Illegal holidays lets - What's the future?

[Muppet]

But Nelson ... an individual can buy an apartment in the Canaries and it can be let out. It's just that you cannot let out an apartment on a residential complex because (in theory) they are designed for people to live in/on and have no facilities to look after the interests of tourists - receptions, life-guards at the pools and so on and so on and there are no standards as to the safety of the complex and the quality of the apartment itself. Of course this is not to say that any/all apartments and complexes fall short of any/all acceptable standards......

You can buy on a complex which is designated for use by short term tourists, is inspected and which (in theory) meets the standards acceptable to the tourist board - it is just that by law you have to let it through the appointed agency which you, as owner, (in theory) can have a say in.

You clearly have an issue with the law, and with a large fine hanging over you I can see why, but the law had been in force for the best part of eight years when you bought your apartments, and by your own admission you knew about it so clearly chose to take the risk. Fundamentally therefore you are stuffed.

Seven and a half MILLION overnight stays in legal accomodation were recorded last month alone in the Canaries, if you compare that to the number of illegal stays you provided in the same period you will get an idea of just how many residential letters would need to come together to even rustle a feather at Canarian Government level, let alone European.

As they might have once said in the Sweeny - "You're nicked mate"

[9PLUS]

Protectionist law is a load of bull nelson it's a simple matter, you should of purchased some where else if you wanted to start a little holiday rental outfit.

You brought the wrong product.

There are plenty of legal complexes you could of purchased on but you desided you wanted a buy on a residental complex and get away with it.

Your opinion would be different had you of done that; the same way it's different now you've been caught.

Maybe it's time you do understand.

Bloody foreigners that can't understand should be taken out into the street and shot in front of their families...

[welshman]

Trouble is though that many apartment owners cannot afford to just stop letting, even for a short period let alone 6 months, because they need the income to pay their mortgages and on top of that still have the fine money to find.

Given the recent financial crisis they cannot even consider re-negotiate with their lenders to reduce payments or extend the term

They will have to sell or get fined our rent to family and friends and if their like my family they want it for nothing? The fines will get bigger I expect more you are detected renting big risk.

[Loaded]

Actually some of the comments are a bit unfair on Nelson. I don't know if what I'm about to reiterate applies to him but it could:

The 1995 letting law dictates that complexes that are touristic must have 50%+1 of the apartments registered or the registration is void and by default the complex is residential until someone gathers 50%+1.

What has happened in some cases is the complex was touristic but the onsite agent has gone and left the individual owners headless and without direction. Some complexes have fragmented so much that despite over 50% still renting they haven't pulled together and made it legal - leaving themselves open to fines when they don't need to be.

This is a ridiculous situation to be in, particularly when Many owners were mis sold property on residential complexes where they can never be legal, why can't the owners on complexes who have become "dormant-touristic complexes" pull together and make something work for themselves instead of just moaning?

[TenerifePool]

Actually some of the comments are a bit unfair on Nelson. I don't know if what I'm about to reiterate applies to him but it could:

The 1995 letting law dictates that complexes that are touristic must have 50%+1 of the apartments registered or the registration is void and by default the complex is residential until someone gathers 50%+1.

What has happened in some cases is the complex was touristic but the onsite agent has gone and left the individual owners headless and without direction. Some complexes have fragmented so much that despite over 50% still renting they haven't pulled together and made it legal - leaving themselves open to fines when they don't need to be.

This is a ridiculous situation to be in, particularly when Many owners were mis sold property on residential complexes where they can never be legal, why can't the owners on complexes who have become "dormant-touristic complexes" pull together and make something work for themselves instead of just moaning?

Because the agent will need paying!

[Ben_f]

Seven and a half MILLION overnight stays in legal accomodation were recorded last month alone in the Canaries, if you compare that to the number of illegal stays you provided in the same period you will get an idea of just how many residential letters would need to come together to even rustle a feather at Canarian Government level, let alone European.


I don't know the proportion of illegal to legal stays (statistics for illegal things are hard to come by). I suggest it's higher than you think. After all, if the illegal ones were insignificant, you wouldn't get the hotel lobby persuading the government to make such a law in the first place. I'm sure it's a point that's been made over and over again so, sorry for repeating.

[Loaded]

Because the agent will need paying!

Amen! The bottom line is discovered!

[fonica]

Trouble is though that many apartment owners cannot afford to just stop letting, even for a short period let alone 6 months, because they need the income to pay their mortgages and on top of that still have the fine money to find.

