Canary Islands Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in the Canary Islands, Spain?

The Canary Islands, a popular tourist destination off the coast of northwest Africa, are drafting strict new rules to regulate short-term holiday rentals via platforms like Airbnb and Vrbo. The proposed law aims to curb the explosive growth of vacation rentals in recent years, which has led to complaints from locals being priced out of the housing market.

Starting a Short-Term Rental Business in Canary Islands

While it's currently legal to rent out properties short-term in the Canary Islands, the regional government is looking to significantly tighten regulations. Key provisions in the draft bill include:

• New-build properties will be barred from being used as short-term rentals
• Existing properties being used as vacation rentals will have 5 years to comply with new requirements, including getting authorization from neighbors
• The start of short-term rental activity will require presenting a responsible declaration, technical report, and urban planning certificate
• Homes subject to any public welfare housing program cannot be used for tourism

Enforcement will also be drastically stepped up. The plan is to empower the police to act when fraudulent behavior is detected, with up to 1,300 officers, including all local police forces, enlisted to help the islands' 35 inspectors enforce the new rules.

Short-Term Rental Licensing Requirement in Canary Islands

To legally rent out your property to tourists in the Canary Islands, you must obtain a Vivienda Vacacional (VV) license number from the relevant authorities. This involves submitting a sworn declaration that you possess all the required documents for the application.

The process typically includes:

1. Obtaining a digital certificate (Clave Digital) to communicate with government services
2. Registering with the Canary Islands tax authorities and paying IGIC (Canary Islands general indirect tax) on your rental income, with some exceptions
3. Registering with the police/Guardia Civil to report guest check-ins
4. Completing and submitting the "Declaración Responsable" affirming you meet all rental standards

You'll also need to provide:

1. Licencia de primera ocupación/cédula de habitabilidad (first occupancy license/certificate of habitability) issued when the property was built
2. Informe urbanistico (urban report) from the municipality confirming your property's location complies with zoning

Failure to obtain the VV license and meet these requirements can result in fines upon inspection. The basic licensing process typically costs around €450 plus IGIC, and can be completed within a month by a professional service, allowing you to start renting quickly.

It's important to note that if your property is in a complex, you must verify that short-term rentals are permitted by the community rules. Owners of properties that received a rental license before 2017 will need to reapply under the new regulations.

The income from renting to tourists is subject to taxation in Spain, usually at a rate of 19% for EU citizens and 24% for non-EU nationals on net rental income. Owners must also always report their guests' details to the police upon check-in.

While the licensing process involves some administrative steps and costs, it's a necessary requirement to operate legally and avoid penalties. The regulations aim to ensure a minimum standard of safety and quality for guests and to prevent fraudulent online listings.

Required Documents for Canary Islands Short-Term Rentals

To legally launch and operate a short-term rental property in the Canary Islands, owners must submit a sworn declaration of responsibility along with several key documents. These include:

1. Passport and NIE copies: Provide a copy of the passports and NIE certificates (foreigner identification number) for all registered owners listed on the property title deed (escritura).
2. First Occupancy License (Licencia de Primera Ocupación) or Habitation Certificate (Certificado de Habitabilidad): This document certifies the property is suitable for habitation. Some owners may already have this, while others will need to apply for it, potentially with the help of a technical architect.
3. Property title deed (Escritura): Submit a copy of the official property ownership document.
4. Floorplan: A floorplan of the rental property may be required.
5. Last annual property tax receipt (IBI - Impuesto sobre Bienes Inmuebles): Provide proof of payment for the most recent year.
6. Municipal certificate (Certificado Municipal): Obtained from the local town hall, this confirms the property's location complies with zoning for short-term rentals.
7. Land registry certificate (Nota Simple): This document from the property registry summarizes the property's legal information.
8. Authorization letter: The property owner must provide written authorization for a representative to apply for the tourist rental license on their behalf, if applicable.

Gathering this paperwork is just the first step in the licensing process. If the initial property assessment is favorable, owners can then officially apply for the Vivienda Vacacional tourist rental license.

Fees for the various certificates and the license itself can add up. For example, the municipal certificate costs around €35, while the nota simple is €10. Habitation certificate costs vary depending on the property.

Using an agency or property manager to handle the tourist rental licensing process is common. Their services, which include collecting required documents, applying for the license, and registering the owner with the tax authorities, typically cost €400-500 plus taxes.

It's critical for owners to complete the tourist rental registration process before listing their property online, as the fines for operating illegally are severe, often exceeding €30,000. With the proper paperwork and permits in place, owners can confidently welcome guests while contributing to the regulated growth of the Canary Islands' vacation rental market.

