Have there ever been two pieces of legislation more complicated than those for the Balearics tourist tax and holiday rentals? Quite probably, but for the most part they do not pass into the popular consciousness. These legislative initiatives most certainly do, and they are of course linked.
The most complicated aspect of the tax is the way in which the spending decisions are being made. With holiday rentals it is the implementation, which no one ever said was going to be easy but which has all the potential of tangling the government in knots that courts will be only too willing to attempt to unravel.
The zoning concept for accommodation places to be permitted as holiday rentals in theory has some merit, but it will be the practice which decides how meritorious. A lack of clarity is emanating from the tourism ministry and the Council of Mallorca (the latter charged with determining the zoning, except in Palma, which is its own zone) with regard to what impact the zoning may have on existing legal rentals. Biel Barceló has intimated that some of these could be "de-registered". If so, then it would be an outrage.
An indication of the complexity of what is being envisaged can be found in the way that Palma is proceeding. The legislation has yet to be approved, but the town hall is pre-emptively studying the zones within the city. Assisted by the university, it is considering - neighbourhood by neighbourhood - how authorisation is to be granted for rentals in apartment buildings. A key element of this is to ensure that certain areas - the old town most obviously - are not turned into tourist accommodation "theme parks". The guiding principle is that there should be a mix of uses so that blanket authorisations (or prohibitions) will not apply anywhere.
The federation of residents' associations, which seemingly can't keep quiet for a minute just at present, has railed against the legislation, the potential for communities to be taken over by holiday rentals and the speculative nature of property acquisition with rentals in mind. The federation has a legitimate point, but the Palma study - what one can make of it - may well end up spoiling the ambitions of speculators. If it were to do so, then the government can anticipate seeking to make nice returns on the fines. The illegal supply will not magically evaporate, and one only needs to look at the situation in Barcelona to know that it will not.
Palma's approach may well act as a template for the Council to consider, but it has an even more complex task, given that the nine zones involve different municipalities, some which have tourist resorts and some which most certainly do not. Then one comes to how many properties will end up being authorised. The 43,000 places imply some 10,000 (possibly fewer), which doesn't seem like an awful lot for the whole of the Balearics. Ibiza will probably reject any, as the council there doesn't want them, whereas Menorca is keen, but divvying them up according to the zones (and Palma) sounds an administrative (and potentially legal) nightmare.
The government, apart from anything else, wants these places authorised so that it can add to the tourist tax kitty. Yet Barceló has been saying that regardless of a rental's legality or not, the tax will apply. This therefore includes rentals under the tenancy act. Legally, it is hard to see how this can be done, given the non-touristic definition that can be permitted under the tenancy act. It may yet be, though, that the Balearic government (and others) can persuade Madrid to amend the tenancy act and impose a minimum of a month on tenancy agreements, which is what Barceló is wanting.
We should have an initial idea of what Palma is proposing by the middle of the month, around the time that the period of submissions for the rentals' legislation comes to an end. Greater clarity may then begin to emerge. Or will it?
Friday, January 06, 2017
The Legal Nightmare Of Holiday Rentals
Labels: Balearics, Holiday rentals, Legislation
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