The Government is finalizing a law decree requiring internet portals to report owners and income. These must comply with the Public Safety Act and report on who is staying at their properties.

The Internet portals should inform the Tax Agency of who owns the tourist homes that appear on their websites and what the income they receive. In the same way, the state security forces must be informed of who the people are staying in them.

These measures are intended to increase control over tourist rental, improve security and crack down on tax fraud.

The association of the tourist rental Aptur-Baleares and the electronic portal Airbnb announced yesterday that they will work together to promote Balearic Islands as a sustainable tourist destination.

It is well known that the boom of tourist rental of apartments has recently experienced an unprecedented development in the Balearic Islands. The tourist towns of the Balearic housed inside thousands of properties intended for that purpose. Palma leads the statistics in terms of number, 3,715 in total, followed by Pollença and Alcúdia.

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This data may change with what is known as zoning established by the tourism law. May not be marketed tourist stays in areas declared eligible (with administrative certificate). The zones will be determined in a motivated way by the Insular Councils, following a mandatory report from the Town Councils, except Palma City Council that will decide without need of the Insular Council of Mallorca.
While not zonifique the license application is paralyzed through DRIAT. The maximum term of 1 year is established, that is to say, until August 1, 2018 to proceed to zoning; if after this period the zoning has not been established, declarations will be requested to initiate activities regarding detached single family dwellings, single family dwellings between medians and single family dwellings.

During the past year, the holiday rental managed by the big platforms left in the Balearic Islands 900 million euros. The latter consider tourist rental on the islands not only generate benefits for traders and owners of flats and apartments but has also diversified supply generating activity in areas not noticed so far the effects of the tourism industry.

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Balearic Islands continue to experience strong economic growth in the second quarter of 2017, reaching 3.9%, and stringing eight consecutive quarters with GDP growth above 3.5%.

Balearics data exceed the state average in the second quarter, 3.1% according to the Institute of Statistics of the Balearic Islands, and are well above the 2.2% growth of the European Union in the same period. In terms of economic sectors, services continue to lead growth with 4% and accumulating 6 quarters with growth of 4% or more. Construction, on the other hand, accelerates activity to 3.7%. Visas projects have risen more than a fifth in the first half of 2017, this improvement is expected to be maintained in the immediate future.

The evolution of tourism is marked by very positive results. On the one hand, year-on-year spending increased 12.6% in July, and the number of tourists, a 5.3. In parallel, the number of passengers arriving at ports and airports of the islands increases strongly compared to last year’s figures and become overcome historical records.

The high profits of the tourism sector, have made the interest of the investors have multiplied when looking for its implantation in the island. Palma is among the five Spanish cities with greater pressure from large firms to find commercial premises. The demand for commercial premises or hotel facilities is much higher than the properties that are put up for sale or rent. The interest of companies and investors to take a hollow in the island goes beyond the premises in which to install a trade or a restaurant business and reaches full to the hotel plant.

 

Outside Palma, the most attractive areas for the investor are to be found in Port d’Andratx, Port Portals, Port de Pollença or Port d’Alcúdia, to name a few examples, due to strong foreign demand.

Palma is considered the main gateway for foreign investments in the Spanish tourism sector. From the legal point of view, the services that are most demanded are related to the mercantile, with the corporate law, the labor law, defense for procedures and assistance in investments. Customers are tourism professionals.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).

This allows us to offer detailed advice in the field of internationalisation by providing services such as:

  • International Trade Consulting, recruitment, formation of companies, subsidiaries and branches.
  • Advice on tax issues: tax incentives for the internationalisation of companies, income earned abroad, international operations, etc.
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Palma City Council has set next spring as the deadline to have the zoning provided for in the tourism law that will determine which areas of the city can be leased multifamily housing and which are not.

In this sense, the City Council already has several reports prepared to approve the moratorium on tourist establishments affecting:  Palma centre, first Eixample, Santa Catalina and Playa de Palma. Decisions must be accompanied by technical and legal reports to support them.

