Ibiza property clampdown

While Ibiza's clubbing tourists have been worrying about the impact of the enforced daytime closure of discos and music bars, many of the island's villa and apartment owners have been getting worked up about a more serious threat to their well-being. The authorities have promised a major clampdown on unlicensed property rentals.

On the face of it property owners really don't have anything to complain about. There are plenty of people who make a nice untaxed income from renting out their villas and apartments in Ibiza for the summer season. They may live in the UK or Germany and have a holiday home in Ibiza or they may be full-time island residents who go away for July and August, using the rent to pay for a holiday or just to cover the mortgage for the rest of the year.

It's not simply that owners don't pay tax on the properties, there are also no safety checks. Without being overly protective there are all sorts of risks from things such as faulty heaters. We don't want a repeat of the tragedy where two kids were killed by fumes in Corfu.

There is some evidence of the size of the unlicensed property market in Ibiza. Each year the number of passengers arriving on the island by air and sea increases. At the same time occupancy in Ibiza's hotels keeps falling. I know that there is a belief that the consumption of drugs allows some of these tourists to spend all their time in clubs and bars without the need for a bed. But, I honestly don't believe there are that many.

The response by the authorities to the disparity is to employ more inspectors to trawl through websites and other places where villas and apartments are advertised for rent looking for people who aren't licensed. Anybody who is caught faces potentially massive fines based on the amount of rent they might have received over several years. So could be talking about penalties amounting to tens of thousands of euros. No wonder owners are nervous.

So are owners lining up to legalise their position? Not really. Getting a licence for anything in Spain is complicated, even if you speak the language fluently. There's a tradition of waiting until you get caught before you try and get the paperwork. For instance, few people seem to get their car taxed until they have to sell it when proof of payment is needed to legalise the transfer. Building work goes ahead without permission in the hope that either nobody notices you've built a swimming pool or the fine won't be too big.

Of course, if you do go along and try and get your rental property licensed and fail, what you're doing is advertising its illegality to the authorities. You definitely can't plead ignorance afterwards. But actually I believe most people would rather be legal even if it reduces their income a little. It's better than the risk of being dragged through the courts.

Conspiracy theorists believe that the government doesn't really want villa and apartment landlords to get licences. They say this is because hotel owners want to eliminate the competition. It's easy to understand why hoteliers are fed up at the moment as they watch what they see as unfair competition from people who don't pay taxes or licence fees.

Where the logic goes awry is in the assumption that holidaymakers who can't rent a villa in Ibiza will stay in one of the island's hotels instead. Many will simply find a villa somewhere else. That's the sort of holiday they're after, not one spent in a hotel.

The potential for bad publicity for the island is enormous. If the clampdown is effective, imagine what visitors are going to say if they arrive at their villa or apartment to find it has been closed by the authorities. They are not going to say: "Next time we come to Ibiza we'll stay at hotel." They'll say: "We're not going to that bloody island again."

Hopefully, the authorities are just making belligerent noises to please the hotel owners. The clampdown won't be as heavy as is suggested and it's just the start of a rational licensing system for rented properties. We'll see.


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