Spanish Housing Regulations Explained

Are you thinking of buying a home in Spain to rent out to tenants, in either the long term or the short term? Or perhaps you’re planning to buy a home in which you can enjoy your own annual holidays and then let out to other holiday makers when you’re not using it?

Letting out a property in Spain isn’t as simple as just finding a tenant and then letting them move in, so it makes sense to get your head around Spanish housing regulations as soon as possible. The good news is, it doesn't have to be complicated!

Here’s everything you need to know:

Buying a Holiday Home in Spain

The holiday letting industry in Spain is thriving (and one of the most active in Europe, with more than 13 million tourists visiting the country each year) which means that it should come as no surprise that many of the housing regulations in Spain relate to buying, selling, and maintaining holiday homes or rentals.

Like many Spanish laws, the laws around holiday lets are devolved to each of Spain’s autonomous 17 regions, meaning that they may vary wildly from one region to the next. Before letting out your home, or buying a home specifically to let, you should look up the rules in your area. Here is a breakdown, in brief, of the most significant rules in each region:

Andalucia – If you’re letting out a home in Andalucia then properties need a First Occupation Licence and local booking sites no longer allow unregistered properties. Stricter rules apply to owners who currently let three or more properties.
Aragon – In Aragon holiday lets can offer maximum stays of one month. What’s more, owners and agents with properties in the same building must register and face stricter rules.
Asturias – Properties in rural areas of Asturias must be available in Summer to be offered during other seasons.
Balearic Islands – All homes in tourist zones of the Balearic Islands must have licences. Rules also only allow a maximum three properties per owner, and Liability insurance is required for each let home.
Pais Vasco – Licence plaque must be visible. Short-term lets limited to 15% of homes.
Canary Islands – Guest details must be logged with police when you let a property in the Canary Islands, and single-room occupancy  is not allowed. Residential communities must give landlords the go-ahead to let proper
Cantabria – Owners need public liability insurance in Cantabria, and no single-room occupancy is allowed.
Castile-la Mancha – No single-room occupancy and no long-term rentals on holiday lets ae allowed in Castile-la Mancha. An official rental plaque must be visible on the property.
Castile & Leon – In Castile and Leon, rental properties must be fully furnished, and no single-room occupancy is allowed.
Catalonia – Owners must have a copy of guest passports and log their details with the police in Catalonia. landlords must also pay €145 to have their home quality graded.
Extremadura – A draft decree is not yet in force.
Galicia – There are two types of registration for rental properties in Galicia – one for max stays of three months and one for 30 days. Guest information must be logged in both types of let.
La Rioja – Rental property must be fully furnished in La Rioja. Homes must be rented for at least three months a year and the price offered must be all-inclusive.
Madrid – In Madrid, holiday rentals must last for at least five days: one or two night stays are not allowed. Single-room occupancy is also not permittted and properties must have free wi-fi.
Murcia – All Owners in Murica must store guest information.
Navarre – Minimum space standards apply to holiday lets in Navarre and classifications in force (luxury, first, second, third).
Valencia – In Valencia, owners must start to rent their properties within two months of registrating them as letted homes. Landlords with five or more properties must register as tourist company.

 Investing in a Buy to Let Property

If you do choose to invest in a buy to let property then it’s important to consider what you would do with the property when it was unoccupied by tenants. It is currently estimated that there are more than three million homes are sitting empty in Spain, and the government is looking at a variety of different ways to rectify this. Ultimately the government potentially plans to bring in regulations that may result in higher taxes, fines, or other financial penalties for homeowners who leave their properties empty. The thinking behind this policy is that it should free up more properties to be sold and rented.

Renting Out a Home

If you’re looking for a more regular and reliable income from your property then you might want to consider listing your home in the private renting sector rather than as a holiday let. Landlords need to adhere to certain regulations around protecting the rights of tenants, and these are considered to be the most important housing laws in the country. Some of the most significant of these for you to consider include:

-Drawing Up a Written Contract. Both landlords and tenants should always have a tenancy agreement in writing to protect them and ensure that their rights are clear. This tenancy agreement should state whether you have comitted to a short term or long term agreement. Tenants that accept short term agreements will generally have fewer rights, particularly surrounding vacating the property once their contract has ended.

-Agreeing to Set Contract Lengths. Long term contracts (those which last for at least a year) offer better protection for tenants, will continue to be renewed each year on its expiry up to a minimum three year term. The only exceptions to this are if a landlord clearly states shorter terms at the start of the contract or if the tenant chooses to break the contract. By contrast, if they are offered a short -term contract then tenants must leave as soon as the initial contract they are offered ends. 

-Deposit Protection Schemes. In much the same way as in the UK, the deposits paid by tenants must be protected by a third party scheme and returned within one month when the tenancy ends. Tenants in Spain aren’t required to pay for normal wear-and-tear that occurs during their rental period.

-Securing an Energy Performance Certificate. Every home that is either rented or sold in Spain must have an Energy Performance Certificate. This is to ensure that every home in Spain is able to run efficiently and reduce carbon dioxide emissions. EPCs in Spain cost around €300 and are rated in grades of between A and G (with A being the most efficient and G being the least efficient). When you conduct any improvements on your home you can reapply for your EPC and its grade can be reassessed.

Releasing Equity From Your Home

Finally, if you already have a property in Spain and need access to cash then you may be thinking about equity release to secure some of the value of your home either as a regular income or as a lump sum payment. Alternatively, you may be considering purchasing a home now and releasing the equity from it at a later stage to fund your retirement. Equity release schemes are popular in Spain: the two main types available are reverse mortgages (hipoteca inversa) or lifetime loan.

Reverse mortgages are typically aimed at retired homeowners over 65 and involve homeowners borrowing money against the value of their property. They mean you will ultimately own less (or none) of your home at the time of your death. As a result, you’ll need to take legal advice and ensure the company is registered with the financial regulator (Comision Nacional de Mercado de Valores) and that they’re authorised to operate in Spain before you commit to equity release. You should also take tax advice on any inheritance tax implications, and if you’re unsure check with the Spanish Tax Office (Agencia Tributaria).

 Are you thinking of buying a property in Spain? Whether you’re looking to buy a home of your own or for an investment property that you can let to tenants, we’re here to help. Our local property experts use their local knowledge to help you find the perfect property for you.

 

 



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