Saturday, May 21, 2016

The Mess Of Regulating Holiday Rentals

The regional government is getting itself into a right old pickle over holiday rentals' regulation. A requirement for regulation, one in fact mandated by the sustainable tourism tax law, is that it should be in place within six months of that legislation's approval. The very fact of this legislative mandating says much for the cart-before-horse nature of the holiday rentals' regulation. It needed to have been in place before the tourist tax was implemented; hence why the government is in such a rush to regulate.

There is, one can say with certainty, going to be total chaos from 1 July. Legitimate rentals' owners and businesses haven't a clue as to how they are to collect the tax. Illegitimate ones have even less of a clue, but they are supposed to charge the tax, even if they are renting out illegally. So, the need to have regulated the market was essential prior to the introduction of the tax. Though even with regulation, it should be noted that Catalonia, where they have over three years experience with a tax, admit that they haven't smoothed out all the wrinkles when it comes to private accommodation: and in Catalonia, there is sensible regulation. 

Biel Barceló and his tourism director-general, Pilar Carbonell, have been doing the rounds of the island councils, presenting them with a draft for regulation. The ministry is going to have to re-draft it, as the councils aren't happy. This arises, in part, from the fact that responsibilities for tourism have been devolved to the islands, but even then, not in a standardised way.

One of the councils' concerns is that the regulation is pushing the onus further down the administrative chain to the town halls. The councils believe, and they are right to believe, that most (all?) town halls will not be in a position to meet demands of the regulation by the time it is introduced (presumably some time in September at the latest). How long would the town halls need? That's anyone's guess.

The situation is made very much more complicated by the fact that the overarching plans for intervention in touristic areas (PIAT) will take up to two years to be agreed: these are plans designed by the island councils. These will supposedly define where holiday rentals can be and where they cannot be. In the interim, town halls are to be left to decide where holiday rentals will be permissible within their municipalities. These decisions may later be in accordance with the island councils' PIATs or they may not be.

This seems like a recipe for utter confusion and potential conflict down the line, while the chances of the town halls being able to come up with interim decisions are, in any event, almost zero: or certainly not by the time the regulation comes into force.

The government is at pains to stress that each island should, within a general framework of regulation, be able to decide for itself how regulation will be applied: to which areas, for example. The consequence of this, however, is that each of the islands is likely to end up with differing interpretations of the regulation. And that's before the town halls have come up with their own. Who'd be an owner and who'd be a tourist trying to pick a way through the potential mish-mash of regulatory application this is all going to create?

Moreover, there is the situation by which the island councils are at different stages of having adopted tourism responsibilities. Mallorca hasn't as yet. Ibiza, by contrast, has, and it has announced its own get-tough policy on illegal rentals. So, in addition to the regional government (and the Hacienda) reading the riot act to non-declaring owners and illegally rented properties, there is an island council doing the same thing.

It is launching an "emergency plan" against illegal rentals. It reckons that there are up to 20,000 places (as opposed to actual properties) that are defined as illegal. But the need for such an emergency plan arises in no small part from the fact that the rules are so unclear. Will they become clearer with the government's regulation? You really wouldn't bet on it.

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