In recent years, villas and townhouses have had it easy to obtain renting licenses whereas apartments, on the other hand, have not been allowed to apply for a renting license for the last two decades.
A way round this used to be the “Ley de Arrendamientos Urbanos”, sometimes referred to the tenancy act in English as this law does not set a minimum length of a let. Many owners and agencies were legitimately using this law for apartment rentals. As long as those properties were not advertised as being “holiday apartments” and no additional services were being provided i.e. cleaning, assistance phone, etc., and a lease contract was signed, they were within the law.
Recently, the Balearic Parliament has approved a new holiday rentals’ legislation. In addition to regulating the commercialisation of tourist accommodation, a real ceiling has been placed on the number of beds available in the islands. A balanced solution has been sought between the coexistence of residents and tourists and addressing housing needs.
According to the Government, this new ceiling of beds is meant to tackle the unlimited growth of tourist accommodation capacity of the Balearics. Whereas owners of holiday rentals such as villas or townhouses which are already licensed will be unaffected by the new bill, there is now a one-year moratorium on new permits for new holiday rental properties. The local councils and the town hall in Palma will use this period to determine which zones will be allowed to register new holiday rentals’ beds.
A new aspect of these new licenses is that you will need to buy places of occupancy from a limited stock.
There will also be a new restriction to limit the number of properties that one owner can market: no more than three. Additionally, any property that applies for a new license will have to be at least five years old.
The legislation creates new ways for prosecuting illegal supply by establishing a clear definition of the channels through which holiday accommodation is offered, and requires that a tourism license number is displayed on any advertisements. There’s even an email address so you can denounce your neighbours.
Furthermore, any property to be let for under thirty days will be deemed to be a holiday rental and therefore subject to all the relevant provisions in the legislation. This is the Government’s way of closing the tenancy act loophole on short-term rentals that are in fact for holiday purposes.
Any listing without license number will be deemed to be illegal, leaving websites and landlords liable to hefty fines – ranging from 20,000 to 40,000 euros for owners and up to 400,000 euros for agencies and portals. The Ministry of Tourism has set up an email for residents to denounce other owners who rent their apartments.
The legislation makes provision for the holiday rental of a “habitual dwelling” for a maximum of sixty days a year. This applies to both apartments and houses. These dwellings would still be subject to the zoning.
Our team at Prestige Villas will keep a close eye on upcoming news regarding the holiday rental legislation. Keep up to date by subscribing to our newsletter: click here. If you have any questions about the new law, feel free to contact us, we are here to help.