Spain vs the sharing economy

There have been tough times over the last almost 10 years, and a lot of people have turned to the sharing economy to help make ends meet.

For owners of Galician property this has typically meant renting out a complete house, some small annex or guest house on the property, or even just a room or two. And more often than not on AirBNB or HomeAway.

Unfortunately continuing to do this in Galicia will become a very risky business after 1st May this year.

Unlicensed tourist (ie. short let) accommodation has been the target of various powerful lobbying groups from Spain’s hotel industry for many years, and in 2013 a Spanish law was enacted requiring all tourist accommodation to be licensed.
The actual implementation of this law has been down to autonomous communities, and the Xunta de Galicia introduced this law earlier this year with it taking effect from 1st May 2017.

As with anything in Spain, getting a license involves not just a time consuming circuit of various parts of the bureaucracy, but also complying with a raft of rules and standards. Even a quick look at these requirements is enough to show that a large proportion of the properties/rooms currently offered on AirBNB won’t and can’t comply …which, let’s face it, was probably the intention of the law from the word go.

There are strong arguments in favour of this law. Spain is trying to take its tourist industry upmarket and so enforced standards are important. Also, though, small and medium sized businesses offering tourist accommodation and complying with all the requirements have been at a massive disadvantage in recent years due to direct competition from AirBNB properties which have none of the same costs.

Anyway, onto practicalities.

If you’re currently renting out a property for short term lets (I think the criteria is less than 30 days) then after 1st May you need a licence to do this legally. If you don’t have a licence you can expect significant problems and a large fine if caught.

To get a licence you need to comply with requirements as described (in English) on this page:
…and if your property doesn’t comply you can’t rent it legally.

If you do rent a property illegally then you can expect that (based on what has been happening in other autonomous communities where this law is already in force) the authorities will be using three sites to track down offenders:

  • AirBNB
  • HomeAway
  • Google maps/places

…and so if you list your property on any of those you run a high risk of being caught.

And as well as targeting the proprietors of unlicensed properties the authorities will also be able to fine websites (such as AirBNB and HomeAway) that advertise unlicensed properties. So anyone renting a property using a major provider of web advertising can expect to be asked to sign a statement confirming that their property complies with local laws and providing a licence number; whatever their lawyers deem sufficient to transfer all liability for non-compliance to homeowners/people listing properties.
This article (in Spanish) provides some more information:

Whilst this will be a dark cloud for many there is also a silver lining for a few. Namely anyone who already owns or can invest enough to provide licensed tourist accommodation.

Figures in the article above state that at the moment there are around 6,000 licensed holiday homes or apartments and some 30,000 unlicensed in Galicia. The conclusion from this and the difficulty in complying with the new requirements is that the supply of available houses and apartments for rent is going to be cut by at least 50%.
Demand, meanwhile, is steadily increasing as global economies gradually recover and with tourism in Galicia also on the rise.

Such a huge shift in the supply-demand balance will inevitably mean that owners of licensed tourist accommodation will see greater demand for more of the year and at higher prices.

If you’re interested in finding a property that is already licensed for tourist accommodation or you would like to find and restore a property for this purpose then get in touch via our property search service page and we can help.