Resicom – Holiday Investment – 04-21 – LB

Unregistered Spanish Property Could ‘Costa Lot’

All owners of overseas investment property situated on the Spanish Costas or any other part of Andalucia that they are planning to let out must now register with the Andalucian Tourism Registry (RTA) or risk being fined.

The rule changes introduced a few months ago got going on May 11th when registration opened, yet only 3,000 of the estimated 80,000 properties regularly rented out have actually so far been registered as required.

Property owners that let their property have only until July 11th to register, after which if they let property without a valid registration number issued by the RTA they could face fines from €2,000 to €18,000 for breaking the new law. These fines are likely to only go up as time goes on.

Ibiza introduced a similar rule in 2012 and are now beginning to clamp down on property owners not registered using IT applications to trawl property rental websites and identify rental properties not declared.

So far only around 1,500 properties in Ibiza have been registered with 5,000 more pending approval. However the internet search has uncovered another 4,500 properties on just one website alone. Fines in Ibiza are currently higher than Andalucia from €4,000 to €40,000.

Barcelona ‘declared war’ on illegal rental properties in 2014 and introduced measures last year. Although 9,600 properties have been registered, a further 6,000 that have not complied are now being chased by the Barcelona council with huge possible fines that could even reach €600,000.

It seems likely that Andalucia will follow in the footsteps of Ibiza and Catalonia by following a brief armistice with a tough clampdown on all properties not registered.

UK investors are responsible for nearly a quarter of all property sales to non-Spanish nationals, so it is imperative that UK owners of all Spanish property ensure that they follow the new rules if they have any intention of letting out their holiday homes or investment properties.

The Spanish property market might well be recovering with property sales volume increasing by nearly 6 per cent year on year, but fines imposed as a result of not registering rental properties could make a huge dent in any investment returns.

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