Andalusia property owners must register under new rules

Rental properties in southern Spanish region will have to be registered from May

Owners of rental properties in southern Spain face new regulations obliging them to register their properties as tourist rentals.

The Registry of Tourism of Andalusia (RTA), which includes the Costa del Sol where many Irish people bought property during the last economic boom, has moved to establish a register of tourist lettings. Owners will have three months, from May 2016, to register these properties on the RTA website.

The move follows the decision in 2013 by the Spanish government to relieve the Ley Arrendamientos Urbano (LAU) of responsibility for holiday rental properties. It passed the task of regulating these properties instead to the country’s 17 regional governments or Juntas.

Many Irish owners of properties in Spain let them out when not using them. When Spanish sales in Ireland peaked in 2006-07, many were made with borrowings, raised either in Ireland or Spain.

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Reliant on rental

Following the property collapse, in many cases the borrowers have been heavily reliant on rental income to pay down loans. The prospect of regulation and the hidden and stated costs involved in meeting regulatory requirements is likely to prove unpopular.

Owners who let out more than three properties within a 1km radius will have to register as “Apartamento Turistico”, a category to which more stringent regulations, and presumably more expense, will apply.

The mood among owners is not helped by the hard line taken by the Junta de Andalusia on compliance. It has been reported that it may issue fines of up to €150,000 to those found to be flouting registration.

The RTA will outline minimum accommodation requirements for tourist accommodation providers.

The official line on the need for regulation is to improve accommodation quality, reduce tax fraud and prevent unfair competition. This final point is controversial, as a powerful hotel and tourism lobby is seen as the driving force behind the push to regulate. A deep recession and websites such as AirBnB have been eroding profitability in the industry.

Smaller operators

The worry is that the move will involve costs for smaller operators that are proportionally much more onerous than those borne by larger tourism operators.

The Junta estimates there are 80,000 private properties offering up to 400,000 beds as tourist accommodation, either on a part-time or full-time basis.

The intention is to have tourist rental activity fully regulated by the end of summer of 2016.

So far 11 of the 17 Juntas have published intentions to regulate holiday rentals. For those with property in Spain and unaware of the regulations pertaining to their area, there is a useful guide at spanishpropertyinsight.com.