AirBnB Claim New Tourism Law Will Cost Balearics 550€ Million

The Private Property Rental Portal Claim the New Tourism Regulations Will be a Disaster for the Balearic Economy

AirBnB have announced that the Balearic economy could lose more than 550 million euros per year under the new tourist rental regulations.

They state families on the island stand to lose 100 million euros of that figure.

This follows changes to the law that hold the websites responsible for allowing the advertising of private properties that do not hold the correct licences.

The Island Consell have had little success in tackling the issue by pursuing the property owners direct, but now it seems that the fear of huge fines up to 400,000€ has had an impact, with thousands of properties being withdrawn form sites including AirBnB in the past two weeks.

The platform has released a statement showing that AirBnB generated 400 million euros to the economy last year, so the moratorium, which prohibits ‘shared housing’ “could drastically reduce the benefits of local businesses”.

According to the AirBnB estimates, each family  renting a home with the portal will lose around 833€ per month and there would be a negative impact on tax collection.

The tourist rental platform has warned that the moratorium will have “disastrous effects on the family economy of the Balearic Islands, local shops and small towns”.

The impact on smaller towns is because 70% of ads in AirBnB are outside the main tourist areas, according to the platform.

The Director General of AirBnB in Spain and Portugal, Arnau Muñoz, is trying to assure that the platform is “part of the solution to the challenges of mass tourism created by large hotel chains” and has argued that “it helps to build sustainable tourism that benefits local families and their communities.”

Thousands of Illegal Apartments Removed From Holiday Websites, But Thousands Remain.

The current legislation which is in force prohibiting  tourist rentals in private apartments was first inaugurated in 2012 through the then PP of José Ramón Bauzá.

For 5 years since diferent administrations have struggled to enforce the legislation. Their efforts have been largely ineffective and have resulted in few prosecutions. Those in the business of renting illegal and unregistered properties to tourists have had little reason to cease their activity. If they were one of the tiny percentage who did get caught, Ibiza’s current market combined with the complicated and lengthy legal process would result in them making more money in rental income than the maximum fine possible over the course of the 3 years it would take to be heard in court.

Thousands may have gone, but thousands certainly still exist. We searched AirBNB for 4 people for 5 nights 18th to 23rd September. We looked at Marina Botafoch, known as one of the most prolific areas of illegal apartment renting. We specified an elevator, the one filter that would only return apartments (which by definition cannot be legal), and 158 were returned as available in the small area visible on the map. We looked through 6 and none had any information on licencing, and none replied to our message asking for confirmation of their tourist licence.

During those 5 fives the Consell have introduced special reporting initiatives, employed more inspectors, and even had a besoke computer programme written. None have had any significant effect.

However following the Balearic Government adopting a line of fining the website on which the property is advertsised, it seems that corporate level fears of huge financial sanctions are doing the job of stopping the practice of illegal rents without the need for inspectors or length legal proceedings to ever come into play.

The approach of fining the websites for hosting unlicensed renters has been in place in Berlin and then more recently Barcelona for some time.

Since the legislation of a maximum 400,000 euro fine has been in place, websites including market leader Air BnB, are offering far less properties than before. The Consell puts the reduction in the thousands.

Dual Liability

The website portals are liable for fines of up 400,000€ if they allow adverts of apartments with no tourist license, and the owners themselves can still be liable for 40,000€.

Aptur, the association that represents the interests of the tourist letting sector, has chosen to comply with the legality and has warned its members of the consequences of advertising and renting illegally, it is now easily prosecutable with the Barceló Law.

Aptur sent a letter to its partners in which they warn that fines of up to 40,000€ are in effect for those who rent apartments without a license for more than 30 days, and those who announce themselves as holiday rentals without having the correct authorisation from the Tourist Council.

Outstanding Bookings

The apparent concern of many homeowners is what to do with existing bookings? When they were made it was already illegal, but largely ignored. It seems many are removing their adverts however will, in all likelihood, honour bookings and hope for the best while they are fulfilled.

Subsidised Apartment Owner Faces Fines For Illegal Tourist Rentals

The Government has opened a file against the owner of a subsidised apartment who rented it on AirBnB

The ‘landlord’ faces penalties of up to 3,000 euros for each time the apartment was rented to tourists.

The Government, through the General Directorate of Architecture and Housing, has opened a sanctioning file for the tourist rental of a VPO apartment – government subsidised housing – after an anonymous complaint sent via the internet.

In a statement, it is specified that according to the current legislation, the person responsible for the rentals faces penalties of up to 3,000€ each time the apartment was let out to tourists.

The fines can be imposed by both the General Directorate of Architecture and Housing, for the rental of a subsidised house, and also by the Consell de Ibiza for leasing an apartment to tourists.

The Consell de Ibiza released a statement saying they had also opened proceedings for the tourist rental of a VPO apartment that was listed on Airbnb. The proceedings were initiated following to an anonymous complaint received via the tourist inspection email

[email protected]

As a result of this complaint, the inspectors of the Consell verified that the house was indeed advertised on Airbnb. On the site, the property offered various services like breakfast, shampoo, an internet connection, towels and added that you could book for nights. They also confirmed that, according to the information that appeared on the apartment listing, the ‘landlord’ had rented it at least a dozen times. The Consell de Ibiza has informed the Delegation of Finance and the General Directorate of Housing of the Balearic Government