Letting a property in Tenerife

This is a (hopefully) straightforward guide to the several ways that are legally available to owners to rent out their properties.

IF YOUR PROPERTY IS RESIDENTIAL:

  • you can let it out long term under urban letting legislation wherever it is, with a long-term residential contract – see HERE for the definition of long-term residential contracts, which are a minimum of one year;
  • or you can let it out short term as an arrendamiento de temporada (a contract of between one day and one year for a specific purpose other than tourism/holiday) under urban letting legislation – these are technically not “residential” contracts, and require a home address to be given where the tenant normally lives – an address, therefore, other than that of the property being rented.
  • or you can let it for holidays under the Vivienda Vacacional decree which is a a new category in tourism law concerning only residential properties. The decree does not affect, undermine, or in any other way mitigate the main 1995 and 2013 tourism legislation. This decree is currently being redrafted, and will probably become less restrictive because the redraft was forced by objections from the Monopolies Commission (see HERE). For the moment, its current form concerns residential properties only in non-touristic areas as defined in municipal PGOs (ayuntamiento local planning designations) – i.e. to be in wholly residential areas, not touristic or mixed touristic-residential. Complying residential properties must also not be prohibited from letting for holidays under the terms of community statutes if they are on a complex – and most residential community statutes do in fact prohibit holiday letting.
    • If all these conditions are met, owners must apply for a Certificado de Viabilidad from the Cabildo and upon receipt, then to the Canarian Government for the VV licence itself. The application must include a declaración de responsable before starting to let, a formal declaration that the terms of the decree are being complied with. The full requirements are detailed in the Decree HERE. In addition, owners have to register for IGIC and submit quarterly IGIC returns, as explained HERE.
    • Infractions of VV regulation are defined as “very serious” and so subject to fines for owners and any of their agents of between €30,000 and €300,000. The Canarian Government is currently redrafting this decree, supposedly to meet the Monopolies Commision’s objections, but how long this will take, or what its final form will be, are unknown. While it is being redrafted, inspections and fines of properties with VV licences are on hold, though the Decree itself remains in force. (NB: all other tourism inspections and fines are still being carried out and imposed).

IF YOUR PROPERTY IS TOURISTIC:

  • Owners of touristic properties on complexes cannot let out privately for holiday lets because the 1995 tourism legislation requires an officially registered on-site sole agent to manage all bookings and rentals. Owners of independent touristic properties, i.e. not on a complex, need to check their municipal and insular requirements: the regional Government requirements are very restrictive. Most touristic properties, however, are apartments on complexes, and these can be let out short-term in one of two ways:
  1. either for holidays through an on-site sole agent,
  2. or privately with a temporada contract of between three and six months.

Although temporada contracts come under urban letting legislation and are for rentals of between one day and one year for a specific purpose other than tourism/holiday (and with a normal home address quoted for the tenant because the let is not a “residential” one), Turismo deems any lets under 3 months to be touristic and says that fines will be issued for illegal holiday letting in violation of tourism legislation. A one day to three month temporada, therefore, is not safe for owners of touristic properties. Fines for owners and any of their agents range from €1,500 to €30,000 – they are typically around €18,000.

Apart from Turismo deeming contracts of under three months as touristic in nature, tourism legislation requires touristic properties to be made available for tourism purposes for six months of the year. Contracts of over six months, therefore, even though legal under urban letting legislation, would mean that the property would not be available for tourism purposes for the six months required, and so would be in breach of tourism legislation. There are fines for non-compliance in this respect. The only safe window for short-term lets of touristic properties on temporada contracts is three to six months.

 

All of the above is the legal situation concerning the rental of whole properties, but if you just want to rent out a room or rooms you can do so under the Codigo Civil, the basic law code. Tourism legislation means, however, that you can’t let out a room on a B&B basis nor as a holiday let, and as with whole properties, any lets for under three months risk being deemed holiday lets by Turismo.

 

 

 

18 Comments

  1. Janet please can you clarify our position. We have been told that Palm Mar has been redesignated from residential to a touristic area, and that has been a decision by Arona Council.
    Some people have taken this as a green light to rent out their property to holiday makers…..I fact it is my understanding that some property is now changing hands on that basis. We now find we have changing neighbours on a weekly basis. It’s not what we bought, and not what we want. How can someone simply rent out their apartment when there is no checks on equipment and safety, no reception to hand out keys and sort problems, and no one to refer to when these people ignore security or complex rules because they are ‘on holiday’ .
    Many years ago complexes were given the opportunity to vote on this issue….we have simply had this decision thrust upon us. Is there anything we can do, apart from sell up?

  2. Author

    I don’t think I’m likely to have missed the news of Palm Mar being redesignated!! So no, it remains a residential area in which there are no touristic complexes, and it remains illegal to rent out residential apartments for holidays apart from those registered under the Vivienda Vacacional scheme (as long as their community statutes do not prohibit it). As always, when given a claim that seems outrageous or incredible, demand proof, and do not accept anyone’s word that something has happened.

  3. Please can you clarify we are hoping to buy into a block of 27 apartments in Playa San Juan we would like to do short holiday let’s but the rules of the community states only 3 month lets are allowed under the new law will we be able to do short let’s

  4. Author

    No you can’t I’m afraid. As it says in the main post above, you can do short-term contracts of up to a year but these may not be for holidaymakers/tourism purposes. And you won’t be able to register under the vivienda vacacional scheme to do holiday lets because your community rules (I am presuming you mean statutes) don’t allow them.

    Note that there’s no “new law”. The old tourism law remains in place. The only new thing is the Vivienda Vacacional DECREE, a separate thing. This doesn’t apply to you because, as I say, there are three requirements to fulfill before you can register … 1) the property must be residential, 2) it must be in a residential area, and 3) community statutes must not forbid holiday letting.

