With few houses let in UK, many individuals come to Mallorca to buy holiday homes which they would occupy for some weeks in a year, then rent out property for the rest of the year.
Interim rental law in Mallorca
The latest developments in tourism law in Mallorca, especially in those provisions affecting holiday rentals, have generated a lot of debate on what is considered legal and illegal. This has left property owners uncertain about the profitability of renting their properties. Now, I will try to shed some light on this matter.
There is a Spanish law that governs the rental acts in the country. It is said that rental agreements should have a minimum term- ideally more than a year. Anything less than this is considered illegal.
This misguided account shows some two scenarios where people have misunderstood the issue. Let me analyse them one by one.
In respect to duration of rental, you are entitled to rent your property for any period of time you wish-even for 24 hours. However, this is done under the stated tenancy act. The heart of the matter is that the Act applies to permanent housing i.e. tenants in looking for a lease of specific duration in which they will refer the property as their home. It also controls rentals that are used for other purposes other than long habitation. Therefore, there is nothing that distinguishes these two cases since they are under the same legislation.
A rental agreement that last for one week, does not satisfy the tenant need for permanent home, but it falls under the group of other purposes other than lengthy residence. This law protects the activities of the landlord and permits you to rent your property without being categorized as a touristic rental.
After the Spain law, there arose a regional touristic-governing law. This badly drafted legislation will never affect the tenancy act in any way. What this legislation does is to prohibit touristic rentals unless a licensed is obtained. You can rent out detached houses for touristic purposes, and rent your flat as non-touristic.
Now we ask if you own semi-detached or detached house. Then the choice is yours, to rent your house as touristic rental, by simply acquiring the license; or rent your asset without acquiring the license, in which no VAT is charged. In the latter case, the rental obliged to Tenancy Act. And in both cases the property is rented for any period of time.
Do you have a flat you want to rent out? In this case you do not require any license to rent your apartment. You just rent it out for any period of time you want, but it will be subject to Tenancy Act. But how can you convince the authorities that it is non-touristic rental?
Since many tourist visits Mallorca every year, touristic inspectors might assume that your property is touristic rental. To avoid this assumption, have an agreement between you and your tenant that shows fulfilment of terms and conditions of the Tenancy Act.
Secondly, you must advertise your property properly. Advertising your property as a holiday may prompt the touristic inspector to refer your property as touristic rental. If you are found with no license, you will be heavily fined.
In conclusion, law allow you to rent your property to any person at any time as long as you abide in the law. In this you will be sure to have a peaceful season.
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