Letting a property in the Canaries

Letting a property in the Canaries

I am updating and adapting here a reply I gave to someone on THIS post because following the successful first year review of 2013’s tourism legislation, and 2015’s decree regulating private tourism letting there is understandable confusion over what properties can be rented out in what way and under what conditions. The following is the final situation, verified by legal opinion.

  • If you have a residential property you can let it out long term under urban letting legislation wherever it is, with a long-term residential contract;
  • or you can let it out short term in one of two ways:
  1. either as an arrendamiento de temporada (a contract for a specific purpose other than tourism/holiday) under urban letting legislation;
  2. or as a vivienda vacacional as defined by the new touristic regulation required by article 5 of urban letting law.

These vivienda vacacional (VV) lets must be in non-touristic areas, and owners must have made a declaración de responsable. I will be posting more about this “declaration” in due course, but it is not a minor issue, and comprises a range of documentation, legally-binding official statements, and compliance with regulatory prerequisites as outlined HERE. The final regulation is HERE. Moreover, owners must be registered for IGIC, and charge it on all invoices for all lets, and submit quarterly IGIC returns (see HERE). In addition, the statutes of the community of any property involved in VV lets must also not expressly prohibit commercial holiday rentals (many do, particularly in newer residential complexes). Infractions of the VV regulation are defined as “very serious”, and so with defined fines ranging from €30,000 to €300,000. Given that fines for illegal letting tend to be issued in the middle of bands, I would expect fines for violations of the new regulation to be around €150,000.

  • If you have a touristic property, you cannot let it out privately for holiday lets. This is fundamentally banned by tourism legislation which requires lets to be operated through the sole agency system – and deems any lets under 3 months to be touristic, and now complemented by the new regulation which says that VV lets must not be in touristic areas. Touristic property owners can either let out for holidays through their on-site sole agent, or via a temporada contract of between 3 months and a year. Fines for general infractions of these aspects of tourism legislation fall into the “serious” band, and so range from €1,500 to €30,000 – they are typically €15,000 -18,000 or so.

To clarify touristic and non-touristic areas, these are “areas” not complexes. This will be officially clarified in due course, but I fully expect it to be a definition based on the land classification in an ayuntamiento’s PGO (general planning arrangements).

All I would add to the above is that any owners still in doubt need as a basic first step to clarify with their local ayuntamiento how their land is classified, both in terms of the specific plot a property is built on, and the zone generally. There are some areas of Tenerife, for example, where land is mixed tourist-residential, normally coastal towns, and even these are excluded specifically – Callao Salvaje is an example of such an area.

The Canarian private letting lobby association Ascav has assessed that private holiday rentals in 90% of those properties which could have been brought into legality have now been confirmed as illegal. They say that they are horrified that the government has broken its pre-election promises to “regulate” the sector. They believed that they would be allowed to holida let widely, but as I’ve said previously, “regulation” was always likely to increase official control rather than loosen it, and as I suspected, instead of having to fall on its sword and yield to the private letting lobby, the Canarian Government has now coordinated its legislation and tightened loopholes so that the situation is more restrictive rather than less.

Please see HERE for the “Renting a property” information page, and HERE for the list of all posts I’ve made on the subject of illegal letting since 2010.



  1. Janet,
    It keeps mentioning ‘through a sole agent’ what is a sole agent and can anyone become one?

  2. Author

    A sole agent is an agent – i.e. a legal business licensed to be a “travel intermediary” – who has succeeded in getting 50%+1 of the apartments in a complex to agree to let through the agency. That is what the authorities will accept as a sole agent in the system that operates here, called “Principio de unidad de explotación” (principle of unity of exploitation). It has been defined in the law since 1995 as what is required for holiday letting on a tourist complex. So yes, anyone can become one, but there are legal and formal requirements, just as for any business.

