Holiday rentals on private houses made easier

A law passed by the Balearic Government last summer is facilitating holiday rentals from private houses. Thanks to this law, house-owners in Ibiza and Formentera who fulfil all the criteria set out in this law will be able to obtain a permit for tourist lets on uninhabited houses more quickly and easily. The competent body for issuing holiday let licences is the Consell Insular (Island Council).
From now on, house owners can present applications to the Consell Insular de Ibiza, and will immediately receive a provisional license, that is to say, they will be able to rent their houses immediately. Of course, in the case that later on they do not fulfil the requirements to become authorised lets, and they are denied a definitive license, then holiday rentals will not be permitted.
Next, we will detail the core requirements for obtaining a license:
•    As a general rule, a holiday let can only be carried out from a one-family house on a plot of land, and under no circumstances can apartments or blocks of flats be let.
•    The length of the rental contracts will be not be able to exceed two months, and should they do so, they will no longer be considered a tourist let.
•    The building cannot have more than six bedrooms or sleep more than twelve people and should have a minimum of one bathroom per three people housed.
•    Furthermore, the house owner should guarantee certain services to the tenants, which include, among others, the following: the rental property should be regularly cleaned and fitted with sheets and towels. The house should have a maintenance service and a contact person should be available to the tenants 24 hours per day.
Along with the application, the owner should present the Consell Insular with a series of documents. Apart from proof of ownership (i.e. an up to date Registration Bill), they will have to provide a location map and plans of the house interior. Moreover the applicant or their chosen professional representative should bring copies of the owner’s NIF or NIE, and proof that they have paid IBI (property tax). If the information provided is incorrect or incomplete, the license will be denied and the provisional permit will be revoked.
It goes without saying that VAT and income taxes on the income from the rental must be paid. The rent itself is subject to VAT of 21%. If other services are provided apart from rent, these may be subject to another level of VAT.
It is recommended that house-owners take expert advice about the process of gaining a license and the exact requirements for this, along with advice on the taxes that will be due.
Therefore, if you are planning to rent your house in Ibiza to tourists during the summer of 2013, you will do well to start the proceedings to apply for your license as soon as possible. •