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la nuova legge sulle vivienda vacacional alle canarie

November 7, 2024 Daniele Piccoli No Comments Legislation/Laws

The New Vivienda Vacacional Law: Less Supply, More Earning Opportunities for Investors

Why Investing in Canary Island Vacation Rentals Is a Winning and Safe Choice with the New Law

The impending entry into force of new vacation rental legislation in the Canary Islands, scheduled for the end of 2024, has raised great interest and some concern among real estate investors. The new regulations impose stricter standards for properties intended for tourist rental, but for those who know how to seize the opportunity, this law opens the door to a valuable market with a much higher potential economic return. Below we explain why demand for vacation rentals will not only remain strong but continue to grow, and why complying with the regulations now is the most advantageous strategic choice for investors.

Vacation Rentals: An Essential Sector with Growing Demand

The Canary Islands are a popular destination for tourists from all over the world because of the pleasant year-round climate, natural beauty and cultural richness. For these reasons, the short rental market may never disappear; in fact, demand for vacation rentals is expected to grow even further. The Canary Islands attract a continuous flow of tourists, and short rentals in independent apartments are becoming the preferred choice for those visiting the archipelago, especially among more mature travelers and families.

New Tourism Trends: Private Apartment is the Preferred Choice of Tourists

Today, tourism has changed, and travelers are looking for more free and flexible experiences than those offered by hotels. More and more tourists, especially older ones, but also families and groups of friends, are choosing to stay in private apartments for a number of specific reasons:

- Freedom and Flexibility in Catering

Apartment guests are not bound by hotel menus and schedules. They can choose to cook their own meals, perhaps using local, wholesome ingredients, and have the freedom to eat when they prefer. This independence is a unique advantage that is increasingly appreciated by travelers who want an unencumbered stay.

- Larger and More Comfortable Spaces

Apartments offer much more generous space than hotel rooms, which are often limited in terms of square footage. Having a living room, a kitchen, separate rooms and even a private garden or terrace allows guests to fully enjoy their stay, feeling like home but with all the comforts of a vacation.

- Flexibility in Schedules

With an apartment, tourists can manage their time as they please, without being tied to meal times or cleaning schedules as in a hotel. This flexibility is especially appreciated by travelers who want to enjoy the destination at their own pace, without imposed limits.

- Personalized Services and Greater Authenticity

Vacation rental owners often offer personalized welcome and services that are not possible in hotels, such as advice on local activities, leisure facilities, and suggestions for fully experiencing the local culture. For many tourists, this makes for a more authentic and enriching experience than staying in a traditional hotel.

- Unique Local Experience

Apartments allow tourists to immerse themselves in local life, visiting markets, cooking typical dishes and living like residents. This authenticity is increasingly in demand by travelers who seek authentic and personalized experiences that are hard to find in hotels.

The New Law: Less Supply, More Earning Opportunities for Investors

The new regulations impose quality and sustainability standards that many owners may decide they are unwilling or unable to support. The reasons for this will vary: some owners will not have the funds for the required adjustments, others will not fully understand the potential of the market or will decide not to invest for personal reasons. In addition, increased controls will limit the activity of irregular vacation rentals, further reducing competition.

This decrease in the supply of tourist accommodation will produce immediate effects on the market: an increase in demand for vacation rentals in good standing and an increase in prices for short rentals, with higher returns for investors who will have adapted to the new requirements.

Benefits of Immediate Adjustment for New Investors

Compliance and Serenity for Investment

Adapting to the new standards now means making sure you comply with all regulations, avoiding the risk of having to take action in the future to comply or, worse, having your license revoked. Those who purchase and adapt their property right away will be able to operate peacefully in the tourist rental industry without fear of the new controls.

Increase in the Value of the Property

Properties that meet the sustainability and energy efficiency standards required by the law will increase in value. Energy efficiency, climate control systems, and access to modern infrastructure (such as electric vehicle charging) not only add intrinsic value to the property, but also meet tourists’ demand for comfort and sustainability. This appreciation of property value is a major benefit for long-term oriented investors.

Reduced Competition and Increased Demand.

With a reduction in the supply of vacation homes due to the new requirements and increased inspections, compliant properties will become even more in demand. Those who choose to invest now will therefore have less competition and will benefit from increased demand, earning higher profit margins than at present.

A Higher ROI: More Investment, More Profits

Adapting to the new requirements involves an initial investment, but the benefits far outweigh the costs. With less competition and stable demand, prices for short rentals will rise, providing much higher returns. The return on investment (ROI) will be higher, and those who comply now will be able to earn higher profits in a regulated and secure market.

Contact us for Support in Renovation and Adaptation

If you are considering the purchase of a vacation home or already have a property that needs to be retrofitted, we are available to support you in renovating and bringing it up to the new standards. With our team of compliance and sustainability experts, we can help you enhance the value of your investment and position you in a market that will reward quality and sustainability.