  3. basically this is the death of the canaries as we know it. thousands of tourists a year use private apartments and now they are gone. business will go bust and the govt dont seem to have used common sene. this is scandalous. i hope they realise they ahve made a mistake sooner rather than later before the local economies collapse

  4. Author

    This is now the law – both tourism and urbanism legislation. It won’t be changing any time soon since it has been twenty years in the making to get to this point. You are very far from alone in your viewpoint but the numbers do suggest the policy for an upmarket drive, 5* hotels, and modernization of touristic apartments, is working. At least the numbers support the idea that it’s working and as such it will be impossible to divert them from their course. You asked earlier if anyone was appealing this: it has been appealed to the top, and supported by every court in Spain. If someone wants to take it to Europe, has lots of money and many years to spare, then that’s the only recourse left, in my opinion, but even then, Europe has previously confirmed the Canaries’ right to legislate their own tourism policies.

  5. From a residents’ point of view, some of us welcome this tightening up. People who live and work here, pay taxes and rates and contribute to the economy ALL YEAR LONG are entitled to have zones where we can live peacefully, away from tourists. Where we know who our neighbours are from one week to the next, where our community fees don’t have to be used to pay for new parasols by the pool every time tourists break them, where we are not awoken by suitcases being dragged over cobbles on the only morning we don’t have to get up at 6am. There are plenty of places for tourists to stay, areas they are welcome and very well catered-for, but Tenerife isn’t just a “holiday island” and residents are essential for the economy, stability and future growth of the island too.

  6. nova you are missing the point totally. if all the people that rent their apartments out are fored to stop have you any idea what that will do to the local economy? it will cripple local businesses. this will be worst than the time ryan air pulled out of fuerteventura. from experience landlords who let their properties tend to be good payers of the community charge and also look after their properties. i pay my taxes every year, i pay my community and i keep my property tidy. when i was sold my property i was told it could be let and granted i was naive but i had no reason to not believe it. over 50% of properties are let on our complex so thats approx 120 tourists every couple of weeks who will now not be visiting the island. multiply that thoughout the island and it will be devastating. You talk about people in work if we see tourists drop then people will be out of work. i tak to many business owners in fuerteventura and they are already struggling and this will only make things worst. how can stopping thousands of people from renting help tourist numbers. if you dont like tourists then why did you buy on a tourist island. you mark my words this is the end of the canaries as we know it and the economy will suffer. i am quit happy to get a licence and do it all legally but ive never been given that option so ive been tying my best to keep the apartment going without renting it out too much. this ruling now means i have two options, either rent long term because they wont let me rent short term (ridiculous), sell up or hand the keys back to the bank. we will now see huge amounts of property on the market which will devalue the who property market on the islands. the sensible option would have been to allow everyone to apply for licences and register their properties properly .

  7. okay janet hers a question for you. if i decide to sell and buy a property i can let to holidsay makers then what am i looking for? is it now possible to buy a property that is legal? from the sounds of it they have totally shut the door on anyone buying any property to let

  8. With all due respect, I am not the one who is missing the point. As I said, Tenerife is not just a “holiday island”. And I think you will find that most of these “thousands of tourists” you speak of will still come to Tenerife, but they will stay in accommodation that is regulated, with suitable facilities and insurance that will actually cover them if they have an accident during their holiday. As Janet stated above, the government’s own tourism figures support that claim. Tourism is officially growing with the controls, not dropping.

    And of course you have never been given the option to “do it all legally”, since by your own admission you bought on a complex that was designated residential and where tourist lets were illegal at the time you bought it, regardless of your “naivety”. You might want to consider that in relation to your question about why I bought an apartment in Tenerife when my intention was actually to *gasp* live here. As a resident, buying in a residential complex in a residential area, one of us was clearly more informed than the other.

  9. I agree that tourists are using the 5 star hotels and the sole agents of tourist controlled apartments are certainly rubbing their hands – however these visitors are fickle and will quickly move on to another island, another new hot spot, vastly different from people such as swallows who wish to rent in Tenerife for longer periods, up to 3 months in winter, where are they going to stay now?
    These people on the whole tended to return year after year for weeks at a time, supporting the local economy in many ways. The 5 star visitors wont be doing that.
    As for tourist apartments – there just arent enough of them and on the whole they arent good enough either, basic facilities usually, but where is the incentive now for their owners to spend good money on their own apartment when they have no say or control over who stays in it?
    I understand Nova’s point but at the moment it seems tourism chiefs want to dis-allow private renting in the holiday areas but encourage it in others. Not the usual way forward for tourism.

