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Rumours regarding new laws on property rentals in Spain

new property lawsThere are at present many rumours, inaccuracies, and general gossip regarding a supposed new Law in Spain that will restrict owners from renting their property in an effort for the Spanish government to help support the Hotel industry.

We at HomeCareontheWeb have been renting properties on behalf of our owners for many years and during this time there have been many similar rumours circulating. Some areas of Spain, like Catalonia and Majorca, have already taken measures controlling the rental of properties, and owners have had to apply for licenses, so as to ensure properties are fit for their purpose and also to ensure owners pay their taxes.

It is true that a certain amount of “upset” exists within the tourist industry sector due to the current trend for holidaymakers to choose self-catering over hotel accommodation. This controversy has raged for years and is no doubt debated regularly with different suggestions made as to how the hotel industry can cope. However it is highly doubtful if the government would seek to actually BAN the letting of private houses, as this would be contrary to the Constitution and even the most narrow-minded defender of the hoteliers’ interests could not dream of this being possible.

It’s always prudent to put these rumours into perspective. Spain is going through changing times like the rest of the world, however the majority of its gross domestic income comes from tourism and the free market economy dictates that all players within the industry should work in competition to each other. It’s therefore unlikely that a restrictive practice such as a ban on rentals would be contemplated, let alone become law.

Not only does the government rely on income from its tourism, it also relies on the taxes paid by the hundreds of thousands of property owners, both Spanish and foreign, currently obtaining legitimate income from the rental of their property, and it is unlikely to limit these valuable earnings.

However, tighter controls for renting properties may well be “on the cards”, so that such properties can meet basic health and safety standards as well as ensuring owners are paying their taxes.

Currently HomeCareontheWeb recommend that owners renting out their property install fire safety equipment and generally ensure their property is safe so that insurance companies have no reason not to compensate in the case of accidents. We also stipulate that owners must declare their rentals for tax purposes in order to meet their current obligations to the Spanish government.  In so doing our owners are deemed to be a responsible property owner and follow all the current rules.

In the event that any legislation is passed in the future relating to additional health and safety standards, or any requirement for properties to be licensed for rentals, please be assured that we will be abreast of such developments and will already have in place the help and assistance our owners will need in order to comply.

In the meantime, there is no need to worry. These are, after all, just rumours and speculation. And if anything happens that needs your attention, we will let you know.

 

Renting your property – The costs

Earn moreMany people are choosing to rent property in Spain these days, and it can be a great source of income for the owner. However, where there is income, there will be tax. It’s important not to solely rely on the income from letting your property to pay the mortgage and maintenance costs, as you may find it hard to get it covered all year round. Here is some brief information on what costs and taxes you may be subject to if you decide to let your property.

Income tax, how much to pay and when (Non-residents)

When your property is being rented out, the amount of income tax payable is usually a flat rate of around 25% of the gross income earnt from letting the property. This would be paid quarterly for the previous 3 months. When filling out your tax return, don’t forget to offset any expenses you pay on behalf of your tenant such as the water or electricity. Be aware though, the tax authorities work closely with the electric and water companies, and will know if the bills are being taken from your bank account or your tenants so you must only offset the expenses paid for by you. Continue reading “Renting your property – The costs”

Why do you need a management company if you have a long-term tenant in your Costa del Sol property?

You desperately need help covering the running costs of your vacant property on the Costa del Sol.
The rental agent you contacted last month called a few days ago to say they’ve found you a long-term tenant. You and your new tenant have signed the rental contract the agency organised, you’ve paid the one-off fee upfront fee the agent asked for. The tenant has paid a deposit and they seem nice and trustworthy. What could possibly go wrong now…?

KeysOkay, just imagine this…

  • You desperately need help covering the running costs of your vacant property on the Costa del Sol
  • The  rental agent you contacted last month called a few days ago to say they’ve found you a long-term tenant (Yesss!!!)
  • You and your new tenant have signed the rental contract the agency organised, you’ve paid the one-off fee upfront fee the agent asked for
  • The tenant has paid a deposit and they seem nice and trustworthy

You can’t believe your luck. Everything is sorted. From now on, there’ll be no more overheads to worry about. All the money your tenant pays you in rent each month is yours to help pay for the property you thought you could no longer afford.

Yeah, you can finally relax…what could possibly go wrong?

Now it’s time to wake up and smell the coffee!

The above might seem like a dream scenario on the surface, but there are a number of issues you might not have considered which could and probably will come back to haunt you, especially if you’re renting your Costa property out  while actually living in another country.

For instance, who’s going to provide a spare set of keys at 3am if your tenant phones to say they’ve lost their set?

Who’s going to find a plumber if there’s a water leak in your apartment on a Sunday?

Who’ll inspect your property on a regular basis to make sure your tenants are treating it properly?

Who’s collecting the rent?

Who’s going to have to deal with everything if the tenant (God forbid!) just stops paying the rent?

And who’s going to get sued if there are any serious personal injuries or death caused by faulty fixtures or fittings in your property?

The answer, if you don’t have a property management company in place, is you.

A professional management company might cost you money you’d rather not spend, but in return they’ll relieve you of all these worries and more, which in turn will save you both time and money in the long-term, and help you and your tenant to enjoy a mutually rewarding tenancy with fewer risks.

It’s not only worth thinking about, it’s a ‘no-brainer’.

So if you’d like more free advice about how our property management services can help you rent out your Costa del Sol property long term with fewer risks, please just pick up the phone and call us on 0034 952 83 95 95 or email us at info@HomeCareontheWeb.com and we’ll be glad to help you out.

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