spain, setting up mortgages etc and every little thing you do costs money and not everyone has unlimited funds.  Investors will be the first to realise that Spain is no longer the honey pot it once was, with over supply and overpriced properties leaving them with white elephants in the sun that they can't sell or rent (at least for profit).

I like Darren am determined to make a success of my business out in Spain albeit on a small scale, and if it takes forums like this to bring it to peoples attention and then show their feelings to the Spanish councils and governments then it can only make for a fairer market and fairer opportunies for all.  This happened with the Capital Gains Tax only this year so hopefully all the other illegal and underhanded methods which are said to be 'the norm' will gradually be brought to light and eradicated in order to make Spain the dream we all know it can be.

Regards,

Steve.

www.spanishvillacare.com

Darren, whilst I can accept your explanation, you obviously recall my query and comment on this matter some months ago, and the response to it by some, which surely, ignorance on the topic isn't a reason for the abuse shown at the time?

It does seem strange that if a subject is raised which people are ignorant to, it is always brushed under the carpet, until it becomes widely reported, then everyone has an opinion.

Glad to see that you tool time to look into the matter, for whatever the reason. 

Alm,

Absolutely agree, I too have experienced the backlash from people for alledgedly 'knowing too much' and it's not a nice place to be is it ! At the end of the day, all we try to do (and that is everyone) is share what information we have. Then when we clam up and don't share (as I currently do on another forum) we once again get accused of not sharing........as individuals we can never win. But on this Forum, I'm happy to pass on what I know at the cost of not being liked by some......not that this is a poularity contest after all.

I can only say, whatever information you have on this (or other topics), I for one would appreciate knowing.

Darren

Hi All.

Yes i agree with Steve that over supply in Spain and increasingly higher prices could eventually outstrip demand and people with mortgages who have invested to rent or sell on at a profit might get their fingers burnt a bit. The Spanish property market as Steve said is not the honey pot that perhaps it was say some 10 years ago and with so many new builds going on can only get worse as far as investors go. I think the Spanish are begining to reconise that if things carry on at the same rate in years to come their country could become as over populated on ratio as some other european contries like of course the U.K., thus affecting their quality of life. This is perhaps why i heard somewhere [ cant remember where] a good while ago, that the Valencian Council which Albatera comes under, will not grant licences to build there yet. They are basically trying to just slow the process down. It does perhaps make some sense and for those of us that want to make a new life in Spain, either to work or retire, although the weather will be the same, if it becomes too overcrowded with less and less beautiful open spaces and the other problems that could bring, it may not be as nice for the Spanish and also we may not be living the dream which we quite expected.

Sorry to rabbit on it was just a couple of thoughts that came to my mind. Having said all of that, Pauline and i are still excited about retiring there in the not too distant future and looking forward to a better quality of life.

             Bob.       

Hi

Although John and I aren't buying to rent, we still find it useful to know what is going on.  Some people may talk about scaremongering, whilst others may say people are burying their heads in the sand!  We are all adults, with minds of our own, so let's encourage people to say what they think and make our own decisions on what to believe.  Having said that, I have had great difficulty in coming to decisions on heating and air conditioning!

Sue