  10. Author

    To answer Dave, who wants to let to holidaymakers and to be legal … your choice is limited to tourist areas because these are the only areas now in which you can let short-term for tourist purposes, and you would then need to let out through a sole agent on a tourist complex – and be very very sure that you buy where there’s a sole agent who treats owners well.

    In your situation, a couple of complexes scream out … Paloma Beach in Los Cristianos is one. It’s legally touristic, has a sole agent who’s not moving out because it’s a family agency which has invested heavily in the complex (they’re multiple owners in it), and whose own financial interests are tied up with the success of it all. And they treat owners fairly! Look into Paloma Beach, Dave … link HERE. Another would be Royal Palm, again Los Cristianos, again a good agency, again totally legal, and again treats owners well … link HERE. These are the ideal thing that you need, and would keep you totally legal, and get you letting to tourists as you want.

    Your other options are to let short-term privately, but for this you would have to be outside tourist areas, register with the authorities, comply with the regs, and give legal contracts … but you wouldn’t be legal to let to tourists.

    The other alternative is to let long-term, in which case it doesn’t matter where.

    But to let legally to tourists you have to be in a tourist designated property and use the sole agent system, OR have a villa that conforms to the (in my opinion highly restrictive) criteria which would enable you to get an individual licence.

  11. This has gone on for so long now it seems that finally a definitive law has been passed – whether we like it or not. The problem throughout this whole process is the fact that there is no regulation of the system of sole agency. They are allowed to implement and operate whatever system they wish and this leads to owners of properties receiving derisory returns and being restricted on the use of their own apartments. This in turn leads to owners renting out their own properties – usually illegally.
    If the operation of the sole agency system had been regulated to offer fair returns for all parties, then it could have been beneficial to owners, sole agents……and Tenerife!

  12. I sympathise with apartment owners who have been mislead by agents into buying properties that fall under this legislation. But on the other hand I am pleased that some regulation and protection will be offered to people who rent properties where the landlord is operating legally with the correct permissions and protections, including adequate insurance, is in place. It may lead to an increase in prices and fewer properties being available but if it raises standards and protects people from the many scams that are happening I don’t think that is a bad thing. I also think that it will provide some relief to those people who bought on residential complexes whose lives are blighted by short term residents who impact on their quality of life. This is not something unique to the Canary Islands, major cities across Europe, including London and Paris are subject to similar legislation.

  13. If it helps, we are on a touristic complex where the owners formed an SL to be the Sole Letting Agent so we are all rubbing our hands! Anyone in a similar situation may like to consider this when their Sole Letting Agents contract is due for renewal.

  14. Hello tourist laws Goodbye Ryanair Goodbye Easy Jet.

  15. Author

    Actually the Cabildo is shortly to announce new routes here, and low-cost Norwegian recently started operating. I’m afraid the prophecies of doom haven’t materialised … and the law’s been in place since 1995, and enforced firmly since 2011.

  16. Hello Janet

    All very interesting, if not fairly depressing, but can you please explain what the “highly restrictive criteria ” are that allow an independent villa to rent touristically short term in a touristic area as I’ve missed them.

    Thank you.

  17. Author

    I outlined the proposed criteria HERE , but the final law is HERE – see article 31: at least 200 metres from the coast (100m in some cases), of a density of between 10 and 40 units per hectare depending on overall plot size, and with 40% and 20% limits as far as land use is concerned – 40% of the plot being developed and 20% of tourist land in the municipality.

  18. I am very pleased that the authorities appear to want to clamp down on the subject of illegal short term letting in residential complexes. However I doubt that I will see the huge numbers of illegal renters in my complex subsiding. After all it was always illegal to undertake short term holiday letting in residential complexes but that did not seem to stop owners from doing it. The one thing that would encourage me to sell up and leave Tenerife is the disturbance I continually endure from the illegal renters. There are many owners like me who do not want commercial letting in their complexes. I just hope the authorities will finally be able to enforce the law. I and others like me pay a hefty community charge; why should we subsidise the damage caused by the customers of the illegal renters. Nova is exactly right, the damage is predominantly caused by renting holidaymakers in our complex. Those who are renting cannot possibly be declaring their income from renting in Tenerife to the Hacienda can they? They would be publicising their illegal activities. I am also very sceptical that they are declaring their incomes to their domestic tax authorities. They are renting illegally and probably not paying the taxes due. I have no sympathy for them.

