Letting in Andalucia, experience from elsewhere

As we know the regional Government of Andalucía, following in the footsteps of other regions like Catalonia, the Balearics, and the Canaries,   has just passed a decree regulating tourist rentals in the region,

I appreciate the regulations in different Regions varies, but I am sure It would be helpful to those affected in Andalucia if those living in the areas where regulations have already been in effect for some while would let us know their experience on this. 

Will be posting a translated version of main features of the Decree here along the day

Thanks Maria,I have read the main version but I wanted to know how the rules made in other Regions,  worked in practice in the other regions.

One thing I did notice was that the original referred to properties which were 'advertised or let through agencies, advertisements,  etc'.   So how would that apply to a property which was let, albeit as a tourist let, but only to people known  to the owner, or say by word of mouth ?      In UK law that wording would be significant.

According to recently passed Andalucia Law the situation that you describe, does not fall into the regulation of tourist rentals

costaluzlawyers

saferent

takelegal

wemovetospain

Hi Maria,

Perhaps you could give me some advice please. If I  register our property this year can I de-register it for next year?

I do not want to cancel all the  bookings we have for this season - but I will probably make it my last!

Thank you

Randolph

Yes, of course you can

María

Main features of a Tourism Rental:

• Tourism channels are offered:  travel agencies, brokers, organized tourist services and any other channels in which the possibility to book the accommodation is included.

• Property is located on residential land. Those properties on Tourism Land will not be licensed for a holiday home

• Lease is shorter than two months’ time

Properties which are excluded:

• House accommodation offered at no price

• For a period longer than two months´ time

• Rural houses

• Tourist apartments: (blocks of properties situated on Tourism land, under one sole management company)

Liability declaration

Before the property is promoted through tourism channels, a "declaration of responsibility" to the Regional Tourism department needs to be presented.

The minimum content of the declaration of responsibility will be:

• Property Details:  number of beds, according to Occupation License.  If there is no copy of the Occupation License, owner will have to request one from Town Council and if the license has not been granted by the Local Council, one will have to be requested, because it is a prerequisite for filing a declaration of responsibility. You cannot rent your property in the tourism market if there is no Occupation License.

• Information on the owner.

• Details of the person or entity that will operate the activity, and the contract allowing him to do so if the owner is a different person.

After the declaration, the Tourism department will request it to be included in the Register of Tourism of Andalusia.  Once the registration is made, a registration number will be communicated to the owner. This number will have to be made visible on any advertising material.

Prices of rentals will have to be placed anywhere in the home. Overcharging is prohibited obviously and charging for items different to those exposed or indicated on the tourism channels are not possible.

Price conditions, reservation, advanced payments and, where appropriate, cancellation shall be governed as expressly agreed between the parties, which in all cases will be detailed and publicized prior to contracting.

A proof of reservation document will be handed to tenants when they make the initial reservation payment. This document will express full price of the renting, advanced payments and penalties.

Important requisites

• The house will have to have occupational license

• The housing will have to be air-conditioned if rented from May to September, and heating if you rent from October to April (these requirements come into force on 12 May 2017, not May 12, 2016).

• Landlord will provide tourist information about the environment, health care, transportation, plane and guide shows.

• Telephone  number of owner/ manager will be available to tenant.

• Claims forms available.

• First aid kit available.

• Rental can be of the entire house or of some rooms. Rental of whole house cannot be of more than 15 seats.  Rental of rooms cannot exceed 6 seats. In any of the two cases, rooms can be occupied by more than 4 beds.

• Housing will have to be furnished for immediate use.

Responsibility

The responsible person before the Regional Government and the tenant/ tourist will be the person which, appears as in charge of the operation of the apartment in the Liability declaration submitted to Andalucía Regional department

Penalties

From 2000 to 150000 euros

Thanks Maria. 

That confirms my son’s decision to allow a friend to use his apartment at no charge, as a sensible decision.

I can see plenty of loopholes and grey areas, and further clarification being needed on many points for owners, but it's a good starting point! 

e.g. "Property Details:  number of beds, according to Occupation License." Does this mean number of bedrooms?  And does it refer to the licence of first occupation for the building? This may be available for newer properties (or not, as the case may be!) but for older properties built, say, in the 60s, did such a licence even exist then? 

Once owners have the Occupation Licence, they will need to know how to contact / locate their nearest Regional Tourism Department, who may or may not know anything about presenting a "declaration of responsibility". I suspect for many (most) this will end up being a job for a gestor, but any guidelines you can offer here would no doubt be welcomed, Maria. 

Questions welcome!

saferent

takelegal

wemovetospain

costaluzlawyers

This message was last edited by mariadecastro on 11/02/2016.

Hi Maria,

Thanks for all  your help.

