New Legislation and Potential to Rent
Ibiza is seeing a record number of visitors in 2017 with passenger statistics increasing by some 10% on 2016 and actually doubling in the decade since 2007. The Airport authority AENA reported a total of 10,069 people passing through the airport during June alone, this equates to 336 arrivals and departures per day, or one every four minutes. Bearing in mind the soaring popularity of the island, now would seem the ideal time to buy a property for rental during the lucrative summer months, but how will the Balearic Islands new letting laws affect investment in private holiday rental?
The legislation, finalised on 22nd July, leaves holders of current licenses unaffected, whilst introducing three key components of change to new homeowners hoping to lease their properties to tourists.
From July 18th, a one-year moratorium will put the brakes on any further applications for tourism licenses whilst the governing bodies of the Balearic Islands decide which areas are suitable for licenses to be granted. The criteria for this decision is unknown, as yet, however, once plans are made, new five-year permits will be granted to applicants who fulfil the requirements for registration. No new permanent tourist licenses will be granted.
Under the newly introduced laws, homeowners can let their own properties to tourists for up to 60 days per year. This scheme, known as, Habitual Housing, is aimed at permanent residences and not second homes on the island. Permissions will be granted on a five-year basis and on payment of a 2,000€ license fee. Prohibition of tourist rental in multi-family apartment blocks has technically been repealed, however, the Island Consell will need to consider new laws to legalise holiday rental on a regional basis.
Each area and every property, will be considered on its suitability for tourism, but, it is hoped that given the situation in Ibiza, officials will show lenience in granting licenses for private holiday rental and take into account the pressure on hotel and apartment complexes in the tourism sector during peak season. The good news for potential investors is that any property holding a current license will retain its letting permissions indefinitely, regardless of its location.
Another aspect of the new legislation is the removal of the blanket ban on holiday rental in multi-family apartment complexes, although it remains to be seen what restrictions will be put in place and which zones will be deemed suitable. The Government simply cannot ignore the figures showing that 2017 will see some eight million visitors to the island and that private short-term rental is required to supplement hotel accommodation and support the infrastructure of Ibiza’s ever-growing tourist market.
For a relatively tiny island Ibiza is rich in its diversity of properties spanning every price range. Foreign investment looks set to continue its climb along with house prices. As a holiday destination Ibiza offers beautiful beaches, rural retreats and modern, major attractions, therefore, a decision to invest in property here, whether as a permanent residence, or for short term rental is looking, more than ever, like a sound prospect for the future.
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