For a property manager to be successful in the vacation rental market, they must stay abreast of new regulations and changes. If you break short term rental regulations, you could receive a hefty fine, which can push your business back by years. Additionally, any negative publicity associated with a fine or warning could radically affect your bookings.
It might seem daunting for some property managers to go and find up to date information about short term rental law. So, to help you, here are some top tips for accessing the information and help keep you legally safe.
Stay Informed About The Short Term Rental Regulations
Vow to stay informed about the short term rental regulations in your properties’ country. The fines can be severe and vary drastically from country to country. Here are some useful websites that you can bookmark to help you in your key markets.
This handy webpage from the French government details the steps you need to take in France to start short-term rentals. You must conduct preliminary checks, make declarations at the town hall, and follow specific tax procedures. If your French is rusty, you can use google translate to translate it to your preferred language.
The Paris City Hall website can guide you on vacation rental properties in Paris. It is important to note that all short term rental properties in Paris need to be declared online. Your property receives a registration number after you have declared it. If you fail to publish the registration number on a digital advert, you can be fined anything from €5,000 to €12,500.
Firstly, go to the local police headquarters and ask for access to the Allogiati Web. The next step is to prepare a written contract for your guests to sign. Finally, you must submit copies of passports or ID cards of your guests on to Allogiati Web.
For properties in Rome, you must register at SUAR online. You will then obtain a CIR code., which you must submit here so tourist numbers can be monitored. Like France, you need to use it on all online advertising, or there is a fine from €500 to €5,000.
Spain is becoming one of the most challenging countries for short-term rentals in Europe. The paperwork involved is lengthy and complicated. It is best to contact your local Spanish Town Hall directly to collect the correct forms. If you fail to register your property, the cost is like Italy, with fines ranging up to €5,000.
Regulations for short term rental law in the UK have become more user-friendly over the last few years. But rules can differ slightly depending on the location. Therefore, it is best to contact the local authority, who can advise on any local laws that are different from the central government.
You also need permission from the following bodies before you start short-term rentals.
- Permission from the freeholder if you own the place.
- You have informed the mortgage lender (if you have one).
- Permission from the insurance company.
- If you are a tenant, you need to get permission from the landlord.
Existing Legal Restrictions – Short Term Rental Law
Short term rental law can be restrictive in nature. But as long as you are familiar with some of the fundamental laws, you can adapt your vacation rental business accordingly. Here are some prohibitions that you need to know.
- In Paris, it is currently illegal to use your primary home as a short-term rental, unless it is occupied for at least eight months of the year and rented less than 120 days.
- As we already mentioned, Spain is by far the most challenging environment for short term rentals. The new law from March 2019, The Ley de Arrendamientos dictates that there must be a unanimous decision to allow or prohibit properties in a community to be holiday lets.
- In Spain, the same law allows a community to raise the community fee for somebody who is using their property for short term holiday rentals.
Limitations Of Short Term Rentals And Planning Permission
As well as prohibitions, you need to adhere to limitations and planning permissions. These can change quickly, so it is best to monitor these regularly. Here are some current areas that can affect your short term rentals in Europe.
- You need to use a Use of Authorisation form to use a second home in Paris as a short term rental. If you do not comply, there is a fine of €50,000 per property.
- In Italy, you can have short term rentals up to 30 days.
- Spain has the most limitations on its short term rentals. They can differ from region to region. For example, Madrid allows up to 90 days, Valencia up to 60 days and Mallorca allows up to 30 days. Additionally, in Mallorca, the local government monitors the number, location and type of property you can rent out.
- In Greater London, following the 2015 Deregulation Act in 2015, you can rent an entire property, up to 90 days, without obtaining a Planning Permit. After 90 days you need to get permission with the permit from the local council. (This includes 90 days in a row or 90 days throughout the year). If you need a permit, it is best to ask weeks in advance as the department can be quite slow. If you do not have a license, you will have to pay a fine up to £20,000.
Find Out What Licenses You Need
As a property manager, you also need to ensure that you have the correct licences for any properties that you manage. The proper permissions prevent your properties from being labelled illegal further down the line.
We recommend that you use this website to contact the correct town hall and find out what licenses you need, as French law can be very complicated.
For Italian licenses, as detailed above, we would recommend that you contact the nearest police station to your property. The police will be able to advise the correct permits required for your area in Italy.
As with France, it is best to contact the local town hall where your property is located.
In the UK, it depends on where your properties are. It is best to contact the appropriate local council. You can use this website and input the postcode of your properties to find the right local council.
Check The Correct Taxation Rules
You should always declare any rental income. Ideally, you should contact a specialist property accountant. They will be able to advise you correctly on the latest short term rental law on taxation.
To give you a head start, here are some useful websites related to taxation.
Here is the website that has all the online tax forms which you can double-check with your accountant.
Since 2017, the law (decree no. 50/2017), also known as the Italian Airbnb Tax states that landlords now have an option to pay a flat 21% tax for short term rentals. This law applies to not only Airbnb properties, but all properties you rent regardless of the website or channel you use to receive the booking. Alternatively, the tax is calculated based on personal income tax and can be from 23% to 43%.
In Spain, it is best to contact the Spanish tax office with any queries. A new government has just come into power, so there is a possibility that the tax rates may change.
Here are few links from the UK government that explain how business rates work for vacation rentals in the UK, a self-assessment helpsheet and a taxation guide on renting a property in the UK.
As a property manager, it is your legal obligation to make sure you follow all short term rental regulations. Failing to do this can result in hefty fines for your business and possibly fewer bookings due to adverse publicity.
At the time of writing, the legal information provided in this article was accurate, but regulations can change often. We therefore recommend that you are proactive and dedicate some time each month, to check for any new changes in short term rental law. Setting a small amount of time to do this could save you a massive headache in the long run. Alternatively, you can subscribe to the newsletter at Your.Rentals and we can provide you with regular industry updates.
If you are using a channel manager for your properties, contact them directly, and they can assist you with any questions. At Your.Rentals we offer friendly and professional Customer Support, ready to answer any of your questions. Please feel free to get in touch, and we will be more than happy to help you!