At present, because we are UK residents, advertise in the UK and receive payment in the UK I have been paying tax in the UK.  I assume this will now have to change and we will need to pay tax in Spain. ( Am I right???)

I've been looking at all the information I can find and but there are different views on how often we declare and pay any tax due. Do we pay it annually when we fill in Modelo 210? Or monthly? Or quarterly. 

Thanks Again

Randolph

Yes, you will have to pay in Spain.

This link below may help you:

http://www.eyeonspain.com/blogs/costaluz/15326/legal-tip-1323-do-not-pay-vat-when-renting-if.aspx

saferent

takelegal

wemovetospain

costaluzlawyers

I think you'll find you should have been declaring it in Spain all along, and paying tax via your 210 declaration. The this can be offset in the UK under the double taxation treaty.

Nothing changes with regards to tax under these new regulations - except perhaps that those who haven't been declaring their income may come under closer scrutiny!

Oh dear! Now I'm worried. Methinks you are correct Roberto. We thought we were correct paying the non resident tax every year on the 210 form  in Spain and declaring the income in the UK. 

Nieve, perhaps - but not corrupt. 

Can the Spanish authorities now demand back-payment and levy hefty fines? 

For one - I'm out of this renting malarky! Bet thousands of others feel the same.

I am pulling the plug on the adverts immediately - and cancelling all bookings for this year. 

So sad!!!!

Hi Randolph

I can completely sympathise with your situation, my question is this:

If tax is payable, why does someone not put together a step by step guide as to who to pay tax to, how much to pay, when to pay and what constitues allowable expenses?

In most cases it is not that people are trying to avoid paying taxes on their rentals, it is that their is no clear information available.

Maybe someone who has already been through the 'tax merry go round' could be helpful and give their advice and instruction as to where to pay, when to pay and what allowances are available?

Also maybe someone from a region that has already experienced the new Andalusia rules, could advise on how they went about registering etc.

It would seem to me that if peope have to install air conditioning, provide fire extinguishers, first aid kits etc, surely these expenses would be allowable expenses?

Big Al

Big A

All of us who have done a little research on the internet know it is all out there, but of course one has to go and find it and not expect to be spoon fed.  Ignorance in law is no defence !

You are quite right John. 

In our defence - by paying the non-residence on the Modelo 210 which assumes you are letting out the property we thought  that was all that was necessary.  They assumed we had - and we did! 

Simple minds I know.

Daft thing is - what we pay on the 210 is greater than tax due on  our rental income. We don't let out to make a profit - just help to cover costs. We don't have a mortgage so the amounts of money involved are minimal. 

Randolf ........  by paying the non-residence on the Modelo 210 which assumes you are letting out the property

It is not non resident's tax but  'imputed tax'  which one pays on a 210.  It is not in lieu of tax on rentals income.   It is in effect that the owner is taxed on the free accommodation he has available to him. Similar to a school caretaker in UK who pays tax on a house which is part of his job. (See Wiki below).

(If you have rental income that must be declared in full in addition to the imputed tax).

I pay the same (imputed) tax on my lock up-garage located in Spain and my wife’s house in Philippines. If we had a property say in UK we would also be required to pay that tax in Spain on that property too.

https://en.wikipedia.org/wiki/Imputed_income

Imputed income is the accession to wealth that can be attributed, or imputed, to a person when they avoid paying for services by providing the services to themselves, or when the person avoids paying rent for durable goods by owning the durable goods, as in the case of imputed rent.

This message was last edited by johnzx on 12/02/2016.

We followed this advice on Spanish Tax Forms.

Until 2008, UK residents owning property in Spain faced two separate taxes: wealth tax on the value of the asset and non-residents' tax on actual or assumed rental income.  Now all non-resident property owners in Spain are laible for just non-residents' tax - whether or not the property is let out for part of the year.  If no rental income is declared an "assumed" income is used to determine the non-residents' tax laibility.  (Wealth tax has been reinstated for tax years 2011 - 2014 but is only be payable by individuals with assets of more than 700,000 euros in value in Spain.) 
 

As any tax due was minimal we went with the 'assumed rental income'. Seemed to be OK to do this. Now I see it can be interpreted in 2 ways.

Again - simple minds!

Just found this linkhttp://www.surinenglish.com/20160205/news/costasol-malaga/junta-gives-three-month-201602051213.html

Seems that you are not expected to register by May. The ruling is not expected to be with the BOJA until May - and then the clock starts ticking.

Randolph - The article says

The Junta calculates that there are about 80,000 unregistered properties in the region at present, offering 400,000 beds. The Andalusian Head of Tourism, Javier Fernández, said he was confident that the register will be “operative” by May and that all properties will be registered by the summer. Anyone who fails to comply will face fines of up to 150,000 euros.

I'm sure they will have it in place to catch people this summer