Holiday rentals in Spain: what expats should know

In the wake of recent inaccurate reports in the UK press about the banning of holiday rentals in Spain, The Local talks to property expert and blogger Louise Brace to set the record straight on what expat homeowners really need to focus on.

Holiday rentals in Spain: what expats should know
Spain's new holiday rentals law: It's about a licence fee, holiday home insurance, safety/standards regulations and declarations of earnings. Photo: TMgrup/Flickr

In June 2013, Spain overhauled the rules for its booming private holiday rentals market, handing over control of the sector to each of Spain's 17 regions. 

The government said the move was about improving the quality of Spanish tourism while many saw it as a way for them to harvest more tax.

Whatever the reasons, the changes sparked plenty of confusion among Spain's expat homeowners.

In December, several UK newspapers inaccurately reported on a "ban" on home rental in Spain. Here The Local speaks to Malaga-based property expert Louise Brace about the current state of play. 

What impact did the modified holiday rentals law initially have on your holiday rentals company Spain-Holiday?

Since the law was passed, we have received hundreds of calls from clients who didn't know how the changes to LAU (Ley de Arrendamiento Urbanístico) would affect renting legislation in their region.

We took it upon ourselves to reassure them by going out to all 17 regions within Spain and finding out what changes had been or would be carried out in the coming months.

There was a great deal of confusion and panic surrounding the new requirements among our expat homeowners.

Why was there a sort of ‘mass hysteria’ among British homeowners in Spain last month?

Well, although the amended law was passed in June 2013, an article published in one of the UK’s main newspapers last December put doubts in many homeowners’ minds.

The article was by no means factual enough, nor did it take into consideration the differences between all 17 Spanish regions.

But the misinformation spread like wildfire among a number of other British papers, who ran the ‘story’ with dramatic headlines like 'Brits banned from renting their homes in Spain'.

We felt it was our duty to set the record straight and make the distinction between fact and fiction in a detailed piece on our home rental blog RentalBuzz.

So could you tell us in a nutshell what the new home rental law actually involves?

There are four main points: a licence fee, holiday home insurance, safety/standards regulations and declarations of earnings.

Every region in Spain has different requirements at present and not all regions have introduced changes as yet.

We offer a more detailed breakdown on our site with information about Asturias, Balearic Islands, Valencia, Canary Islands and Catalonia.

We're keeping close contact with all the regional governments so as soon as we have concrete information on their rental laws, we publish it online.

There's also making sure you check at your local town hall (ayuntamiento) to find out the latest where you live.

What is the general opinion of this new law? Is it seen as too restrictive or is it justifiable?

It’s too early to determine what everybody thinks of it, as in some regions it hasn't even gone into force.

Our view at Spain-Holiday is that it will be good for homeowners in the long run. The Spanish government is essentially looking to make the sector more professional and similar legislation is already in place in countries like the UK.

Property owners have to get used to it, but I think that within a couple of years, once the dust has settled, it will become a run-of-the mill procedure.

Keeping in mind all the legal muddles and delays between the different Spanish regions, what could Spain’s government have done better?

They could have provided each autonomous region with a clear set of guidelines before handing over responsibility for the new law’s implementation.

Some local governments may be short-staffed, have few financial means or simply no experience with this kind of bureaucratic process.

How has Spain-Holiday adapted its website to cater to these legal changes?

Aside from an in-depth analysis of every aspect of the new legal requirements being covered in our RentalBuzz blog, we've also introduced a small module that ensures homeowners introduce their license number if their property is in a region where the law is already in place.

Expats in Spain have been told to take care to avoid dodgy operators when obtaining new home energy efficiency certificates for their properties. Have you received any complaints about this?

Not as yet. In fact, it’s important that homeowners find out beforehand if their regional governments even require an Energy Performance Certificate.

Also, if your home was built post-2007 or you rent out your property for less than four months per year, you won't necessarily need one.

It's worth reading an in-depth article on energy certificates we have on our site just to find out whether you require one or not.

So six months on from Spain’s controversial new home rentals law being passed, how is business for Spain-Holiday?

To be honest, we are busier than ever at the moment, much more so than last year.

Why do you think that is?

I think many of those who are homeowners in Spain see holiday rental as a legitimate and successful way of cashing in during these difficult financial times — even more so now that the sector has become more regularized. 

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REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you're considering making the move and buying property in Spain, but don't fancy purchasing in a rural village in the middle of nowhere, you should know where the cheapest, most in-demand parts of the country are.

