If you’re planning on letting out your property in Spain, it is vital to seek professional advice from your local Spanish based lawyer with property expertise. Since regulations on renting holiday homes vary according to the region, it is also wise to check local laws with the nearest town hall.
Here at Balearic Properties we can guide you through the process of obtaining a rental license and offer expert advice. We also have a fine portfolio of fincas, villas and apartments already equipped with licenses, ready to go. Let the horror stories never apply to you!
If renting out a villa through a rental agent, make sure they are registered with the Association of Villa Agents, an independent, non-profit organisation officially licensed to trade holiday property in Mallorca.
Balearic Properties is an official partner of the Association.
Owners who rent out apartments, fincas or villas on a non-touristic basis are generally not required to apply for a special license.
Apartments may safely be rented out non-touristically. However, if you own or are planning to buy an apartment which is part of a Comunidad de Propietarios (committees of property owners who are responsible for the management of communal areas of apartment buildings and complexes), you should check whether there are any rules that prevent short term letting.
Steer well clear of advertisements which promote your property as a holiday home offering certain services similar to services a hotel would offer the tourists.
It’s also important to invoke the correct contract. As Juan Mateu, a lawyer with Pollensa and Palma based firm Ripoll&Mateu, www.ripollmateu.com, says, “The contract has to stay basically within the rental concept but not providing touristic services such, transfer to airport, cleaning services etc as these ones are used to consider the rental as touristic.”
New laws introduced in 2013 brought favourable news for Landlords. Prior to this, long term tenancies could be forcefully renewed by Tenants for a maximum period of five years.
Now, the maximum renewal period is three years, and in specific cases a Landlord can express his/her will to rescind their agreement by simply offering 60 days notice.
You may want to consider using the services of a reputable Letting Agent to assist with finding good Tenants, drawing up the appropriate rental contracts and managing the property for you.
Owners should be aware that as of 1st June 2013, following a European directive, anyone wishing to rent out their home will need to supply the Tenant with an Energy Efficiency Certificate, giving the property concerned a general energy efficiency rating.
Owners of property in Spain should be aware that whether or not they are resident in Spain, they will need to declare rental income to the Spanish tax authorities.
IRNR is the Spanish name for Income Tax for Non- Residents who rent out their property. Tax form no. 210 is submitted for monthly declarations, and 215 for quarterly deductions. A tax rate of 24% is charged on rental income. If you are resident in Spain, you will pay tax on rental income and personal income at a progressive scale from 24% to 45%.
Here at Balearic Properties Mallorca we will be happy to give you expert tips and guidance to help you maximise the earning potential of your property purchase in a safe and legal way.
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The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants.