How to Make a Lucrative and Legal Income From Your Spanish Villa

So you own a Spanish villa that spends a large part of its life sitting empty? I’m sure you don’t need us to tell you how lucrative it could be for you to rent it to holiday makers while you are not using it, or even while you wait for a suitable buyer.

We’ve seen some amazing good news stories from owners who have turned around their fortunes by embracing holiday rentals as a source of income. For example, one of our owners was on the verge of losing his townhouse to the bank, but with a clever niche-marketing strategy he now consistently gets 30+ bookings each year, bringing in an important income of £25,000 to £30,000 every season. Not only did he save his house from being repossessed, he also paid off his debts, and is now looking for another rental property to buy.

Another of our clients who owns a luxury villa in Spain was struggling to find a buyer when the market crashed, but rather than reducing the sales price and selling for less than it cost him to build the villa, he instead decided to rent it out. He managed to achieve £140,000 worth of bookings after commission in his first year which has seriously helped towards his initial building costs and tax bills. That’s not a figure to be sniffed at!

Obviously any income you make from your holiday rental is taxable, just as your earnings from employment would be. And since 2013 the 17 autonomous regions of Spain have been introducing a licence procedure for holiday rentals, which works to ensure the industry is well-run, professional, and offers quality accommodation for tourists, which can only be a good thing!

Registering your holiday rental in AndalucíaAndalucia is the latest region to approve a very simple and free registration system, so that you can get your all-important licence number, which will allow you to use all of the online marketing channels available to you.

The law was approved on 2nd February and the law will come into effect on 12th May 2016, giving owners time to register.

Registering your Spanish villa for holiday rentals is a no-brainer, especially if you advertise your villa online to attract bookings (who doesn’t?). Many owners are too busy to set up and manage their own website and marketing strategies, so just like our clients we mentioned before they work predominantly with specialist rental agencies and listing sites to bring in bookings. But increasingly, these listing sites will only be able to advertise properties that hold a licence number, as we have seen with Airbnb and HomeAway in Catalonia, who faced big fines themselves from the Spanish authorities for continuing to advertise holiday rentals that were not registered.

If you own a holiday rental in another region of Spain, we recommend you read our article, which gives a quick run through of the latest requirements for registering a holiday rental in each region, so you can be sure that you are doing things the right way.

As sure as Benjamin Franklin was about the certainty of death and taxes, we are even more certain that villas with a licence number are going to have a massively out-perform those properties that are unregistered.

Think about it, you will have a massive advantage over clandestine rentals in terms of customer confidence, quality and legality, so you can easily take a lion’s share of the market from guests who will book your place over the unregulated villa next door – he may be trying to avoid the taxman, but that’s a false economy if he doesn’t have any income anyway!

As we mentioned before, there is no need to panic at all about the new Andalusian decree, unlike some tabloid reports it’s there to protect owners and guests alike and it’s free and simple to register.

We are going to be helping a couple of our villa owners through the paperwork as soon as the register opens to see how it all works, then we will report back with as much help and advice as we can offer to smooth the process for you.

Read our complete guide to registering your holiday rental in Andalucía.

4 replies
  1. Richard Pitts
    Richard Pitts says:

    So many conflicting interpretations.
    Are you confident that only property advertised somewhere needs to be registered?Thanks

    Reply
    • Louise Brace
      Louise Brace says:

      Hi Richard

      I attended a meeting held by the Junta de Andalucía on Tuesday. There was a big debate over this point, but the decree clearly states and they confirmed that a property can only be registered as ‘Tourist Accommodation’ if it is promoted through a tourism channel i.e. booking site, travel or holiday rental agency, under any heading/category in on or offline media, which suggests content will be about tourism; any reservation or booking system that promotes holiday rentals and companies that organize travel activities and accommodation. We don’t agree with the point, but it was stated quite clearly at the meeting.

      If you don’t advertise a holiday rental as tourist accommodation, but still rent it out, they suggested it should be rented under the original LAU.

      If owners are caught advertising as tourist accommodation, they will be picked up on it.

      You can read our report from the meeting here: http://rentaltonic.com/complete-guide-registering-holiday-rentals-andalucia/

      Reply
    • Lindsay Gregory
      Lindsay Gregory says:

      It does appear that the distinction they are using to classify a ‘Tourist Accommodation’ is whether the property is being advertised online somewhere, or in print, with the intention of renting it out in exchange for payment. I can therefore imagine a few owners thinking they will just take it off any listing sites in that case! (and I can also imagine a swift amendment to this ‘loophole’ coming up) so all we can say is that the internet is a very big place and once something’s up there, its up! (the authorities have been crawling such sites for a long time to gather a database). More to the point, if a property is not advertised anywhere, then what chance does it have of generating any revenue?

      Reply

Trackbacks & Pingbacks

  1. […] New legislation can always lead to a time of uncertainty, but these changes are hopefully going to bring more professionalism in the sector in general so can only be a good thing for tourism. If you are unsure as to the best course of action to take, then do read our recent opinion blog about the new legislation. […]

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