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you’re thinking about relocating, Spain is a fantastic place to do it. Foreigners have been moving to Spain for decades, not only for its fantastic food and weather, along with a laid-back lifestyle, but housing is generally affordable – if you know where to look.

Though the rise in the Euribor has sent interest rates spiking, house prices in Spain are expected to flatten somewhat in 2023 and it could be a good year to find a bargain, depending on your financial situation.

Knowing what type of house you want and where in Spain you want to live is one thing, but knowing the cheapest, yet most in-demand parts of the country could really help you narrow down your search.

Fortunately, Spain’s leading property website Idealista has put together a list of the most ‘in demand’ municipalities of Spain and where you can find the most expensive and, more importantly for the house hunters among us, the cheapest municipalities of Spain to buy property.

It’s based on data from the last quarter of 2022 and is the average price of housing in towns with more than 1,300 sale announcements and costs valued at more than €1,100 per square metre. 

You can find the ten cheapest areas of Spain to buy property by average price below, but it’s worth noting that Idealista did these rankings by average price across the entire municipality, so there are likely individual towns and villages dotted around Spain where prices are significantly lower.

That said, this list gives you a good idea of the areas to look out for.

READ ALSO:  What will happen with property prices in Spain in 2023?

The 10 cheapest municipalities in Spain to buy property 

Santa Pola (Alicante) – Santa Pola, in the Alicante province, is the cheapest most in-demand municipality to buy a house, according to Idealista’s rankings. The average price for a house in Santa Pola costs just €151,796, though this may come as a surprise given its prime location in a foreign hotspot on the sought-after Costa Blanca. The main town of Santa Pola itself is a small beachfront community with a population of around 35,000. It also has a large foreign population and is a short drive or bus away from both Alicante and Elche.

Ourense (Galicia) – Next on the list is Ourense in Galicia where the average price is €154,941. The municipality is home to several towns and villages, surrounding the main medium-sized town of Ourense itself in southern Galicia. The town has a population of around 105,000 and is a little over an hour’s drive from both Santiago de Compostela and the coastal city of Pontevedra.

Oviedo (Asturias) – Third on the list is the municipality of Oviedo where you’ll pay an average of €154,968 for a property. Another area in northern Spain, the main city Oviedo itself, which is the capital of Asturias and has a population of 220,000. It sits between Cantabrian mountains and the Bay of Biscay. It’s known for its picturesque medieval old town and impressive architecture. 

Jerez de la Frontera (Cádiz) – Properties cost an average of €155,563 in the municipality of Jerez de la Frontera, or Jerez as it’s commonly referred to. It’s located in the Cádiz province of Andalusia and is a real piece of ‘traditional’ Spain. Jerez city is a decent-sized place with a little over 200,000 people and is known for horses, flamenco dancing and sherry, as well as the Alcázar de Jerez, an 11th-century fortress that harks back to Andalusia’s Moorish past.

READ ALSO: Is it better to buy or rent in Spain right now?

Torrevieja (Alicante) – Another municipality in Alicante and another incredibly popular with foreign homeowners. Properties here go for an average of €155,787. Torrevieja itself has a population of 82,000 and is another coastal town, but also has nature trails and salt plains nearby.

Murcia (Murcia) – Murcia is often overlooked, wedged between Alicante and Andalusia, but you could grab a bargain here with average prices of €157,119. Murcia capital is a bustling city of almost 450,000 people, and is strategically placed for trips to the Costa Blanca, Costa Calida, Costa del Sol, and Costa de Almeria.

Parla (Madrid) – The municipality of Parla lies just 20km south of Madrid and the town of the same name is home to 130,000 residents. It’s a great commuter area for those who work in Getafe or the capital. A house here costs an average of €160,652. 

Salamanca (Castilla y León) – The municipality of Salamanca surrounds the capital of Salamanca in Castilla y León in northwestern Spain. Buying a property in this area costs an average of €162,909. The main city of Salamanca is known for its university, which is the oldest in Spain and dates back to 1218. Understandably, much of Salamanca’s roughly 150,000 residents are students, which gives the town a lively atmosphere.

Burgos (Castilla y León) – Another northwestern Castilla y León municipality, is Burgos has around, where you can buy a house for just €163,164. The city of Burgos has around 180,000 inhabitants and is known for its medieval architecture and grand cathedral. 

Dos Hermanas (Sevilla) – The second most populous municipality in the province of Seville, properties cost an average of €163.274 here. The Andalusian town is just 15km south of Seville, making it great for commuters or those who want plenty of culture nearby.