Investing in vacation rentals in the Canary Islands is a strategic and forward-looking decision. The new regulations, with reduced supply and increased controls, will create a favorable environment for those who meet the required standards. With continued high demand and limited competition, the vacation rental market promises a future of growth and high returns for those ready to invest in a compliant and competitive property.

la nuova legge sulle vivienda vacacional

October 3, 2024 Daniele Piccoli 2 Comments Legislation/Laws

The New Law on Viviendas Vacacionales in the Canary Islands: End of the Era of Rogues and the Need for Professional Management

What may change with the new law on Viviendas Vacacionales in Gran Canaria?

Lately, many people have been asking me what I think about the new law on short-term rentals(Viviendas Vacacionales) that will soon be introduced in the Canary Islands, and what the possible consequences will be. This long-awaited legislation will bring significant changes, especially in Gran Canaria, where the tourism sector is one of the main economic sources.

Increased controls and penalties

The central goal of the new law is to combat squatting in the short-term rental sector. All landlords who rent their homes on a short-term basis will be obliged to officially register by obtaining a Vivienda Vacacional license. This license will be essential to operate legally and can only be applied for if the property meets a number of specific requirements under the law. Owners will have to register their guests through the police system, complying with all legal regulations regarding security and tourist registration

One of the key points of the law is also the obligation to maintain properties in perfect condition. Accommodations for short-term rentals will have to meet high standards of safety and hygiene, as well as comply with all applicable zoning regulations. Only properties that meet these criteria will be able to obtain or maintain a license. Homes that do not comply with the new standards will not be able to be rented out legally, and in the case of illegal rentals, owners will be subject to heavy penalties

The role of the Model 179

One control measure that has already been introduced, but is little known to many landlords, is the use of Form 179. This tool, which is used by the Spanish Internal Revenue Service, collects information on income from short rentals. Booking portals, such as Airbnb or Booking, are obliged to periodically report data on short rentals, including amounts earned and information about the property and the owner. In this way, those who rent irregularly are easily detected and risk tax penalties

Consequences for those who rent illegally

For those who rent illegally, the new law represents a call to action: it will be necessary to come into compliance. This means obtaining a Vivienda Vacacional license, registering guests regularly, and ensuring that the property complies with all regulations required by law. Failure to do so will result not only in heavy fines, but also the possibility of losing the right to rent the property. The regulations are designed to improve the quality of short rentals, reduce unfair competition, and ensure that all owners contribute fairly to the tax system

End of the era of "smart people"

With the coming into force of the new law, the era of “furbies” who improvisedly managed their properties in Vivienda Vacacional will end. No longer will it be possible to rent apartments independently and loosely, without speaking Spanish or having a local reference. The law will impose more responsibility: renters will have to be prepared for possible inspections by tourist authorities or the police. In addition, it will be impossible to continue evading taxes without having a Spanish bank account, with the practice of sending profits abroad. The new regulations aim to combat precisely this type of abuse

An additional aspect concerns agencies or the friend of the friend who loosely manages Viviendas Vacacionales. Those who manage a property will have to regularly issue invoices for commissions, cleaning, and guest stays, indicating precisely the dates of the stay. This will put an end to “housekeeping” by unskilled people, often recommended without real experience. The danger for owners lies in the fact that the Spanish Internal Revenue Service will cross-check these people’s bank accounts and then trace them back to the owners. This could lead to hefty fines for those who entrust their Vivienda Vacacional to individuals or agencies that do not manage the property in a way that complies with the law

My advice? Before entrusting the management of your Vivienda Vacacional to an agency, it is essential to make sure that the agency handles not only operational management, but also fiscal management. This is the only way to avoid ending up in complex legal and tax situations. Making sure that management is done properly is an essential step in protecting your investment

Future prospects

With the introduction of the new law and the controls already in place through Model 179, the short-stay rental market in Gran Canaria will undergo a significant increase in transparency and regularity. For landlords operating legally, this could represent an opportunity to emerge in a fairer and more regulated environment. On the other hand, those who do not comply will be exposed to increasing risks, not only in terms of penalties, but also in terms of losing the right to rent the property.

My thoughts on Vivienda Vacacional and its future in Gran Canaria.

In my opinion, despite tight regulation, it is very unlikely that we will ever completely eliminate the Viviendas Vacacionales market. This type of rental represents one of the biggest sources of income for the islands, and tourism is the engine that keeps the archipelago’s economy going. If no one were to invest in short-rent properties anymore, it would create a ripple effect that could lead to a significant economic crisis.

Real estate investments generate a vital flow of money: from buying homes to renovating them, from maintenance to paying taxes and fees. In addition to this, short rentals feed many other sectors: catering, transportation, trade and local services. If this system were dismantled, the impact would ripple through all these activities, creating a vicious cycle that would drastically reduce the inflow of outside capital. Less real estate investment would mean fewer jobs and less growth for the local economy.