  5. Thank you for your quick and helpful reply Now people are saying that the community rules were never notarised and registered at the land registry therefore they are not legally bound does that mean their rule on only 3 month let does not stand

  6. Author

    Community rules do not need to be notarized, but not all communities have statutes – statutes and internal rules are different things. And in any case, the law is the law. You are considering buying a residential apartment and so your ONLY possibility of doing holiday lets in it is by the Vivienda Vacacional scheme.

    If there is confusion in your community about whether you have statutes, and whether they or your internal rules forbid holiday lets or not, you need to engage a qualified lawyer to do your conveyance – indeed, since you have this legal requirement to any purchase you should engage a qualified independent lawyer. You should make sure that the lawyer knows that that the ability to let legally under the VV scheme is a precondition of your purchase, and request that it is specifically checked as part of the conveyance.

  7. Thank you so much for all your help what a super website you have

  8. Do you know if the rules are the same in mainland Spain re the Vivienda Vacational Scheme. I am looking to move to either Tenerife or mainland spain and want to buy a property to rent out on a touristic basis, ie short term lets to maximise income. I know you state that it is illegal to rent out property on a short term basis unless it has a registered on site sole agent but i havent heard this mentioned re properties on the mainland?

    Regards

  9. Author

    No, what I discuss here is Canarian tourism legislation. Tourism is something that is legislated at autonomous region level, as I explain HERE.

  10. Janet Fenny. Check very carefully what the law is where you intend to buy, don’t listen to the estate agent, even here in the Canaries where the touristic letting law is clear (ish) I still see properties being marketed which mention the possible income from tourist lets when they would clearly be illegal. As an example Barcelona have just introduced a tourism cap, see the story HERE.

  11. Author

    I agree with Stewart. The law I describe here is specifically Canarian tourism law, but the Canary Islands is not the only autonomous region of Spain with legislation like this.

  12. Thanks for your responses. To be honest I am more interested in moving to Tenerife than mainland Spain for a number of reasons. It is interesting that you say Stewart that estate agents may market properties as good rental potential and may be ignoring or not recognising the law that applies. I have looked at Owners Direct where obviously are a lot of properties for short term lets. Hope they are legal! However, how common is it that a property one could consider buying would have a sole on-site agent, ie Golf del Sur or other complexes which are for short term holiday lets. If they are in the minority then I would have to seriously reconsider my plans and look at other areas of Spain, which is a bit of a dilemma as we are much more familiar with Tenerife having been there several times. Any thought also on how things may change due to Brexit?

    Thanks for your advice though – very helpful.

    Janet

  13. Author

    Any properties on touristic complexes must have a sole agent to be legal. You might find THIS page helpful, and there are also these two points to bear in mind:

    1. If properties are being let for holidays on the internet by owners, the let is not legal because if the properties are residential, they cannot be let for holidays, and if touristic, then they must be let through the sole agent, not the owners. Having said that, the holidaymakers themselves are not committing any offence, but the owners are, and the Government issues fines of around €18,000 for the practice.

    2. Many areas which appear at first glance to be touristic are in fact mainly or wholly residential. The Golf del Sur is a case in point. It is vital that anyone buying a property knows what they want to do with it, seeks a property that fulfills those requirements, and then gets independent advice on the property they choose to make sure that it does indeed fulfil those requirements.

    As to how things may change due to Brexit, we can’t know. HERE are some of my thoughts.

  14. Janet F – I have looked at Owners Direct where obviously are a lot of properties for short term lets. Hope they are legal!

    I’m sure it will not come as a surprise to you that they are definately not all legal – I would imagine that the majority are not.

  15. Yes thats really concerning – i wonder if the owners actually know about this law?!! Its all a bit of a minefield. Thanks Janet and Sniff. I have made enquiries with several estate agents about certain properties and have asked if there is a sole on site agent so lets see what the replies are! I’m beginning to think the properties fulfilling the legal requirements are few and far between…

  16. Author

    It really is not a minefield. It is very clear. There are plenty who try to muddy the waters but there is actually no cause for confusion. You need to identify what you want, ask to view it, and when you’ve made your choice, get an independent qualified lawyer to confirm it’s as described. There are plenty of legal properties here, but you need to make sure that what you are being shown is really what is legal for your purposes – regardless of any assurances from anyone that it is.

  17. Janet has given you very good advice.

    Yes all the owners in Tenerife know about these laws, unless of course they just shut themselves away on their balconies while in Tenerife, read nothing and don’t talk to anyone while they are here. In my experience on every residential complex there are those who holiday rent and those who are quite against it. It is normally an issue on a residential complex despite what you might be told. Those who rent out illegally peddle the misinformation that renting is quite legal and or try to disguise short term holiday renting by describing them as lets to friends and family etc. They are interested in making money and are not concerned that they might be breaking the law or causing a nuisance to other owners. Clearly when these people try to sell their properties they will misrepresent the illegal aspect of renting on a residential property to encourage a sale. Some estate agents will also mislead prospective purchasers. Some owners will also excuse their activities on the grounds that they would not be able to pay the Communidad without renting, or they need to rent to pay the mortgage. If they can’t pay the mortgage the property will have to be sold thereby forcing prices in general down on the complex; if the Communidad is not paid the complex will go downhill. For these reasons some owners who rent illegally disingenuously promote the view that their rental activities benefit other owners and it is in the interests of the complex to have holiday renters.

  18. Author

    To avoid any confusion and to keep this page easy to read, I am now closing it to comments and questions. If you have a question, please post it on the Illegal Letting Q&A page HERE, and if you have a comment or point to make, please post it on the Discussion page HERE (which is where I’ve moved Dexter’s comment of 7 February 2017.

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