If you are considering buying a house or apartment in Mallorca, you might be thinking about recouping some of the costs through short-term holiday rentals. It’s a good idea, but it’s important to be cautious of offers claiming that buying a property in Mallorca is a profitable investment. There are many costs and taxes to consider (see below). Additionally, we witnessed in 2020 what can happen.
Nonetheless, at first glance, holiday rentals can be quite lucrative for landlords: You can command much higher prices than with long-term monthly rentals. Many years ago, unlike the hotel industry, there were hardly any regulations for holiday rentals. People who reported their rental income to the tax office were often met with skepticism, as hardly anyone noticed. Tax honesty was more the exception than the rule back then.
However, since 2012, this anarchic situation has changed significantly. In that year, the Tourism Law 8/2012 came into force, particularly Articles 50 and 51 (amended by Ley 6/2018, de 22 de junio), supplemented by Decree 20/2015 dated 17th April as the implementing regulation.
Another significant change occurred with Ley 6/2017, de 31 de julio, which fundamentally allowed the possibility of offering apartments in residential complexes for holiday rentals, under certain conditions. This is permitted if the community statutes explicitly allow it or by majority decision of the owners. Originally, this was rejected in the tourism law, in my opinion, for good reason, as the intensity and disturbance caused by holiday rentals are much higher compared to owner-occupied homes.
In total, these regulations have introduced numerous bureaucratic restrictions and conditions that significantly complicate new applications for holiday rentals nowadays, but with sufficient funds and patience, it is possible. First, you should clarify how holiday rentals are defined. It refers to the temporary use of a fully furnished apartment or house, including certain services, for a period of less than one month. For longer rental periods, the regulations for seasonal rentals or regular residential leases according to the Spanish Tenancy Act (Ley de Arrendamientos Urbanos; LAU) apply.
Before you submit applications, fill out forms, or spend a lot of money, you should check whether your apartment or house is suitable for holiday rentals:
- Is holiday rental even permissible in your location? The Tourism Law of 2012 already provided that the Balearic municipalities should independently decide whether to impose restrictions or even bans on holiday home rentals in their areas. They had until December 2018 to do so. The final zones (Plan de Intervención de Ámbitos Turísticos; PIAT) were adopted by the parliament for Mallorca on July 9th, 2020. Ibiza has not achieved this yet. Therefore, the first step is to check whether your apartment or house is in one of these permitted zones.
- Holiday rentals are only allowed for properties that have been privately used for at least five years and are not newly built specifically for holiday rentals.
- There must be no ongoing construction procedures.
- A valid habitability certificate (cédula de habitabilidad) must be provided.
- An energy certificate is required, whereby Category F must be reached for properties in residential complexes built before December 21st, 2007, and Category D for properties built thereafter. For single-family houses, a minimum of Category C is required for houses built before 2007, and Category B for those built afterwards.
- Each apartment must have its own electricity, gas, and water meters.
- It must not be a subsidized or rent-restricted property.
- The owner must take out liability insurance (Article 50.16 Ley 8/2012 and Article 107 Decreto 20/2015).
- The number of tourist guest beds (specified on the habitability certificate) must be obtained from the “Consorcio Bolsa de Alojamientos Turísticos (CBAT)”. The costs amount to €3,500 per bed for a single-family house and €875 per bed for an apartment, with a possibility of installment payments over five years.
- Regarding the duration, it is important to note that the permission for independent single-family houses is granted indefinitely, while multi-family houses or residential complexes have a duration of five years. CAUTION: There is no automatic extension.
- You can offer a maximum of three units for holiday rentals. Renting out your primary residence is also possible, but only for a maximum of 60 days per year.
If these preliminary questions are answered positively, you should consider what needs to be taken into account for ongoing operation:
- You must fulfill the police reporting obligations for all guests, i.e., regularly collect and forward the names and data of all guests.
- In addition to the rent, you must charge 21% VAT. This is determined by Article 20.1.23.e. LIVA: “…the rental of furnished apartments when the landlord commits to providing any hotel-like additional services.”
- A 24-hour telephone emergency service must be provided.
- The requirements of Article 51 of the Tourism Law must be met, such as regular cleaning of the apartment before and during the guests’ stay, provision of bedding and towels, and maintenance of all facilities.
- No catering or restaurant services may be offered.
- If you accept these conditions and restrictions, you can proceed with the specific application for a holiday rental permit. Here are the essential requirements:
- The most important document is the “Declaración Responsable de Inicio de Actividad de comercialización de estancias Turísticas en viviendas” (DRIAT). The applicant must submit this “Responsible Declaration of Commencing Touristic Rental Activity,” as well as the accompanying documents explained below.
- Foreigner Identification Number (NIE) and proof of ownership,
- Proof of bed purchase from CBAT,
- Certificate from the municipality confirming that the property is located in an area where tourist rentals are permitted,
- Proof that the property meets the minimum requirements according to Article 107 of Decree 20/2015 (see Annex 6),
- For condominiums or multi-family houses, evidence that the community has approved tourist rentals.
- Payment of fees using Form (Modelo) 046.
This must be done in connection with the application for registration in the “Registro Insular y el Registro General de Empresas, Actividades y Establecimientos Turísticos de las Illes Balears” to be submitted to the Consejería de Modelo Económico, Turismo y Trabajo.
Upon registration, a license number will be granted. This number must be included in advertisements, making it easier to verify the legality of the rental. Nowadays, this can also be checked using an app, allowing guests to easily verify whether it is a legal holiday rental.
You can save time and money by purchasing a property with an existing holiday rental license since the permit is not tied to individuals.
This is a machine translation of the German article.