  19. Well put, Snowbird!

    I’ve been thinking some more about what dave jones said yesterday, echoing an argument that seems popular among the illegal letters about their illegal tourist lets being vital to the economy.

    if all the people that rent their apartments out are fored to stop have you any idea what that will do to the local economy? …You talk about people in work if we see tourists drop then people will be out of work.

    Based on the fact that I spend all my salary here, I am singlehandedly contributing around €30,000 a year into the local economy. If you consider that my salary is paid by a mainland-based company, I am not just recycling, I am actually diverting €30,000 a year from the mainland into the Tenerife economy! Was he really suggesting that some tourists who stay in his apartment and buy a few pints of beer and a couple of cooked breakfasts during their stay are more beneficial to the economy than I am?????? And that I don’t have the right to live in a quiet area and have an undisturbed lie-in on my day off????

    And by the way…

    if you dont like tourists then why did you buy on a tourist island.

    I’d like to see you say that to a Canarian!!

  20. Which Canarian shall we ask?
    One of the 251.341 unemployed?
    One of the hundreds of angry Canarian voices on the Ascav Facebook page?
    One of the Canarian food bank users who would think they had won the lottery being able to divert 30,000 euros from a country with a generous welfare state.
    You may not like it but the islands do rely on tourists.
    Foreign visitors will spend 13 billion pounds in London during 2015.
    That is an awful lot of hospital beds, doctors surgeries, school places,,,,,,,,,,,,,
    You may not like it but the fragile economy of these islands does rely on tourism.

  21. Author

    Just to clarify … Nova didn’t mean the UK (a country with a generous welfare state). She was talking as a permanent resident paid from the mainland – i.e. Spain. Yes, the islands rely on tourists. And now those tourists have a controlled and regulated industry to rely on and be assured in. They will have a choice of upmarket hotels or modernized and renovated apartments – this is the part of the law that everyone forgets or ignores, but it is the major part of the law.

    People think that the illegal letting situation was the main purpose of the 2013 law. It was not. It was to tighten up controls, ensure quality, and get the old “tourist offer” updated by force. Everyone says that tourists want better quality apartments and that’s why they stay in private ones. This is what the 2013 law sought to address.

    Nothing has changed with “a new law”. Letting hasn’t suddenly become illegal. What has happened is that illegal activity has now been codified into law, as has the “rolling moratorium” which refused letting licences to touristic property development. That is now “the law” so there’s no need for a moratorium any more. The only touristic licences that will be granted are for 4* minimum standard properties.

    It’s really quite ridiculous to accuse the authorities of not wanting tourism. Of course they want tourism. They are the first to understand that we rely on it. This is why they want to control it, and ensure that it’s quality. It is also why they have developed a policy to go upmarket. Many disagree with it, and I myself thought it was misguided, but the figures so far are supporting them. And no, it’s not a new policy that will suddenly see jobs disappear, flight routes evaporate, shops close, etc etc etc. It is a policy that has been in development for the last five years at least and all indications are that it is working. But then, despite all the names the authorities and tourism professionals here are called, this is their business, and they know it inside out. It’s not ours, and we don’t.

    Spain, like Europe, like the world, has been in economic crisis. These islands, which have felt the full force of “la crisis”, have survived precisely because tourism has kept them afloat. And from now, tourism legislation will ensure that tourists can rely on quality – and quality control – and urban letting legislation will ensure that owners who actively seek to break the law and undermine established tourism policy will find it harder and be less likely to get away with it.

    I know it is not universally popular, but arguing as though it’s all new, or can somehow be changed, is missing the point. The legislation as it is now has been twenty years in the making, has been challenged in Spain to the highest courts and in Europe itself. In all cases, the Canarian government has been confirmed in its right to do this. We might disagree, we might not like it, but the law is set, and not about to change.

  22. Thank you Janet. I’m sure the increased business in Tenerife’s hotels and designated tourist areas are creating and maintaining more jobs than illegal lets in private apartments, so anyone using the unemployment figures as an argument might want to consider which “side” that’s actually an argument for.