In conclusion, regulation is important to ensure that the sector operates in a fair and sustainable manner, but eliminating Vivienda Vacacional altogether would not be realistic or desirable. The Canary Islands need a steady flow of investment and tourists to keep its economy alive, and the real estate and short-rental sector is an essential part of this

Trust us for safe and legal management of your Vivienda Vacacional

If you own a property for rent and want to ensure that it is managed in compliance with the law, without the risk of penalties or bureaucratic complications, you can contact us. Our team will take care of all aspects related to the management of your Vivienda Vacacional, including registration, issuing invoices, tax management and compliance with all regulations under the new law. With our experience, we will help you turn your investment into a quiet and secure success.

September 16, 2024 Daniele Piccoli No Comments vivienda vacacional

Gran Canaria and the Vivienda Vacacional Dilemma: Growing Tourism or Housing Crisis?

In recent times, the rental sector on the island of Gran Canaria has been at the center of a heated political debate, threatening to penalize both property owners and tenants. The focus is on the increase in tourism and the growing number of apartments for short-term rentals licensed by Viviendas Vacacionales. But is this really a problem?

Tourism growth in Gran Canaria: opportunity or threat?

Gran Canaria, an island that until a few decades ago was inhabited almost exclusively by locals and often ignored by mainstream tourist flows, is now a popular destination for visitors from around the world. New international flights, including those from the United States, testify to the growing interest in the Canary Islands. However, this exponential growth in tourism has raised concerns. Some argue that the growing demand for tourist apartments has led to rising rental prices and a reduction in the availability of housing for residents. But is tourism really the cause of all ills?

Gran Canaria's economy without tourism: is it sustainable?

Without tourism, what would Gran Canaria live on? Local products such as cheese, Valleseco strawberries, Lanzarote wine, papas arrugadas and Mojo are indisputable delicacies, but are they enough to sustain the island’s economy? The truth is that tourism is the economic engine of Gran Canaria. Real estate, short-rental management, housekeeping, maintenance, catering, shopping, transportation services, and excursions-all revolve around the revenue generated by tourists.

It’s not just about accommodations and hotels: tourism fuels the island’s entire economic ecosystem. For example, many restaurants, bars, and businesses depend largely on the steady flow of visitors. Organized excursions, recreational activities such as boat rides, diving, and guided tours of Gran Canaria’s natural beauty are services that exist and thrive because of tourism.

The real problem: shortage of public housing

The real problem is not tourism or Viviendas Vacacionales, but the lack of public housing for residents. The scarce housing supply pushes prices through the roof, forcing many to pay exorbitant amounts for often inadequate housing. In many cases, residents find themselves competing with tourist rentals to find decent housing. However, placing all the blame on short rentals and tourists is too simplistic an approach. The reality is that there is a lack of effective housing policies by the authorities.

Gran Canaria would need a sustainable development plan that includes building affordable housing for residents. Regulating the residential rental market could be one solution, addressing unfair practices such as one-year down payment requirements and three-month deposits for small pets. Creating incentives for landlords who rent long-term to residents could help balance the situation, without demonizing the tourism sector.

Viviendas Vacacionales as a scapegoat?

During the COVID-19 pandemic, rumors were already circulating that the islands would become a luxury for the few, with high prices to select tourists and high-end residents. With the global economy in crisis, tourism has proven to be one of the island’s most resilient resources, helping to keep it afloat during difficult times. Yet now there seems to be growing pressure to restrict the Viviendas Vacacionales sector, often painted as public enemy number one.

The reality is that without timely and reasoned intervention, the island’s most powerful tourism business could be compromised, leaving room only for large corporations and investment funds. If this happens, Gran Canaria risks reverting to a limited economy, without the prosperity brought by tourists. Mass tourism could turn into elitist tourism, accessible only to those who can afford high prices, excluding a large segment of both the local and foreign population.

Possible solutions: toward balanced regulation

Regulating Viviendas Vacacionales is necessary to clean up the sector from improvised and irregular operators. However, it is crucial to avoid regulatory excesses and anachronistic views that could stifle the island’s tourism market. A balanced approach can allow for sustainable coexistence between the needs of residents and those of investors and tourists. Solutions could include:

Fair taxation:

Ensure that revenue generated from short rentals contributes to community welfare through taxation that can be reinvested in public infrastructure.

Incentives for long-term rental:

Offer tax breaks to landlords who decide to rent their properties long-term to residents, thus helping to create a balance between tourist and residential rentals.

Promotion of sustainable tourism:

Encourage more sustainable forms of tourism that have less impact on the environment and local society, diversifying tourism supply and making it less dependent on short rentals.

Conclusion: finding a balance between tourism and residence

In conclusion, the growth of tourism in Gran Canaria represents both a challenge and an opportunity. The fault of the Vivienda Vacacional is often emphasized as the main cause of housing problems, but the reality is more complex. It is possible to strike a balance that allows Gran Canaria to continue to thrive as a tourist destination without sacrificing the quality of life of its residents. An open dialogue between government, property owners, residents and tourism operators is critical to developing policies that are beneficial to all.