In Mallorca, many clients buy properties with a view to rent them out for weekly rentals, the famous “holiday rentals” or on a long term basis. All rental incomes must be declared to the local government and only detached villas and country homes can apply for a holiday rental licence.
Potential buyers for “buy to let” opportunities must therefore contact a spanish solicitor to obtain a rental licence before starting with marketing actions. Here at Balearic Properties and our rental departments will guide you on the process of obtaining the licence, however we also have a great selection of fincas, apartments and holiday villas already with an existing rental licence, this make things easier since the licences have been limited by the authorities.
“In the Balearics, you cannot rent out private residential apartments,” says Isabel Loeffler, head of Loeffler Legal Centre, on Mallorca. “The only kind of residential property you can rent out is a detached villa, but only if you have a licence.”
The department of tourism in Palma, the regional capital, confirms this, and adds that licences to rent detached properties are no longer being granted on Mallorca. It is a similar story in the Canary Islands, because the authorities in both are keen to promote hotels over private rentals. Confusingly, licences are still being granted in Menorca.
One exception is apartamentos turisticos – a special category of property built specifically for letting to tourists. But these carry a raft of other restrictions and potential extra costs that make them unsuitable for buyers looking primarily for a property they can use themselves.
A quick search online, however, turns up thousands of private flats and villas to rent in both regions, many of which belong to Britons who may have no idea that they are breaking the law. With so many “illegal” holiday rentals going on, the law and the reality on the ground are oceans apart, which is not unusual in Spain. Furthermore, there is a lot of confusion about how the rules are interpreted and enforced.
“The situation is a bit of a mess,” admits Kate Mentink, 63, originally from Edinburgh. She lives in Calvia, southwest Mallorca, where she is a local councillor and deputy mayor, responsible for tourism and international integration. The municipality includes property hot spots such as Puerto Andratx and Santa Ponsa. “My department’s understanding is that all short-term rentals to friends and family are fine, provided you declare your rental income and pay tax,” she continues. “But renting to strangers through a tour operator or agency, or on the internet, is not allowed without a licence.”
The rental licence is needed
The Tourism Authority of Mallorca consider that renting villas and apartments are illegal without a licence, and can incur fines of €30,000 and more for property owners.
So, where do you need a licence to offer holiday rentals? Mallorca and Minorca, for a start. Planning to buy a flat in Pollensa and rent it out for part of the year to British holidaymakers to cover the mortgage? Then think again.
New Tourism Law
The Government has introduced the “very modern” text of the new Tourism Law, which will give a “complete turnaround”of the current situation among other things, regulating the conversion of obsolete tourist establishments or hardening of sanctions by 30% for the illegal supply.
The new law will allow licences to the called “touristic” holiday homes consisting of detached or or semi-detached villas and the marketing of more than one villa per plot.
This article of the new law is still discussing in detail which is regulated independently for each administrative area of Mallorca, for example, the municipality of Pollensa has made a number of objections to the new touristic law , results will be posten on a later post in the next weeks.
For more informationa bout rental licences, tips and advice for renting a holiday home in Mallorca please ask our team at Balearic Properties.
To see a list of villas with rental licence please
click here.