Given the recent financial crisis they cannot even consider re-negotiate with their lenders to reduce payments or extend the term


They will have to sell or get fined our rent to family and friends and if their like my family they want it for nothing? The fines will get bigger I expect more you are detected renting big risk.

I need 5,000€ to pay my debts otherwise the bank will forclose on my property so I'm going to;rob a bank, mug a tourist,illegally rent out my apartment???? There isn't a law that says you can do something unlawful if you need money to pay you mortgage .There are many good reasons posted on here why you can't let on a residential complex and this law will not change. No different to people who buy on tourist complexes and then complain about noise.

[Loaded]

12x550 euros =6600 euros from long lets

[Peterrayner]

12x550 euros =6600 euros from long lets

Less
Income Tax
Community Fees
Electricity
Water
Basura
IBI

[princessmonika]

that is about 250 to 300 per month aprox. depending on the complex -- for my 2 bed ,about that, living there 8 month per year--

[Loaded]

But those costs are there regardless

[princessmonika]

yes but if you only get 500 per month, not a great return-- i do not rent out- but just interested what is going on

[Loaded]

And im sure it's more than your friends and family are contributing Peter

[Peterrayner]

But those costs are there regardless

of course ..so they cant be ignored :wink:

Added after 7 minutes:


And im sure it's more than your friends and family are contributing Peter

:nono::nono:

I have a long term contract 500e per month all inclusive for the one bed apartment fully legal which covers the community fees and costs including income tax just about on both apartments

and I dont charge anyone for staying in my other apartment nor is it openly offered to the public at large.

[Angusjim]

It would appear that the returns from renting long term or holiday lets on a touristic complex via an agent in Tenerife both have a crap returns, better off buying and renting out in the UK plus added benefit of helping UK economy. My feelings now are keep your money in the UK don't buy in Tenerife. Although I relize this does not help the thousands of people stuck with what are basically unsellable properties unless you practically give it away

[Peterrayner]

Although I relize this does not help the thousands of people stuck with what are basically unsellable properties unless you practically give it away

Yes but there are more buyers than just from the UK and it depends what your buying for. Not everyone is looking for a huge return but rather a life style perhaps.

[Muppet]

Yeah but yeah but yeah but.....

The outlay, the returns from that outlay, the location, the legality etc etc are all part of the initial decision making process.... anyone now in a "situation" are there because of having been given bad advice or having chosen to ignore the advice and the rules and really only have themselves to blame for having taken a gamble and sadly lost.

A significant number of long-lets these days are not inclusive of bills or at least have them limited to a figure and I can see that trend growing. In the UK as an example, if you rent a flat or house community charges (Council Tax) electricity and so on are not normally included as part of the deal and the tenant has to see to these him/her self.

[Angusjim]

Yes but there are more buyers than just from the UK

Thats correct Peter and I would advise them to do the same in their own country if possible, they can then use the profit made to go to holiday destinations of their choice. For me its not what is happening now its the fact that the Canarian government has knowingly allowed the situation to go since 1995 and have happliy taken all the monies from property sales etc it is in my opinion a form of fraud

[Muppet]

With respect AJ, the most significant fraud has been those who have been renting properties here for some time via the internet and dealing in cash on arrival (often in Sterling) and pocketing the money.

[Peterrayner]

Thats correct Peter and I would advise them to do the same in their own country

Thankfully the reality is many are not inclined to take that advice.

The last 3 recent purchases on our complex have all been nationalities other than UK admittedly at what they percieve as bargain prices but is because of the exchange rate situation is allowing the UK owners to retieve their initial investments.

[Angusjim]

With respect AJ, the most significant fraud has been those who have been renting properties here for some time via the internet and dealing in cash on arrival (often in Sterling) and pocketing the money.

I do not condone the above but why has it taken since 1995 for this to be enforced they knew exactly what was happening as did the estate agents, solicitors, accountants etc in Tenerife. But the worst cuprit has to be the government who new exactly what was happening but kept taking and taking and probably still would be if the credit crunch had not come along. Do you condone government fraud ?

[Peterrayner]

Yeah but yeah but yeah but.....

The outlay, the returns from that outlay, the location, the legality etc etc are all part of the initial decision making process.... anyone now in a "situation" are there because of having been given bad advice or having chosen to ignore the advice and the rules and really only have themselves to blame for having taken a gamble and sadly lost.

