In Andalusia, a RTA (urban) or VTAR (Vivienda Rural) rental license is required if you rent out on a commercial basis for less than 2 months. Be aware of the First Occupation License (Licencia de Primera Ocupacion) for urban properties. Also, all bookings must be reported to the Guardia Civil. Next to that, you need to pay IRNR income tax over your rental income. So all together a lot of costs and work, especially if you buy as a commercial investment. Therefore be realistic about your occupancy rate and profit calculation. Also, the exact business formula is important for the type of rental license.
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Holiday rental home Andalusia
A lot of people buy a house in Andalusia as an investment for short-term rental to tourists. All together there´re quite some costs and considerations. Try to gain as much advice as possible (lawyer, real estate agent, internet). And make a realistic prediction of the rental potential. There´s lots of competition when it comes to rental, especially in low season. So be critical if the income is the main reason for your holiday home purchase in Andalusia.
Obligations & costs holiday rentals
- Rental license: First of all you need your rental license, otherwise nowadays you are excluded from rental sites like AirBNB, Bookings.com, Spain-Holiday, etc. Read more about the different licenses in the paragraph below.
- Income tax: Secondly you are to pay tax over your rental income. Fiscal residents in Spain do so once a year through the IRPF income tax. Non-fiscal residents submit their IRNR income tax forms 4 times a year (instead of once without renting out) through a gestor (accountant). The tax rate is about 20% and there are some proportional deductions allowed over official bills.
- Guardia Civil: Thirdly officially every single booking must be reported online to the Guardia Civil within 24 hours of arrival. So, just with a hotel booking. The paperwork (contract with signature plus copy passports) must be kept for 1 year for inspection checks. At the moment there aren´t so many checks yet, but you can have trouble. For example, if your renters are in contact with the Guardia Civil over another issue. Sooner or later the systems will be linked. And then the Tax Office can check if you do declare all your income honestly.
- Other costs:
- Rental commission agent
- Publicity costs
- Key management/maintenance
- Cleaning costs
- Electricity and water use
- Administration costs gestor / accountant
- Devaluation furniture, etc.
Non-professional renting out, by the way, to the family or friend is allowed without registration number and without tax declaration.
There are 3 kinds of licenses for short-term / holiday rental.
a. Rental License RTA
Since May 2016 exists a new compulsory Rental Registry (RTA) for urban properties. This Registro de Turismo Andalucia checks if all properties comply with the minimum quality requirements. On the checklist you´ll find among other points:
- First-Aid-Kit
- Fire extinguisher
- Tourist information
- Emergency phone numbers
- Regulations Community of Owners
- Manuals electrical equipment
- Official complaint book (with visible notification)
- Windows in every room
- Max. amount of beds in total (15) and per room
- Heating & cooling (air-conditioning will probably be withdrawn after a judge recently ruled this to be excessive), etc.
The RTA conducts sample checks on a regular base but these are announced before.
Important: This license isn´t for a business so you can´t offer extra services like breakfast. If you do want this (Bed & Breakfast/hostel) then you need to apply for an Opening License at the Town Hall. This is the Licencia de Apertura (see below).
License of First Occupation (LPO)
A difficult point in the application of RTA rental license for an urban property is the LPO. This is short for Licencia de Primera Ocupacion (First Occupation License). With the application in the rental registry, you automatically declare to have this, otherwise, you won´t get a registration number. But many properties don´t have this license (anymore). The LPO namely isn´t part of the standard purchase requirement within the legal investigation of the lawyer/solicitor. And there´s also no other authority that ever asks for this document… Since March 2018 however, it has come to light that the RTA registry of the Junta de Andalucia in some cases gives a fine for not having it.
Licencia de Primera Ocupacion para Fines Turisticos
In many Town Hall it was temporally possible to apply for a Licencia de Primera Ocupacion para Fines Turisticos (a LPO ´light version) but it looks that this isn´t legal and this procedure will be canceled in all Towns. This means that you have to apply for a normal one. For an individual house, this isn´t a big difference, but if you have an apartment you´ll need to apply for the license for the whole building. Also, you need an individual water meter and some Town Halls only accept certain water suppliers.