Spain Wide Short-Term Rental Rules

In addition to the specific regulations in the Canary Islands, there are also some nationwide rules in Spain that apply to short-term rentals:

Tourist accommodations must be registered with the appropriate regional tourism authority. The exact process varies by autonomous community, but generally requires submitting a declaration of responsibility affirming the property meets all standards.

Hosts are required to provide certain information to guests, including the property's official registration number, a 24/7 contact number, instructions for appliances, and details on garbage collection and house rules.

Income from short-term rentals is subject to taxation. For non-resident EU citizens, rental income tax is a flat 19% of net income after deducting expenses. Non-EU citizens pay a 24% tax rate on gross rental income with no deductions.

Short-term rental operators must also pay quarterly VAT (IVA in Spanish) of 10% on rental income in most regions. Some areas, like the Canary Islands, have their own indirect tax instead of IVA.

As of 2023, a new national law requires all short-term rental hosts to register themselves and their properties with the Ministry of Interior. For each booking, specific guest data must be reported to authorities in a manner similar to the requirements for hotels.

While implementation and enforcement of the national registration system is still evolving, it marks an important step towards harmonizing short-term rental oversight across Spain's autonomous communities. Fines for non-compliance can range from €100 for minor infractions up to €30,000 for operating without proper registration.

The push for clearer and more consistent nationwide short-term rental standards reflects Spain's efforts to balance the economic benefits of tourism with the need to protect local housing markets and quality of life. However, the complex web of national, regional, and municipal regulations remains challenging for hosts to navigate.

Does Canary Islands Strictly Enforce STR Rules?

Based on discussions in real estate investing forums like BiggerPockets and Reddit, it appears that the Canary Islands are becoming increasingly strict about enforcing short-term rental regulations, especially compared to other popular Airbnb destinations.

There is a growing sentiment of "hostility" towards digital nomads and short-term rental operators in places like Las Palmas de Gran Canaria. Locals express frustration at rising costs of living and housing shortages, which they attribute to the influx of remote workers and tourists staying in illegal vacation rentals.

While in the past, many hosts operated STRs in the Canary Islands despite the rules, often viewing the regulations as "suggestions" that were difficult to enforce, this is changing rapidly. The regional government is proposing a new law to crack down on unlicensed rentals, with plans to enlist up to 1,300 police officers to help the islands' inspectors shut down illegal listings.

Under the draft bill, using a home for short-term tourist lodging without a license could lead to fines exceeding €30,000. Hosts will need to submit a sworn declaration and technical reports to register their properties, and many homes, such as those in residential apartment complexes, will no longer be eligible for tourist rental at all.

So, in summary, while the Canary Islands used to be somewhat Airbnb-friendly with lax enforcement, this is no longer the case. The islands are proposing some of the strictest STR laws in Europe, and unlike in the past, unlicensed hosts continuing to operate illegally are facing huge financial penalties.

The general consensus among real estate investors online is that the Canary Islands are cracking down hard on STRs, and the days of openly flouting the rules with little consequence are coming to an end. Obtaining and maintaining a tourist rental license is becoming increasingly complex and cost-prohibitive for most casual hosts.

How to Start a Short-Term Rental Business in Canary Islands

If you're looking to start a short-term rental business in the Canary Islands, here are the key steps to follow:

1. Research local regulations: Familiarize yourself with the specific rules and requirements for operating a vacation rental in the Canary Islands. This includes obtaining the necessary licenses, permits, and registrations. Pay close attention to zoning laws, occupancy limits, and safety standards.
2. Choose a suitable property: Select a property that meets the legal requirements for short-term rentals in the Canary Islands. Ensure it is located in an area zoned for vacation rentals and has the necessary amenities and features to attract guests.
3. Obtain a First Occupancy License or Habitation Certificate: You will need to provide either a First Occupancy License (Licencia de Primera Ocupación) or a Habitation Certificate (Certificado de Habitabilidad) for your property. These documents certify that the property is suitable for habitation.
4. Get a Municipal Certificate: Obtain a Municipal Certificate (Certificado Municipal) from your local town hall confirming that your property's location complies with zoning regulations for short-term rentals.
5. Register with the police: Register with the local police or Guardia Civil, as you are required to report guest check-ins and provide traveler information.
6. Apply for a Tourist Rental License: Submit a Declaración Responsable (Responsible Declaration) to the Canary Islands government or relevant island's Cabildo, affirming that you have all the necessary documents and meet the requirements for a Tourist Rental License (Vivienda Vacacional).
7. Register with tax authorities: Register with the Canary Islands tax authorities, as you will need to pay IGIC (Canary Islands General Indirect Tax) on your rental income, which is currently set at 7%.
8. Equip and furnish your property: Ensure your property is adequately equipped and furnished to meet the standards for vacation rentals, including proper bedding, kitchen equipment, and safety features like a first-aid kit.
9. Set up a direct booking website: Create a professional website to showcase your property, provide information for guests, and allow for direct bookings. This can help you save on commissions charged by online travel agencies.
10. List your property on vacation rental platforms:Register your property on popular short-term rental platforms like Airbnb and Vrbo to reach a wider audience and attract bookings.
11. Arrange for property management: Decide whether you will manage the property yourself or hire a professional property management company to handle tasks like cleaning, maintenance, and guest communication.
12. Comply with ongoing requirements: Regularly review and comply with all legal obligations, such as submitting quarterly IGIC returns, reporting guest information to authorities, and renewing your Tourist Rental License as required.

