This guide offers a straightforward explanation of the legal methods available for property owners in Tenerife to rent out their properties.
If Your Property is Residential:
- You can rent it out long-term under urban letting legislation, with a long-term residential contract, regardless of its location.
- Alternatively, you can rent it out short-term in one of two ways:
- As an ‘arrendamiento de temporada’ (a contract of between one day and one year for purposes other than tourism/holiday) under urban letting legislation.
- Or as a ‘vivienda vacacional’, a category in tourism legislation.
‘Vivienda vacacional’ (VV) rentals must be in non-touristic areas. The distinction between touristic and non-touristic areas is defined in the general planning ordinances of local councils (PGOs). Property owners can determine their area’s designation through a simple inquiry to their local council. Another key requirement is that if the property is within a complex, the community statutes must not explicitly prohibit commercial holiday rentals – a common restriction in newer residential complexes.
To rent under the VV system, a property must be located in a purely residential area and, if within a complex, holiday rentals must be explicitly permitted under the community’s statutes. If these conditions are met, the owner must make a ‘declaración de responsable’ before starting any rental activity. This declaration is significant, involving the provision of documentation, making legally-binding statements, and adhering to regulatory conditions.
Additionally, owners renting under the VV scheme must register for IGIC (Canary Islands Indirect General Tax), charge it on all rental invoices, and submit quarterly IGIC returns.
Violations of VV regulations are considered ‘very serious’, with fines ranging from €30,000 to €300,000. Typically, fines for illegal rentals are expected to be around €150,000. Tourism fines can be imposed on both property owners and their agents.
If Your Property is Touristic:
- Owners of touristic properties cannot conduct private holiday rentals since tourism legislation mandates an officially registered on-site sole agent to manage all bookings and rentals. Touristic properties can be rented out short-term in two ways:
- For holidays through an on-site sole agent.
- Privately with a ‘temporada’ contract of between three months and a year.
While ‘temporada’ contracts fall under urban letting legislation and are for rentals of between one day and one year for non-tourism/holiday purposes, any rentals under three months are deemed touristic by Turismo. Therefore, a one day to three-month ‘temporada’ is not feasible for touristic property owners. Fines for infractions in these cases fall into the ‘serious’ category, ranging from €1,500 to €30,000, typically around €18,000.”