Therefore you basically have 4 options if you want to rent out your place:
- Copy LPO: Your lawyer can try to obtain a copy of the old LPO at the Town Hall -if it exists- through an official standard letter. In certain towns the answer can take more than a year.
- New LPO: If the City Council can´t provide you with a copy, then you can try to apply for a new one. The bad news is that all costs including tax and architect might be rather high and the Town Hall might put requirements that aren´t possible for you house.
- Accept risk of fine: Doesn´t have your Town Hall a procedure yet (like Nerja)? Then you can consider taking the risk of a potential fine.
New Build projects nowadays always have their License of First Occupation, otherwise the sale won´t be signed.
Your lawyer or gestor can arrange for the application of the RTA rental license at the Junta de Andalucia and there are no reoccurring costs.
b. VTAR Rental License Vivienda Rural
For houses in the countryside or in towns with less than 20.000 inhabitants, there is another license: VTAR (Vivienda de Turismo de Alojamiento Rural). It´s almost the same and the inspectors use the same checklist as mentioned above. For the VTAR license, however, there are some important differences.
- Air-co: Air-conditioning isn´t an official requirement
- LPO: Because of the legal status of houses in the countryside in practice the License of First Occupation isn´t checked by most inspectors. However, you can expect that in time the DAFO certificate will be the standard for the VTAR license. Unfortunately of course no-one can predict yet if this would also apply for licenses that already have been granted.
- Maximum 3 months: With the VTAR license you are only allowed to rent out for a maximum of 3 months (90 days) in total per year. I don´t have any knowledge of checks at this moment. In future however, this could be the case through the compulsory registration of all bookings at the Guardia Civil and/or the income tax application.
- Sign Vivienda Rural: You are obliged to have a standard entrance sign which says Vivienda Rural, your registration number, the official name of the house and the logo of the Junta de Andalucia.
Just like with the normal RTA license: Because you aren´t a company you can´t offer extra services like serving breakfast (B&B / Casa Rural: see paragraph Opening License below).
Important: More and more municipalities automatically start the DAFO procedure for a property in the countryside if they receive notification of for example the granting of a rental license by the RTA. So check upfront with your lawyer/solicitor if this won´t cause any problems and ask for a price calculation.
c. Opening License of a business (B&B, hostal, Casa Rural)
If you have bigger plans with more than 15 guests, extra services as breakfast or -in the countryside- with more than 3 months a year? Then you must apply for an Opening License for a business at the Town Hall. This is quite a bit more expensive, complicated and it has tax consequences.
Keep in mind that you won´t have guarantees befóre the completion of your purchase. This is because the granting of this permit easily takes 6 to 12 months or even worse. Besides, no seller will accept this point as a limiting clause for the private contract. This is simply because this permit has no relation to the purchase itself.
Application Opening License by architect
An opening license needs to be applied at the Town Hall by an architect. He can tell you about the technical requirements of every business type, but he can never offer a 100% guarantee for the future granting of the opening permit. In case you completely want to avoid this risk, then it´s best to look for an existing business to take over, with or without financial goodwill.
Future restrictions holiday rentals
Keep in mind that politicians always can decide to restrict rental offers. In the larger cities, there´s an on-going discussion about this subject because of the disturbance for the neighbours (community), that might get a vote in this. Also many homeowners switched from long-term to short-term rental. This causes empty homes in low-season but also a price raise for the inhabitants of the city (both for buying and renting). If limiting rules will be introduced, they might only apply for new licenses. Therefore I would advise you to not wait longer than necessary with the application of a RTA rental license if you have your License of First Occupation.
In the countryside nature protection becomes more and more important and that therefore politicians might decide to limit the rental offer. Also here it might be advisable to not wait (for houses with a DAFO).
Having the RTA / VTAR permit of course isn´t an obligation to indeed rent out. Besides the application itself, there are no other costs.
Referrals & references real estate agent & lawyer:
Need a referral for a good estate agent in Andalusia? Or like to receive an example offer for the legal investigation of a specialized and independent lawyer? Find out more through the link above.
©2023, Ariane van Wijk