  23. I would like to make a few comments on the suggestion that in the unlikely event that illegal holiday renting is actually curtailed by the authorities the economy will collapse. (Whether it will be curtailed remains to be seen, passing laws is one thing, enforcing them another). I base my comments on my own experiences living in a residential complex in the south of Tenerife, which is the subject of illegal renting. Whichever nationality is doing the illegal letting, they tend to let to their fellow countrymen. They do not live in Tenerife but are fortunate enough to own a property here. The rental income they receive is usually paid by the renter in the owner’s country. That rental income doesn’t even come to Tenerife so is of minimal benefit to the local economy. Moreover the income is not declared for tax purposes in Tenerife and therefore no benefit is gained by the relevant fiscal authority. I suspect that these illegal renters are not so much concerned about the alleged catastrophic impact on the Tenerife economy if they are forced to stop letting, but in reality are worried about the loss of their own income.
    In my experience the english renters generally employ english or non Canarian people to clean their apartments; they are not providing employment to Canarian nationals. Four adults can stay in an apartment in my complex for one week paying £150 each for the week. This is a cheap holiday. The low cost often indicates the overall budget this type of holidaymaker has to spend in Tenerife. They don’t spend vast amounts keeping the economy afloat and providing employment for Canarian nationals. The Engish will gravitate to the english bars and restaurants . Similarly other nationals seem to frequent their own bars. These establishments are expatriate owned and do not employ vast numbers of local Canarians. In fact I am not sure that I know of any Canarian owned bar in my locality. The holidaymakers will buy general merchandise in the local shops. These tend to be Indian and Morrocan owned. Show me a cameara , watch , jewellery shop that is not Indian owned. These establishments provide employment for their own nationals They might even go to one of the regular markets where the stall holders are predominantly English, African or Morrocan. If they want a night out they might go for example to one of the popular restaurants in the Safari Centre in Playa Las Americas. Most of these restaurants are part of an English owned chain. I must say that every time I have been in one of these restaurants I have never been served by a Canarian waiter. They are english, continental, chinese or from the eastern block. They might go to the chinese restaurants, no prizes for guessing who owns them and what nationality the waiters will be.
    It is my opinion that the illegal renters do not significantly support the Tenerife local economy or provide employment for vast numbers of Canarian nationals.
    In my experience the only significant employers of Canarian nationals in the tourist areas are the hotels. In the hotels near to me, many waiters are local Canarians who travel daily from the north of the island. These hoteliers are the people who are painted by the illegal renters as the bad guys.
    In my opinion the Canarian tourist authoritie/government have correctly identified the sectors and the type of tourism that is really contributing to the Canarian economy and are seeking to protect and to develop it. The figures appear to show that the policy is successful.

  24. Snowbird, I have no knowledge of your location so I’m not about to disagree with your observations which no doubt will be correct, except when you say “Moreover the income is not declared for tax purposes in Tenerife” do you know this to be a fact or is it your assumption? (There are plenty of people who are paying the correct Spanish tax as well as the correct tax in their home country if they are foreign, even if the government says the letting is illegal.)

    But I do disagree that your observation is shared throughout the 7 Canary Islands. Where I am in Lanzarote the ownership of the bars, restaurants and other businesses is by various nationalities, including Canaries born and bred, and the visitors and customers are also mixed. All of these benefit from all tourists in all accommodation, be it “legal” or “illegal”, except perhaps the tourists in legal all inclusive accommodation.

  25. As I said my comments were based on my own experience and knowledge in south Tenerife.

  26. I suppose what I’m trying to say, in a roundabout way, is that the one tourist model that the government is trying to impose is not suitable for all areas or all the islands and, contrary to your observations, in some areas many of the current tourist related businesses (indeed all businesses are either directly or indirectly dependant on tourism) are quite successful and contributing admirably to the local economy. Why kill them off?

  27. Author

    It’s all a matter of control … in their experience and opinion, that is what is needed.

  28. Janet, May I congratulate Snowbird. He/she has got it just about right. I support everything mentioned but feel that not all is lost to other nationalities reaping whatever rewards there are on offer. There are still the fishing, agriculture, and wine industries which hopefully employs the local Canarian.

    But with regard to your other comments, you have ‘hit the nail right on the head’.