A significant number of long-lets these days are not inclusive of bills or at least have them limited to a figure and I can see that trend growing. In the UK as an example, if you rent a flat or house community charges (Council Tax) electricity and so on are not normally included as part of the deal and the tenant has to see to these him/her self.

It seems to me the situation is like all investments they can go up or down usually on a cyclical basis and the gains or losses are judge by when you decide to sell.

My own experience on long lets currently is that all inclusive is becoming the norm at the moment.

[Loaded]

I don't think you can take bookings from holiday makers and say its just to cover costs when the costs are the cost of actually buying the property in the first place (mortgage)!

If that were the case then anyone with a mortgage could rent freely so long as they only broke even or made a loss.

Meanwhile someone with money can't let because they've already bought their property outright and don't have the "expense" of a mortgage....

Yeah that makes sense!

[Muppet]

Thats not what I was saying. Yes the government may well have been pocketing the normal taxes and fees required when properties change hands and have been doing so for far longer than the 15 years or so this particular law has been in place.

But these fees and charges have nothing to do with the intended use of a transacted property and the intended use by the new owner is not part of that particular transaction and in any event apartments don't exactly change hands every week nor every month - perhaps maybe once or twice during the period in question.

In other words, whilst the Government have benefitted from the sale and purchase of property that is quite different than the owners using their purchases to (often) line their own pockets weekly or fortnightly.

[Peterrayner]

Thats not what I was saying. ..........................In other words, whilst the Government have benefitted from the sale and purchase of property that is quite different than the owners using their purchases to (often) line their own pockets weekly or fortnightly.

An extreme view IMHO which might be true of some owners who own 3 or 4 apartments holiday letting on a true commercial basis but its a bit harsh on single owners.

[Angusjim]

I don't think you can take bookings from holiday makers and say its just to cover costs when the costs are the cost of actually buying the property in the first place (mortgage)!

If that were the case then anyone with a mortgage could rent freely so long as they only broke even or made a loss.

Meanwhile someone with money can't let because they've already bought their property outright and don't have the "expense" of a mortgage....

Yeah that makes sense!

I think most people now accept that what has been happening is not correct and yes people should have been paying their taxes ( many probably were) on the profits, but why did the government turn a blind eye to the breaking of the law for 16 years is it acceptable for a government to be taking tax from "illegal letting". I seem to remember that they take a small % tax on any perceived letting from anyone who owns a property whether they rent out or not but I may be wrong maybe Peter could confirm this

[Peterrayner]

I think most people now accept that what has been happening is not correct and yes people should have been paying their taxes ( many probably were) on the profits, but why did the government turn a blind eye to the breaking of the law for 16 years is it acceptable for a government to be taking tax from "illegal letting". I seem to remember that they take a small % tax on any perceived letting from anyone who owns a property whether they rent out or not but I may be wrong maybe Peter could confirm this

Yes thats correct an income tax on "assumed" income......even though its illegal to let ??? I pay about 200e a year on the 2 bed apartment.

[Angusjim]

Added after 7 minutes:


Thats not what I was saying. Yes the government may well have been pocketing the normal taxes and fees required when properties change hands and have been doing so for far longer than the 15 years or so this particular law has been in place.

But these fees and charges have nothing to do with the intended use of a transacted property and the intended use by the new owner is not part of that particular transaction and in any event apartments don't exactly change hands every week nor every month - perhaps maybe once or twice during the period in question.

In other words, whilst the Government have benefitted from the sale and purchase of property that is quite different than the owners using their purchases to (often) line their own pockets weekly or fortnightly.

I think they have collected millions & millions of euros during this period and I am sorry but I take government led fraud a lot more serious than you seem to. Yes they probably lost millions from owners non payment of tax so whats new in a country where the local population seem to think tax is optional and where your accountant asks to be paid in cash to "save on tax" for puting in your tax return

Added after 2 minutes:


Yes thats correct an income tax on "assumed" income......even though its illegal to let ??? I pay about 200e a year on the 2 bed apartment.

Can someone explain the logic behind this ? Surely this now should be repaid to everyone !!

[Loaded]

But the tax revenue does not differenciate between long letting and short term letting. It is just "letting tax".

[Angusjim]

But the tax revenue does not differenciate between long letting and short term letting. It is just "letting tax".

And if you don't let out ??

[Peterrayner]

But the tax revenue does not differenciate between long letting and short term letting. It is just "letting tax".



On the long let apartment I pay tax on the income declared every quarter but dont pay the annual assumed letting tax.

