A proposal from the Spanish government to licence renting out holiday homes is upsetting cash-strapped expats
The move could net millions of euros for the beleaguered Spanish economy but many holiday homeowners are concerned they may need a licence but don’t currently possess a permit.
Some regions, such as the Canary Islands and Catalonia, already have strict rules about rented properties for holidaymakers and the fines for letting a property without permission can be stiff.
There are reports that some landlords who didn’t have the correct licence for their holiday property have been hit with £25,700 in fines.
Confusion reigns in Spain since there are strong rumours that government agencies are already scanning adverts for holiday lets in a bid to launch a clampdown.
Tax on foreigners
The situation has led to many holiday homeowners worrying about whether they need to comply with the proposed rules now.
However, Spanish property experts say there is no need to fear the move just yet and the proposal would lead to the creation of a nationwide register of holiday rentals.
This would mean that anyone wanting to rent a property to tourists would need to be registered and should apply for the necessary permit from their council.
Their holiday rental income would also be taxed.
Some holiday homeowners believe that the register and costs of compliance would deter people from renting out their property, especially those who only did so at peak times.
One expert says British expats shouldn’t view the move as a ‘foreigner tax’ and he says authorities aren’t trying to prevent people from renting out property but trying to get an idea of the numbers who do so.
Hard to police
Chris Mercer, a director of property firm Mercers, says: “Without some form of property registration the authorities cannot regulate lettings, but I think Spain will find this new legislation difficult to police.”
He added that the tax would be applied to all property owners, including Spaniards, and that if the income was to be taxed then any reasonable cost associated with the property could be claimed against it.
Another issue being flagged up by Richard Way, who runs a firm producing overseas guides, is that of health and safety criteria which may be out of reach for property owners.
He added : “One of the main reasons that British and foreign buyers in Spain look to rent out their properties is to help pay for the upkeep of their home and without that benefit they could easily look elsewhere for a second home which would make the new legislation counter-productive.”