New Rental Rules
Palma’s mayor, Antoni Noguera, was reported to be seeking a ban on holiday rentals in the city, extending as far as Playa de Palma which is a popular resort for holidaymakers wishing to be near the beach and the attractions of Mallorca’s capital city. Under proposed plans that go above and beyond new legislation introduced by the ministry of tourism Noguera, who succeeded José Hila as mayor in June, would introduce a blanket ban on apartments which could be legally registered for holiday rental, to be extended to subsequent seasons.
Homeowners, renting out private apartments would be liable to fines of up to 40,000 euros and a more vigorous programme of inspection by the tourism ministry has already been discussed. Recent research by the Ayuntamiento found there are 3,200 tourist rentals apartments being marketed online in the city, with 21,216 beds, the equivalent of 70% of the city’s tourist accommodation capacity. “Ninety per cent of it is unregulated,” Noguera told the Spanish press. “Not a single apartment in Palma has a licence.” There have been accusations by Aptur, the holiday rentals association that the mayor is “invading the responsibilities” of the tourism ministry, and criticism of a seemingly unsympathetic attitude toward the lucrative tourism sector.
Noguera denies this and claims to be acting in the best interests of citizens of Palma and its outlying regions, who are finding rental properties virtually impossible to find and, where available, prohibitive in price. Aptur pointed out, however that apartments can be legally rented out under the tenancy act provided they are not advertised as being for holiday/tourist purposes and do not offer services. Whilst it remains to be seen whether this move will prove beneficial to ordinary citizens and residents of the city, it will definitely not see the end of private holiday rental on the island, which is positively thriving beyond the constraints of the capital.
Proper registration of a potential holiday accommodation is, of course, mandatory as is the declaration of income generated on tax returns, although, homeowners are eligible to deduct some expenses where applicable.
In the Balearic Islands there is also the matter of collecting tourist tax, which increases the importance of attaining sound financial advice on the category of accommodation and methods of collection and payment to the authorities. Property in the Balearics is in great demand and can prove highly lucrative, but for non-residents it is important to seek out a reputable agent and property management company with knowledge of current law. If it seems that the Government is striving to throw difficulties in the face of homeowners wishing to offer holiday rental, it is essential to remember that an unregulated system favours no one, and whilst the authorities are, undoubtedly, tapping into a long-neglected source of tax revenue, the new laws will provide long needed protection for holidaymakers and homeowners alike.