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Go Back   Pollensa Forum > LIVING & WORKING IN POLLENSA > Living & Working in the Pollensa Area

Living & Working in the Pollensa Area This forum is for any comments, questions and advice about living (permanently or temporarily) and working in the Pollensa area. Aimed at ex-pats, property owners etc.

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  #1  
Old 03-07-2011, 15:32
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Default Advice on renting.

I am getting concerned that renting out a villa is now against the law.
How are you able to lawfully rent your villa? is there a register you can apply to?
I noticed in the Mallorcan Bulletin that there is going to be a search of websites to identify people who break this law.
Any advice please.
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  #2  
Old 03-07-2011, 16:06
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Hi Susie

There have been several threads on this site about Licences for tourist letting.

I think the conclusion was that no "New Licences" were being issued!!

May be others may have a more up to date view?
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  #3  
Old 03-07-2011, 16:20
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Thanks Gordon.
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  #4  
Old 03-07-2011, 19:34
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The tourism ministry trawling through websites is nothing new. These announcements are made periodically, but not much happens. However, there have been cases of actions taken against property owners who hadn't registered. It is a very grey area. In theory, a stand-alone property, i.e. a villa can be registered; it is apartments that are more problematic. The best thing to do is to find a good gestor (or lawyer) locally.
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Old 03-07-2011, 21:17
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Hola Suzy

Further to my reply, The Daily Bulitin has some Letters to the Editor regarding this situation:

Letters

Quote:

Dear Sir,
One would have thought that a fresh government would have taken a new look at the very grey area of holiday property rentals on Majorca but, no, just one day after we read the encouraging news that 25% of all advertisements on the HomeAway websites offer properties in the Balearics, they announce that they are initiating a further clamp-down on those (the overwhelming majority) who are unlicensed.

Do they not realise that the only reason they are unlicensed is because the Majorcan government do not issue any licences any more (for individual properties). If only they did, in the same way as every other country in Europe does, then they would soon begin to earn millions of Euros annually from the licensing fees and the taxes that are currently not being paid (because owners do not want to pay tax on a business they are not permitted to operate). Why, oh why, are they so ignorant and falling into the lap of the hoteliers who of course cannot accept competition, as we have seen by the way they are putting so many others out of business by their crappy all-inclusive deals?

Well, I think we all know why but what a terrible job the Ministry of Tourism is doing, and what a boost it will give to other Mediterranean countries, not one of which has the same antiquated regulations. Further proof of their incompetence is in their dealings with me, who they have threatened with a hefty fine or may have already found guilty of this “crime” (I don’t know which because I live in the UK but they keep sending registered letters to a Majorcan address and I never get to see what they are writing and they don’t reply to my letters to them).

Do they really think that they have the legal right to fine overseas businesses who do business with overseas owners? Are the major rental portals such as Booking.com going to be next in line? This will go to the European court if necessary but why doesn’t the Majorcan government just get into the 21st century once and for all, start licensing properties again and be done with it.

Sincerely,

John Lance
Managing Director
Holiday Homes Int’l Ltd
London - England

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  #6  
Old 14-07-2011, 13:45
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Thought this might be of interest


Spain's tax authorities to crack down on illegally rented property
By Press Release - Perez Legal Group - Jul 14, 2011 - 1:01 PM


With the summer season in full swing, the Agencia Tributaria (Spain's tax authority) is launching a campaign to cut down on illegal rental. Archive Photo


At its worst, this involves agencies that let properties on their books without informing the owners and then pocket the income, meaning that both the rightful recipient of the rental money and the tax authority are circumvented.

However, these new measures are also aimed at bringing to book the increasing number of second homeowners who are renting their properties out and failing to declare their earnings. Newly released figures estimate that, of the 65,000 holiday homes rented every year in Málaga province, 75 per cent are not declared, meaning a total loss to the taxman of a breathtaking €104.8 million.

In order to recoup this money, the Agencia Tributaria has enlisted the help of the electricity companies; armed with proof of electricity consumption during periods when the offending apartments, townhouses and villas are allegedly empty, the tax authorities will be able to pursue the offending landlords.

Since so many of these holiday lets are owned by foreigners, it has been claimed that much of the problem can be attributed to ignorance. One of the Costa del Sol's English language newspapers, the Euro Weekly News, quotes an unnamed real estate agent: “Although there is no excuse for people not declaring holiday home income, it can be very difficult for foreigners to find out when, where and how one is supposed to go about things. There is so much red tape involved it is often hard to know where to go for proper advice.”

The good news is that it is not at all complicated to place your rental agreements on a completely legal footing:

• Firstly, for full security, your rental contract should be registered with the housing department. This means that you will have full legal protection in the event of any court case about your rental that could arise. Only registered contracts, where the landlord is completely legal in his operations and declares the rental income for tax purposes, have the full protection of the law, although in reality it is often the case that many landlords don’t do this and the rental contract is valid in Court.

• Secondly, if you hire a real estate agency or management company to handle your letting, they must add 18% of VAT to the rent, which must be paid to the tax agency. These companies will normally charge around a 15% commission for their services.

• You must declare your rental income and set aside 24% of the rent as a withholding tax payable to the Spanish government every month or if you apply, every quarter.

• You should know also that you must declare this income to the UK or German tax authorities – wherever you are resident. The double taxation agreement between the two countries means that you can claim back from Spain what you have paid in the UK, so you are not taxed twice but you must declare in both countries.

• If you are a tax resident in Spain, you should add your rental income to your other income when you make your annual Spanish income tax declaration. If you register your property as a tourist letting operation, you can put down the maintenance expenses of your property as a business expense and deduct this from your tax.

Adhere to these five, very simple rules and you can enjoy the additional income that accrues from the rental of your Spanish property, secure in the knowledge that your will not receive any unwelcome communications from the tax office!

If you would like to know anything at all about the legal aspect of owning – and renting – a home in Spain, please do not hesitate to contact the Perez Legal Group team. Our highly experienced lawyers and accountants will be able to answer all your questions and put your mind at rest

Read more: Spain's tax authorities to crack down on illegally rented property
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  #7  
Old 14-07-2011, 14:23
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The above post relates to mainland Spain. Although the tax comments probably do apply the actual regitration/licensing of rental properties is regional i.e. it is different in Mallorca & that is where the confusion is as no-one seems to know what the actual situation is.

If anyone is concerned, please contact your local solicitor i.e. one based in Mallorca - there are a couple here puertopollensa.com/property_services.html#solicitors but I assume most owners have a solicitor from when they first purchased the property.
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