marbella-solThis article was written by Raymundo Larraín Nesbitt a property-specialist lawyer based in the UK and qualified to practice in Spain. He explains the new regulations governing holiday rentals just introduced in Andalusia and provides an overview of the Decree in force, the requirements landlords must meet, and explains the steep sanctions for non-compliance.

By Raymundo Larraín Nesbitt, Lawyer – Abogado

Introduction

Since 2013 I have highlighted the ongoing trend in all regions of Spain to pass legislation on private holiday rentals:

Anyone who has read my articles here will know I am not in favour of these tourist rental laws because they have not been drafted with consumer’s best interests in mind, but rather with those of the hotel industry that fought tooth and nail to regulate this sector, and thwart what they call “unfair competition”.

Spanish politicians, and particularly those in Andalusia, have taken a string of controversial decisions in the last few years in the face of an anemic post-crisis recovery (i.e. the infamous worldwide asset declaration requirement (Model 720), stringent regional Holiday Rental Laws in various Spanish regions, the empty home expropriation decree for ‘social reasons’, a disappointing ‘Golden Visa’ residency investor scheme, draconian anti-money laundering laws etc.). These laws are proving to be highly unpopular with expatriates to the point of driving many away. Unsurprisingly many town halls are reporting of late that foreign population has taken a sharp dip in their census over the last few years (for example, the Marina Alta region of Valencia has lost a third of its foreign population). Maybe some expats have chosen to live under the radar to avoid complying with Tax Model 720 worldwide asset declaration, others have simply had enough and packed their things and gone back to their home country.

If Spain had truly a modern diversified economy these unpopular laws wouldn’t be such a big deal after all, and we could shrug it off. But the sad fact is that Spain’s GDP is unhealthily over-reliant on the Tourism and Construction sectors (over 20%), and this fact, coupled with huge unemployment levels that reach alarming all-time highs in Andalusia, make for a bleak picture. Perhaps regional politicians would do well to ponder carefully on the far-reaching consequences of decisions taken on the hoof. In my humble opinion there are many countries out there that are doing a sterling job at attracting foreign investments by adopting superb fiscal measures (chiefly Portugal). Spain should take a good hard look at itself and abandon its self-complacent attitude and start embracing competitive measures that would renew the market’s interest (especially amongst British, traditionally our largest market by far). Spain has all the makings to become the hotspot; all it requires is competent down-to-earth politicians passing tax-friendly laws that attract foreign investments. Is this too much to hope for? Continue reading