Renting out second residence in Spain: an overview of all the rules

Just about all Belgian clients who buy a second home in Spain want to rent it out in the long run. Some see a holiday home in Spain as a pure investment. Others try to recover the annual cost of the second residence through rental income. However, renting out a second residence in Spain is in competition with the Spanish hotel sector. Thanks to lobbying efforts, strict rules have emerged across Spain to restrict holiday rentals. Often, these rules are forgotten. Therefore, this article gives an overview of all the obligations in the Comunidad Valenciana.

Do you have a second residence in the Andalusia region? Then check out the rental legislation for Comunidad Andalusia here.

Renting out second residence in Spain: when is it a holiday rental?

First of all, it is important to know that this article will discuss the rules of holiday rentals. Holiday rentals occur when a property is available to tourists and holidaymakers on a regular basis for a fee. A property is rented out 'on a regular basis' when one of the following applies:

• the property is managed by a management or rental company;
• the property is advertised as a holiday home, for example through a website or newspaper;
• additional services are offered, such as clean-up and cleaning.

Holiday rentals - with basically a short rental period - thus differ from residential rentals. In residential rental, the tenant will occupy the property for a longer period. The tenant therefore 'lives' or 'lives' there. In other words, there is permanence. In practice, that minimum is around two months.

Registration obligation of the holiday home

You will need to register your second stay in the Registro de Turismo of the Comunidad Valenciana. Up to four holiday homes can be registered as particular. If you rent out more than four holiday homes, you are considered a company.

Through this form you can register your property in the centres of Alicante, Castellón or Valencia.

Note: renting out without registering is under penalty of fines ranging from €1,000 to €90,000. In addition, you risk a three-year ban on renting.

Update: since 8 July 2018, you also have a ´visto bueno´ from the local municipality is required. The municipality comes to determine whether your property actually meets all local standards. In addition, the municipality may impose a maximum of tourist homes and impose additional requirements.

Read more about the registration requirement for a holiday home.

Update: Local governments can also impose additional rules. For instance, the municipality of Valencia will ban rentals through online channels in certain zones. In addition, rentals may only be made to tourists on the ground floor and first floor.

Finally, urbanisations can also be accessed through the co-ownership statutes Ban rentals to tourists.

Practical commitments

There are a number of practical obligations you need to bear in mind. For instance, you are required to include your registration number in any public communication. You are also required to keep a guest book (to be collected from the local police) of all tenants. The latter means you need to organise check-ins and check-outs.

What am I allowed to rent out?

You are obliged to rent out the entire holiday home. You cannot choose to let only some rooms. If you want to rent out only some rooms, you should register as a casa rural or hotel.

Read more about the casa rural.

Update February 2021: merely renting out a room will become a crime in the Comunidad Valenciana from March 2021.

Quality standards of a holiday home

The quality requirements depend on the classification of the holiday home. A distinction is made between three categories: superior, premier and standard. The last category contains the minimum requirements of a holiday home. If you wish to rent out a second residence in Spain, you can check whether you meet the quality standards in the table below.

Certificate of conformity is required to rent out your second residence in Spain

Before you are allowed to rent to tourists or holidaymakers, your holiday accommodation must comply with local municipal housing standards. You can demonstrate this using the conformity certificate. In Spain, this is called the "licencia de ocupación" or "cédula de habitabilidad". The certificate of conformity is issued by the municipality and is required for the connection of utilities.

In practice, this will be a common problem. Older properties usually do not have a valid conformity certificate. If you wish to buy a second residence purely to rent out, make sure there is a conformity certificate.

Houses without a conformity certificate can be regularised through a procedure at the municipality.

Read more about the attestation cédula de habitabilidad.

Home in the interior

In principle, if your second residence is located in agricultural land, you cannot rent to tourists or holidaymakers. In this case, an application procedure is needed with the municipality to change the destination. This is the declaración de Interés Comunitario.

Obligations to tenants

Unless stipulated in the rental contract, you may not charge a deposit greater than 250 euros. Also, you may not charge electricity costs, water costs, community costs, waste costs and normal repair costs to a holiday tenant. Finally, a holiday rental should be cleaned prior to the arrival of tenants.

Insurance

Taking out insurance is not compulsory if it was included in the rental contract. However, it is advisable to insure against damage to the property caused by tenants. It is also useful to take out civil liability insurance in case the tenant suffers an accident in the rental property.

EPC certificate

You must be able to produce an EPC certificate. Normally, this is attached to the notarial deed of sale.

Taxes

As the owner of a second residence in Spain, you are required to pay non-resident tax on your rental income. The rate is 19% on net rental income.

Find more information on all taxes on second residence in Spain here.

Note: Spanish tax authorities will soon have access to your rental income if you rent out via online rental platforms.

Read more about online platforms and the Spanish tax authorities here.

Finally, renting out a second residence in Spain also has an impact on your Belgian taxes. Read all about it here.

However, you can avoid the strict obligations by letting under the common regime. Find more explanation here.

Would you like more information about investing in Spain? Confianz organises free information sessions.