On the non let apartment I have to pay this assumed letting tax annually based on the number of unlet days

[Loaded]

And if you don't let out ??

You can pay non letting tax which is a yearly tax based on the catastral value of your property

[Peterrayner]

You can pay non letting tax which is a yearly tax based on the catastral value of your property

Yes thats a better way of describing it

Its a tax on non letting rather than a tax on assumed lettings. :)

[macdonald5]

:o
I'm with Murph on this one. In general, tourist complexes don't offer the same level of mod cons as private.

We have holidayed in Tenerife for over 30 years and tried various types of accommodation and MUCH prefer private in fact would not holiday in Tenerife if forced to go tourist even if 5 star hotels
We enjoy great standard of self catering with washing machine,good fridge,excellent standard all round with choice of where we want to eat not forced to the same dining room nightly
Tenerife depends on tourism more than ever due to worldwide cash crisis so perhaps should do everything to attract and keep regulars rather than force them to other counties

[sunspot]

:o

We have holidayed in Tenerife for over 30 years and tried various types of accommodation and MUCH prefer private in fact would not holiday in Tenerife if forced to go tourist even if 5 star hotels
We enjoy great standard of self catering with washing machine,good fridge,excellent standard all round with choice of where we want to eat not forced to the same dining room nightly
Tenerife depends on tourism more than ever due to worldwide cash crisis so perhaps should do everything to attract and keep regulars rather than force them to other counties

I agree completely,like thousands of others and i can see a big decline if this is whats forced on alot of tourist in the future

[Loaded]

Groundhog day!!!!!!!!!!!!

[fixer]

:o

We have holidayed in Tenerife for over 30 years and tried various types of accommodation and MUCH prefer private in fact would not holiday in Tenerife if forced to go tourist even if 5 star hotels
We enjoy great standard of self catering with washing machine,good fridge,excellent standard all round with choice of where we want to eat not forced to the same dining room nightly
Tenerife depends on tourism more than ever due to worldwide cash crisis so perhaps should do everything to attract and keep regulars rather than force them to other counties
Do you mean you you wont go in a tourist complex because to make it clear in the future you can still book a private apartment in a tourist complex direct from the owner thand they alow it. Just to balance it out of course the apartments used by the hotel chains can be basic for the future they should be looking at there standards that the offer dont just complain about the competion they need to raise there game or people may go elswhere. David

Added after 4 minutes:


Groundhog day!!!!!!!!!!!!
Yes lets go around again and by the way you cant possabily have nice apartments with washing machines ect on Pamola Beach its a tourist complex after all ! David:duh:

[polremy]

Would just like to say that, when our son and his family come over to see us here, they always stay in Santa Barbara (Golf del Sur) . Their apartment has always been spacious and well equipped and they have been known to pay less than £35 a night (admittedly probably more now that they need a two bedroomed place).
Not the same as a quiet residential apartment I know but perfectly legal.

[churnlobster]

.
Not the same as a quiet residential apartment I know but perfectly legal.

Not all residential complexes are quite, their usually full of tourists....rolleyes2:

[Peterrayner]

Groundhog day!!!!!!!!!!!!

The customer is always right :)

Added after 3 minutes:


Not all residential complexes are quite, their usually full of tourists....rolleyes2:


Not all residential complexes are quite, they are usually full of owners out on holiday. :rolleyes:

[churnlobster]

Not all residential complexes are quite, they are usually full of owners out on holiday. :rolleyes:

That's what i meant, whether they are owners or not if they don't live there full time then they are holiday makers.
The term residential to me means you are resident here.
Other than that you are a holiday maker whether you come here once a year or six times a year,
I am an owner on a residential complex and live here full time and don't have a property in the UK. :tiphat:

[Peterrayner]

That's what i meant, whether they are owners or not if they don't live there full time then they are holiday makers.
The term residential to me means you are resident here.
Other than that you are a holiday maker whether you come here once a year or six times a year,
I am an owner on a residential complex and live here full time and don't have a property in the UK. :tiphat:

Which for me means the term residential complex is a complete misnomer. They are and always will be full of holidaymakers regardless.

[fixer]

Which for me means the term residential complex is a complete misnomer. They are and always will be full of holidaymakers regardless.
And a lot more holidaymakers who want to come and stay to avoid holidaymakers in touristic complexes:duh:

[9PLUS]

Have you noticed the last couple of newbees say exactly the same thing?