    I also own a property on a residential complex which my wife and I used to enjoy for twenty something weeks of the year but like you have a large number of owners who short term rent and who disregard the law and will continue to break it even now. What started off as a beautiful complex is now turning into an ‘aparthotel’, (in name), with towels being put down on sunbeds at 08:30 each morning even though signs around the pool areas state they shouldn’t, plus the number of lilos and dinghys being used. We get no help from the president or his committee, (some committee members are actually renting short term ). No one can have a swim because of the ‘Flotsam and Jetsam’. I could go on and on but no one listens. I think you know what I mean.

    Anyway, I thank you for your comments Snowbird your observations..

  29. Can I say I feel sorry for any owner on a residential complex that has the problem with unruly visitors, but let us not forget some of these owners have been misled by estate agents when they purchased their properties, even Canarian owners.
    If you take the figures from Tenerife’s own web site for the last 5 years it shows an Increase of 9.4% in visitors to the Island, great you might say but this is a decrease on the previous 4 years, way before the world banking crash that caused, problems mainly in Europe.
    Also, if you take their figures for the same period, there has been an increase of 2.4% in hotel beds and an decrease of self catering accommodation of 36.2%, I wonder what the unemployment and the visitor figures would have been if the Government had not followed the Ashotel pressure to implement the 1995 law.
    My self it think it would have been in a lot healthier position, and locals would not have been put out on the streets and soup kitchens and charity would not have been needed

  30. an Increase of 9.4% in visitors to the Island… an increase of 2.4% in hotel beds and an decrease of self catering accommodation of 36.2%

    That raises an interesting question for me. Can official government figures really ever have included black market illegal letting? Paying a cleaner cash-in-hand won’t contribute to a decrease in unemployment figures, so how can those tourists staying in unreported, illegal accommodation contribute to tourism figures, now or at any time in the past?

    As for owners who bought in ignorance of the law, I felt sorry for them when the law was first enforced, but continuing their activities four years on is just wilful flouting of it. Now the law is clearly confirmed and final, hopefully that will start to change.

  31. Some of the latest comments from Nova,Terry & Snowbird seem very resentful to owners who through possible no fault of their own may have to carry on renting Illegally because they have a mortgage to pay, they say it is there fault, what about the shoe being on the other foot. If I was going to buy a property to live in or spend 6 months of the year here the LAST place I would buy a property in is the SOUTH, OK if you like night clubs,discos & the kiss me quick boozy environment. I would have thought the area slightly Inland where Janet lives or on the West coast, there are no night clubs,discos, just the odd sports bars, which again I do not understand why people come on holiday to go into a bar & watch a screen which could have 2 slugs racing across it.
    Also 99% of the local bars, restaurants, shops & even the new Lidl here are staffed by locals.
    Your comment about tourist figures is also incorrect these are gained by passengers arriving through the airport, they do not know what type of accommodation they are staying in, perhaps you should have done a little more homework when you purchased your property?, you may not be so bitter against others who have fallen into a similar position.
    There could be one other reason property prices on the West Coast are more expensive than the South, but then you allways get what you pay for don’t you!!!

  32. What a silly provocative post IDBI. The last property that was sold in my complex sold for circa 750,000 euros about a month ago. You are suggesting that when I purchased and the estate agent advised me that letting was illegal, as it was a residential complex, then I should have assumed that others would nonetheless be renting illegally. I did extensive background research before buying and looked at a number of cheaper properties on the West coast as it happens. There are no night clubs, discos or kiss me quick hats in my neighbourhood, just 5 * hotels and million euro villas. It is primarily a residential area. If you haven’t got anything constructive to say other than to try and condone and support the illegal renters then I presume you have a vested interest in illegal renting.

  33. “Provocative” is the word. There are so many points there that are asking to be pulled apart, but it’s clearly pointless. Ultimately, regardless of my or anybody else’s personal feelings, the law is the law is the law is the law is the law, and in this matter it is firmly on our side.

  34. Author

    And I think that’s an appropriate note on which to close comments on this post, which was after all intended as an “in a nutshell” guide to what is now possible under URBAN letting legislation … though of course, tourist letting is inextricably tied up with that. The law is indeed the law is the law is the law, and at least we can say that after twenty years, we finally have a cohesive and consistent policy between the various areas of law. Can I remind anyone who would like to continue debating that there is an Illegal Letting Discussion page HERE, where they are more than welcome to post their comments.

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