In addition, meetings will be held with the corresponding entities in order to know the Plan of Intervention in Tourism Areas (PIAT) that is drafted by the supramunicipal institution.
This document, among other things, sets the ceiling of places, both hotel and rental, that can be authorized in each area. In the case of Palma this plan proposes the reduction of the places. It is therefore very important to have up-to-date data on the number of single-family and multi-family dwellings since, although the former may be the subject of holiday leases, they also count in the global number of tourist places allowed.

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In another order, and regarding the current season, the Directorate General of Tourism is processing the 1,500 tourist places, corresponding to 264 homes that were engaged in commercial holiday rental. Of the total number of tourist houses, 153 had registered the declaration responsible for starting tourist activity between 2016 and 2017, but they are floors in multi-family buildings and semi-detached houses, which were not authorized to be marketed at the time of registration.

These homes were registered prior to the entry into force of the law that regulates the tourist rental and that establishes a moratorium of new authorizations of commercialization of tourist stays in houses until the island consoles and the Palma City Council establish the zoning. The Ministry of Tourism has begun the process of the definitive removal of 111 tourist houses authorized prior to 1999, in which the Inspection Service has found that there is no longer any tourist activity.

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At the beginning of the month the moratorium for the granting of new tourist rental licenses came into force after the text of the amendment to the Balearics Tourism Law was published in the BOIB, after having been approved by the full Parliament on the 18th of July.

The amendment makes special reference to two questions:

-regulation of the commercialization of tourist stays in housing.
– the establishment of a real roof of tourist places.

The Government of the Balearic Islands has sent a letter to all public administrations that have a registration to inform the public that no new declarations can be submitted responsible for starting the tourist activity (DRIAT) until the insulars “consells” and the City Council of Palma establish the areas suitable for this economic activity.

The new tourism law that has entered into force declares those responsible for infringements related to the sale of tourist stays in illegal housing to property owners as well as to potential exploiters and marketers. The law introduces a modality called “main housing rent”, when the commercialization is carried out by the same owner in its main dwelling for a maximum period of 60 days in a period of one year.

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General requirements for residential tourism marketing

  1. Can be marketed short-term tourist stays in residential homes always carry out this marketing proprietary or made by operators or any of tourism marketing channels, on the terms set down by law.
  2. You can only carry out the activity of commercialization of tourist stays in dwellings if it is done in residential dwellings that have the habitability certificate in force or the corresponding title.
  3. Only new tourist commercialization of residential housing can be carried out that are located in areas declared expressly suitable.
  4. It’s not possible to commercialize tourist stays in any house with respect to which a firm sanction is imposed for serious or very serious infraction of the urban legality, as long as this legality is not restored.
  5. The residential houses that are the object of tourist commercialization have to prove the sustainability by obtaining the energy certificate that is determined by regulation.
  6. The houses that are subject to tourist commercialization that present a responsible declaration must have the systems of control of the consumption of water that are determined by regulation. In addition, they must be provided with individual meters with respect to other energy supplies linked to the dwelling, such as electricity or gas.
  7. You can’t touristically subject to market any residential dwelling or has been subjected to official protection regime or appraised price.
  8. The marketing person must meet all regulatory requirements requiring activity include: requirements that may be demanded for exercising business activity;the labor law, if you have hired staff;and tax-related requirements contained in the specific regulations.
  9. The marketing of tourist stays person must submit to the Directorate General of Police information concerning the stay of the people staying in them, in accordance with the rules of public safety.
  10. Users hosted people have to meet the applications of coexistence and public order and in cases of horizontal property, the internal rules of the homeowners where the property is located.
  11. The stays that are commercialized tourist must consist in the temporary assignment of the right of enjoyment of the totality of the house by short periods, understood like stays by days or weeks, without a stay can be more than one month.
  12. The tourist stays regulated in this chapter are incompatible with the formalization of contracts by rooms or with the coincidence in the same house of users who have entered into contracts.
  13. The companies that sell tourist accommodation in residential dwellings must sign an insurance policy that covers civil liability and, in the case of houses subject to the horizontal property regime, to cover any damages that may be caused by users to the owners community.
  14. The residential dwellings in respect of which the responsible declaration is presented in order to start the activity of commercialization of tourist stays must have proven the minimum seniority that is determined by regulation.