[Loaded]

9plus are you suggesting that the last few newbies are infact oldies trying to propagate a certain point of view???? Lol

[AL JAY]

I don't know how Parque Santiago 1 and 2 can be classed as residential.they are in a prime frontline location,have nice quiet well kept pool area's and pool bars and are well run and you can hear a pin drop at night,and i would guess they have had more holiday lettings since 1984 than any other complex in PDLA. I fully realise why other complexes want them stopped :wink2:

[Loaded]

Parque 1 and 2 seem to have had their licenses lay dormant. I think they'll be one of those whose sole agent has disappeared and left the complex without a head

[AL JAY]

Parque 1 and 2 seem to have had their licenses lay dormant. I think they'll be one of those whose sole agent has disappeared and left the complex without a head

I think they will still be full for Christmas and New Year with *coughs ahem* Friends & Family!!!

[sunspot]

I think they will still be full for Christmas and New Year with *coughs ahem* Friends & Family!!!

Without a doubt AJ....................

[AJP]

Loaded can i ask a question,I,m not being pedantic or sarcastic,but i think it will be become relevant depending on the answer.If I owned an apartment on Paloma beach,but wasn,t one of those who was registered through you to let it out,if I wanted to let my sister stay there,would I need your permission?

[Loaded]

Does she have a boyfriend?

[jogger321]

Without a doubt AJ....................

Yes but if you see a number of people that look like holiday makers by the pool but wearing peaked caps and carrying huge magnifying glasses, i'd be careful :) ..All may not be as it appears!!!!!!!!

[AJP]

Does she have a boyfriend?To be honest I haven,t got a sister,:cheeky:but just to keep the debate going would i have to ask the sole letting agent for permission if I did want to let to a family member

[Loaded]

Ha ha sorry couldn't resist.

If you're not registered with us or if your not registered with any sole letting agent anywhere, i can't see what good it can do to tell me or them that a family member is staying.

There are many apartments on Paloma beach that we do not manage or hold keys for and the owners close family use the apartment at their own discretion without us or them having any problem.

What can and does happen is that some owners say only their friends and family use the apartment and then I spot my own customers staying there at a lower rate - this is obviously something I try and stop.....

[AJP]

Thanks for that reply,i think, after nearly a year now from when the first post about the inspectors coming out,that everyone has their own opinion or position on the events that are happening.As to the effect these events are having or will have,also depends on what side of the coin you support.For me the most obvious effect on the renting sector is one of confusion and ambiguity,at a time when Tenerife needs all the people it can get.When even big travel companies are struggling, Thomas Cook for instance, independant travel is now more prevellant than ever,so taking a look at the holiday lettings website(as loaded said on the other thread) you see that Tenerife as a whole has 823 holiday lets,los Cristianos148,some people might be pleased that there is less than there was,but take a look at the competition,take for example the costa blancan region of alicante1990 rentals available alone in that region.Tenerife has many people who have stayed in the same accomodation for years,spending lots of money in the process.If those rentals are taken away from them,through owners being frightened to rent out, then there are other places around the world waiting for them

[Topacciolo]

I read the and scroll down many pages of this thread but i can´t find my answer so pls do not be disappointed if someone already mention this.
For an agency that does long term rental, is it possible to apply for a short term lettings licence? it´s only a question of having apartment on touristic complexes or do you need a special licence to work with tourists as well as long term rentals?
thanks
T

[nelson]

try asking again on the main illegal lettings thread. You sound very much to be in the dark about the letting to tourist issue in the canaries. As far as I understand it only a sole agent can let to tourists in tenerife on a complex. The complex has to be classed as touristic. The sole agent has to have 50 plus 1 % of apartments in his control to be able to do this.

If you are not the sole agent on a complex you can not legally do any letting to tourists at all.

[universal]

I have a friend who does long lets (normally 11 months) legally and they have received a fine of €150,000.00
because on their website they state that they can arrange shorter lets, i.e. 3-4 or 5 months for "swallows".
They have never let on a short term basis.

[Peterrayner]

If thats the case this contradicts current legal advice based on lawyers discussions with the Tourismo that they would accept a minimum 3 month let as a long term let providing there was a legal Vivienda Rental Contract in place ?????

Are you sure the fine is for the actual lettings. I am aware that some large fines have been issued to agents because they dont have the necessary licences to advertise commercially at all.

[universal]

Yes - They have the necessary permissions for long lets.
No evidence was presented to substantiate the claim of holiday lets having occurred.