A new law was passed on 3/2/2016 to force landlords in Andalucia to register properties used for holiday letting. The fines for ignoring this law are truly draconian with a minimum of 18,000€ and maximum of 150,000€. An estimated 400,000 properties in Andalucia will be affected.
This law has been several years in coming and it has finally arrived. Other regions of Spain have either already introduced similar law or are planning to do so.
It is a sad fact of life in Spain that the administration believes that until an activity has been regulated it cannot be a legitimate and it must somehow be murky, dishonest and clandestine.
A perfect example of this regulatory obsession was the 2007 Statute of the Self Employed that for the first time in history the self employed became subject to a general set of rules and regulations. This is despite the fact that being self employed is older than money and needed no regulation – making a living from your own work has existed since barter economies.
Anyway now we have to cope with a raft of regulations for holiday rental property.
So, what has motivated the new holiday letting regulations? Without doubt, they have been regulated because they need to be regulated. Of course they do……
Here are the official excuses:
- Unregulated holiday properties represent unfair competition to the superbly regulated hotel industry.
- Proper standards must be maintained in rented property, otherwise Andalucia’s reputation as a holiday destination will be harmed.
- Holidaymakers must be protected from abusive and unscrupulous landlords.
- Landlords don’t declare the income they generate from holiday lets.
Perhaps the last of these has an element of truth, but if people break tax law they are fined an amount that is commensurate with unpaid tax.
This new law fines people 18,000€ simply for having an unregulated holiday rental property. The tax evasion excuse has plenty of tax law to deal with this problem and the tax office does not need a draconian system to control tax abuse. All they have to do is look at the adverts and contact the owners.
To fine someone even the minimum of 18,000€ for not paying income tax on a few weeks of rental income is completely disproportionate with the offence.
The fact is that to ignore these new regulations is really not a good idea and registration is easy.
Where letting agents or property managers in Spain are used they should deal with the formalities. Property owners that use online advertising need to find someone to sort out the paperwork.
We will do what is necessary for our clients and try to reduce the apparent pain to a slight irritation.