Get your head around the housing regulations in Spain, from licensing of holiday homes to energy performance certificates.
Holiday homes in Spain
You might not be surprised to learn that many of the housing laws in Spain relate to its busy holiday letting industry, which sees more than 13 million visitors flock to the country each year.
Laws around holiday lets are devolved to each of Spain’s autonomous 17 regions. Before letting a holiday home you should look up the rules in your area, but here are the key points for each region.
- Andalucia – Properties need a First Occupation Licence and booking sites no longer allow unregistered properties. Stricter rules apply for owners with three or more properties.
- Aragon – Maximum stays of one month. Owners and agents with properties in the same building must register and face stricter rules.
- Asturias – Properties in rural areas must be available in Summer to be offered during other seasons.
- Balearic Islands – Homes in tourist zones must have licences. Maximum three properties per owner. Liability insurance required.
- Pais Vasco – Licence plaque must be visible. Short-term lets limited to 15% of homes.
- Canary Islands – Guest details must be logged with police, single-room occupancy not allowed. Residential communities must give landlords go-ahead to let properties.
- Cantabria – Owners need public liability insurance, no single-room occupancy.
- Castile-la Mancha – No single-room occupancy, no long-term rentals on holiday lets. Plaque must be visible on property.
- Castile & Leon – Property must be fully furnished, no single-room occupancy.
- Catalonia – Owners must have copy of guest passports and log details with police, landlords must pay €145 to have their home quality graded.
- Extremadura – Draft decree not yet in force.
- Galicia – Two types of registration – one for max stays of three months and one for 30 days. Guest information must be logged.
- La Rioja – Property must be fully furnished. Homes must be rented for at least three months a year and price must be all-inclusive.
- Madrid – Holiday rentals must last for at least five days. No single-room occupancy. Properties must have free wi-fi.
- Murcia – Owners must store guest information.
- Navarre – Minimum space standards, classifications in force (luxury, first, second, third).
- Valencia – Owners must start renting within two months of registration. Those with five or more properties must register as tourist company.
Some of the most important housing laws in Spain refer to the private rented sector, with landlords needing to adhere to certain regulations around protecting the rights of tenants.
Drawing up contracts
Whether you’re a tenant or a landlord, you should always have a written tenancy agreement, and it should be clear as to whether it’s a long-term or short-term agreement – as the latter provides the tenant with fewer rights.
For example, long-term tenants can stay in the property for a number of years on a ‘rolling’ basis, while short-term tenants need to leave as soon as the initial contract ends.
Long-term contracts last for at least a year. If you agree a one-year contract, this will continue to be renewed each year on its expiry up to a minimum three year term – unless the tenant chooses to break it or the landlord had clearly specified otherwise at the start.
After three years, the landlord can terminate the contract by giving 30 days’ notice.
Tenancy deposits in Spain must be protected in a third party scheme and returned within one month when the tenancy ends.
If the landlord needs to use some of the deposit to fix damage caused by the tenant, they can make a claim on this, and if needs be the third party can adjudicate on disputes.
Tenants in Spain aren’t required to pay for normal wear-and-tear that occurs during their rental period.
Find out more about tenancy agreements in our full guide on renting in Spain.
Energy performance certificates
If you’re renting or selling a home in Spain, it’ll need to have an Energy Performance Certificate (EPC).
The purpose of the EPC (Certificado de Eficiencia Energetica (CEE)), is to ensure that homes are able to run efficiently and reduce carbon dioxide emissions.
EPCS are graded from A to G, with ‘A’ being extremely efficient and ‘G’ being very inefficient.
Landlords letting homes for longer than four months must have a valid EPC for the property, with fines given to those who don’t adhere.
EPCs in Spain cost around €300. If energy improvements are made, you’ll need to have the home reassessed and an EPC reissued.
Empty homes in Spain
It’s estimated that there are more than three million homes currently empty in Spain, and the government is looking to rectify this.
The government hopes to bring in regulations that could potentially result in higher taxes or fines for homeowners who leave their properties empty, as it attempts to free up more properties to be sold and rented.
Buying property off-plan in Spain
There has been much controversy about buying homes off-plan (before they’ve been built) in Spain.
This is because during the financial crash many purchasers bought homes that ended up never being built, because developers went bankrupt.
If you’re buy a home off-plan, you’ll need to ensure you have the following documentation:
- Proof that the construction has been completed in accordance with what you agreed (certificado final de obra).
- Licence of first occupancy (licencia de primera occupacion), which will be issued by the town hall to confirm the property is habitable. You won’t be able to connect utilities such as water and electricity without this.
If a developer fails to complete the property by the agreed deadline, you can demand to:
- Cancel the contract and have your deposit returned (with interest)
- Extend the deadline
If you want to cancel your purchase, you’ll need to appoint a lawyer.
Equity release in Spain
If you have a property in Spain and want to release some of its value as income or a lump sum, you could consider an equity release scheme – such as a reverse mortgage (hipoteca inversa) or lifetime loan.
Reverse mortgages are usually aimed at retired homeowners over 65 and involve homeowners borrowing money against the value of their property.
Before rushing into equity release 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.
You should also take tax advice on any inheritance tax implications, and if you’re unsure check with the Spanish Tax Office (Agencia Tributaria).