Do not hesitate to contact us to have more information related to the tourist rental in Mallorca.

 

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Last week came into force the new Law of Tourism of the Balearic Islands that begins including a moratorium of one year in which will not be granted new licenses of tourist rental.

Aspects to consider:

  • The institutions with urban planning have a period of one year to establish and approve the zoning. Until this is not carried out, no further statements may be submitted starting responsible for tourism and new licenses will be given.
  • The different marketing channels are obliged to publish the license number of the dwelling corresponding to the final license granted by the administration that has the tourism management competences.
  • The new Tourism Law introduces a modality called “main housing rent”. This will be given when the commercialization is carried out by the same owner in its main dwelling for a maximum term of 60 days in a period of one year.
  • In the modality of houses subject to the horizontal property regime, it’s necessary an agreement of the junta of owners by majority of the proprietors, who at the same time constitute the majority of quotas of property, to carry out the tourist commercialization.
  • Touristically market is prohibited any type of residential housing subject or has been subject to official protection regime.
  • The person marketer of tourist stays has to send to the Police DG the information regarding the stay of the people who are staying, in accordance with the rules of public safety.
  • Inland tourism accommodation must have a minimum of five accommodation units.
  • The law maintains the repeal of section 5 of article 88 of Law 8/2012, which allowed an exchange of two stays for one.

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As far as sanctions are concerned:

  • The new law declares those responsible for infringements related to the commercialization of tourist stays in illegal housing, both the owners of the properties and the potential exploiters and marketers.
  • Marketing a home without submitting responsible statement implies a serious offense with fines between 20,001 and 40,000 euros for both the owner and the operator or marketer, and each house is offered.
  • In the case of platforms or other owners and operators of the tourist marketing channels, advertising or promotion of illegal offers implies penalties of up to 400,000 €.
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The number of foreign tourists that visited the Balearic Islands in the first six months of the year exceeded 5.4 million, 8.5% more than in the same period of 2016, these are the latest data released by the National Institute of Statistics (INE). These data lead us to consider the current situation of the much-discussed Balearic Tourism Law.

The largest number of foreign tourists who traveled to the Balearics in the first six months of the year came from Germany, 36%, and the UK, 29.5%. The main emitting countries were the United Kingdom, with almost 8.6 million tourists and an increase of 9.1% compared to the first six months of 2016; Germany, with about 5.5 million, 9.6% more, and France, with more than 4.7 million, an increase of 4.9%. In addition to all this, it’s well known that relations between Spain and Russia enjoy very good health which means an increase of Russian tourists to our country. Every year over 1.5 million Russians come to spend holidays in Spain and most of them choose Mallorca.

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On July 18, the new Tourism Law was debated and voted on in the Balearic Parliament, which will take effect next week. In the same way, a decree law will be approved that will correct it to allow apartments leased to tourists, but this option will remain prohibited until the insular councils and Palma City Council determine in which areas and under what conditions it is authorized.

The Ministry of Tourism emphasizes the need to enforce the law, especially the large marketers, internet platforms and real estate, in clear reference to the legal uncertainty that until now allowed vacation rental housing in multi-family buildings sheltering in the state leasing regulations despite being prohibited by the Regional Tourism Law. Rental platforms that advertise homes for short leases without the mandatory authorization number and market unregistered flats or houses may be fined up to 400,000 euros.

As soon as the new law comes into force, a moratorium on new places will also be implemented until island councils and the Palma City Council decide which rental modalities are accepted in each zone.

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Balearic Islands are one of the great economic engines of Spain thanks to the good behavior of the tourism sector. So much so they lead in 2017 and will lead in 2018 the growth of the Gross Domestic Product.

Never before, the Balearics had grown as much as now. According to recent banking data, the economy of the islands is advancing at a year-on-year rate of 4.4%, a growth so strong that there is no precedent in this century.

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