By following these steps and staying informed about the latest regulations, you can successfully launch and operate a short-term rental business in the Canary Islands. It's advisable to seek guidance from local professionals, such as lawyers and tax advisors, to ensure full compliance with all legal and fiscal requirements.

Who to Contact in Canary Islands about Short-Term Rental Regulations and Zoning?

If you have questions or need guidance regarding short-term rental regulations and zoning in the Canary Islands, there are several key government offices and associations you can contact:

1. Canary Islands Tourism Office (Patronato de Turismo de Canarias):

Phone: +34 928 899 400 (Gran Canaria)
Phone: +34 922 924 041 (Tenerife)
Email: info@turismodecanarias.com
Website: www.holaislascanarias.com

2. Vice Ministry of Tourism (Viceconsejería de Turismo):

Phone: +34 922 475 394
Email: viceconsejeriat.ctt@gobiernodecanarias.org
Website: www.gobiernodecanarias.org/turismo/

3. Canary Islands Government - Department of Tourism, Industry and Commerce:

Phone: +34 922 924 330
Email: dgtc.ctt@gobiernodecanarias.org
Website: www.gobiernodecanarias.org/turismo/

4. ASCAV (Canarian Association of Holiday Home Owners):

Phone: +34 928 354 991
Email: info@ascav.es
Website: www.ascav.es

5. FEVITUR (Spanish Federation of Holiday Home Associations):

Phone: +34 965 856 364
Email: info@fevitur.com
Website: www.fevitur.com

For specific zoning and urban planning questions, it's best to contact the local town hall (ayuntamiento) or city council (cabildo) where your property is located. They can provide detailed information on land use classifications, permitted activities, and any local regulations that may apply.

Remember, regulations can vary between islands and even between municipalities, so it's crucial to check with the relevant local authorities for the most accurate and up-to-date information. These contacts can guide you through the process of obtaining the necessary licenses and permits, ensuring your short-term rental complies with all applicable laws and zoning requirements in the Canary Islands.

What Do Airbnb Hosts in Canary Islands on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Airbnb hosts in the Canary Islands on Reddit and Bigger Pockets, there are mixed feelings about the proposed strict new regulations on short-term rentals:

Some hosts on Reddit express frustration with the increasingly "hostile" environment towards vacation rentals and digital nomads. They feel the government is unfairly blaming them for issues like rising rents and housing shortages. However, most seem to acknowledge that some level of regulation is needed to balance tourism with local needs.

In a thread on the Tenerife subreddit, an Airbnb host shares their experience with a guest who tried to "scam" them using a bait-and-switch tactic to get a cheaper booking. Commenters note that while this behavior from guests is unfortunate, the bigger issue is the lack of support from Airbnb for hosts in disputes. Some worry the proposed laws will make it even harder to operate.

On Bigger Pockets, an investor looking to buy short-term rental properties in Gran Canaria expresses concern about the impact of the new regulations. Experienced hosts advise doing thorough due diligence on zoning, licensing requirements, and whether the specific property would be eligible for tourist rental under the rules.

Another Bigger Pockets thread discusses the general future of Airbnb investing in 2023 and beyond. Several hosts opine that increased regulation of short-term rentals is inevitable in many markets as local governments respond to constituent concerns. They recommend hosts be proactive in adapting their business models.

In the Airbnb Community Center, a host with properties in Gran Canaria provides an update on the draft law and advises fellow hosts to make their voices heard during the public consultation period. While he is worried about the impact on his business, he seems resigned that change is coming and hosts will need to adapt.

Overall, there is definitely apprehension among Airbnb hosts in the Canary Islands about the proposed regulations and what it will mean for their businesses. At the same time, many seem to begrudgingly accept that the current situation is not sustainable and some recalibration is needed. The focus appears to be on how to pivot and operate successfully within a new regulatory framework.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.