Short term holiday lets in the Canary Islands
A recent law in the Canaries banned certain short term holiday lets of homes to tourists.
The holiday rental for touristic purpose by individuals in the Canary Islands was regulated in 2015 by Decree 113/2015 of 22 May 2015. This Decree approved the Regulation of Holiday Houses (Reglamento de las viviendas vacacionales).
The limitations of the regulation for holiday rentals in the Canary Islands have been questioned since it came into force. Currently there is an appeal pending resolution submitted by the Canarian Holiday Rental Association (Asociación Canaria de Alquiler Vacacional).
Some conditions could be questionable in view of regulations in force in other Spanish regions. But it is particularly important to note that the essential condition for granting administrative licenses for the exercise of the activity does not depend on the characteristics of the individual house, the designation or category with which it should be promoted. It rather depends on the type of urban classification of the land on which it is located. In other words, if said dwellings are located on land qualified as touristic by the local or other competent authorities, obtaining such a license would not be possible.
Consequences of the current regulation on short term holiday lets in the Canary Islands
According to the regulation, the majority of owners who have their homes near the coast or more populated areas developed for tourism, at the moment, will be banned from personal exploitation of houses for the short term holiday lets. Homeowners are being forced to formalize a contract for short term lets with a professional agent in the sector.
For investors, the choice of location is crucial. In 2015 the Canary Islands received 11.6 million foreign tourists, mostly in Tenerife and Gran Canaria. Tourism to the islands is not seasonal, but constant throughout the year. The average cost per tourist and day of one hundred thirty-three euros and sixty cents (€133.60).
Hotel occupation rates remained at around 74% for the whole autonomous community in 2015. They increased to more than 76% during 2016, so the profitability of real estate is among the highest in Spain.
However, in order to ensure maximum profitability on the purchase of a primary or secondary residence in the Canary Islands, it is crucial to know what the urban situation is of the property you intend to acquire.
Encarnación García Caso
