Treasury Requires Tourist Rental Platforms to Submit Quarterly Informative Returns

1 March 2018 – Expansión

The Government wants to put a stop to the fraud that is happening in the emerging market for tourist apartments. To this end, it is going to intensify the inspection of companies dedicated to the transfer of use of flats, such as Airbnb, HomeAway, HouseTrip, MyTwinPlace, Only-apartments, IntercambioCasas and Rentalia. For that, it is going to require them all to provide much more information and it will conduct a quarterly control of all of their activities. Through this, it wants to improve the “prevention of tax fraud for people and entities, in particular, the so-called collaborative platforms that mediate the transfer of use of homes for tourist purposes”, according to the draft ministerial order designed to put a stop to these kinds of irregularities, to which Expansión has had access. The text approves the so-called “model 179 informative declaration”, together with the conditions and procedures for presenting the required information before the Treasury.

The measure forms part of the strictest control that the Treasury wants to exercise over intermediaries in a rising sector, such as the tourist rental market, which has experienced a genuine boom in recent years and which now has 513,820 beds, 30% more than the sum of Spain’s hotels, hostels and B&Bs (393,838), according to data from Exceltur.

Until now, some of the main initiatives have been directed at users themselves, such as the warning issued last year by the Tax Authorities to more than 21,500 people that had leased their homes through these platforms, advising them that they must declare the money received in their tax returns.

The Treasury wants to close the door on the lack of transparency surrounding certain tourist rentals, behind which are sometimes even hotel chains, which lease homes through the platforms, and are in turn disguised as private users.

As a result, the ministerial order that the Department of Tax Management at the Tax Authority has prepared, emphasises certain concepts that may seem obvious, such as the importance of identifying the owner of the home or of the right “by virtue of which use of the dwelling is transferred”, if that is different from the rightful owner of the home. Moreover, all of the features of a property must be identified. Together with the general registry information, the specific details of each one of the operations that are carried out must be reported: the number of days during which a client leases the home and the price paid to the owner in exchange for its use.

This new order from the Treasury comes in addition to local legislation from many Town Halls such as those of Barcelona, Madrid and the Balearic Islands, which have proposed “ceilings” to stop the overheating of rental prices that has resulted from the boom of Airbnb and similar platforms. In fact, according to calculations from Urban Data Analytics for this newspaper, the upwards trend from the collaborative economy has caused rental prices to rise by an additional 6% in the Eixample district of Barcelona and by an additional 4% in the Centro district of Madrid in one year. That happens because the properties in question generate double the returns of a long-term rental property “A 40 m2 one-bedroom home in the Puerta del Sol area of Madrid generates €1,513 per month on Airbnb and a traditional rent of €700”, says the company by way of example.

Grace period

(…) This ministerial order (…) will apply to all transfers of homes for tourist purposes that take place on or after 1 January 2018.

The frequency of these returns to the Treasury will be quarterly (they must be submitted during the calendar month following the end of each quarter). But this year, in order to facilitate the process, those corresponding to the first two quarters of 2018 may be submitted up until 31 December 2018. Those corresponding to the third and fourth quarter will have to be submitted before 31 October 2018 and 31 January 2019, respectively (…).

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake

Reyal Urbis’ Liquidation Process Begins

6 September 2017 – Expansión

Three months after receiving the “No” decision from its creditors to its payment proposal, the real estate company Reyal Urbis is starting its liquidation process, with Sareb, the Tax Authority and several banks, such as Santander, as the main beneficiaries.

On Monday, the property developer controlled by Rafael Santamaría received the ruling from Mercantile Court number six in Madrid, ordering the launch of the liquidation phase. In this way, Reyal Urbis will star in the second largest bankruptcy in Spain’s history, with debt amounting to more than €3,500 million, exceeded only by that of Martinsa Fadesa.

This new phase will be led by the bankruptcy administrator, given that the judge is continuing to suspend the managers of the company and has ordered the termination of its corporate governance bodies.

Since its appointment as the bankruptcy administrator in February 2013, the audit firm DBO has taken care of the company’s legal proceedings. It was responsible for submitting the payment proposal prepared by the company for its creditors, which included discounts of more than 90% on its liabilities. Only 32.7% of its shareholders supported that payment plan in June, which effectively condemned the company to extinction.

Now, the administrations will have to determine the best solution for the creditors, which are owed around €3,600 million, according to the most recent figures presented, whilst the company owns assets worth €1,170 million as at 31 December 2016.

Portfolio

The company’s assets include €188 million corresponding to properties that generate rental income and €863 million relating to around 200 finished homes and land. Specifically, Reyal Urbis owns one of the largest land portfolios in Spain, with 6.7 million m2, exceeding the large property developers such as Metrovacesa (6 million) and Neinor Homes (1.3 million).

Distributed over more than 30 cities in Spain and Portugal (the company owns assets in Lisbon and Porto), the portfolio of land and rental assets, such as the best-located hotels in the Rafael Hoteles chain, as well as its stake in the Castellana 200 retail and office complex, will be the jewels in the crown to be shared out amongst the creditors or sold to allow them to recover at least some of their investment, according to sources close to the process.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Tourist Rental Homes Generate Almost €14,000M In 2 Years

10 July 2017 – Expansión

HomeAway, one of the main tourist rental home companies, estimates that the economic impact generated by this activity in Spain during the period from June 2015 until June 2017 amounted to almost €14,000 million. That amount exceeded the impact generated during the previous two-year period by €2,824 million, when it amounted to €11,120 million, according to the IV Holiday Rental Barometer in Spain, compiled by HomeAway.

The use of tourist homes has increased by 25% in the last two years, given that they were used for more than 22 million visits.

On Thursday, the professor of Marketing at the University of Salamanca and author of the study, Pablo Muñoz, highlighted the consolidation in the sector amongst clients, given that 32.6% of those surveyed use both hotels and tourist apartments, depending on their requirements. 61% of the people surveyed only ever stay in hotels.

The report reveals that the users who stay in these types of homes spend more during their stay (€477) than guests who sleep in hotels (€331). The Director General of HomeAway in Spain, Juan Carlos Fernández, underlined that this economic impact is reflected, in particular, in those businesses located close to tourist homes.

On the other hand, HomeAway confirmed that its legal team is analysing a draft bill that is being promoted by the Ministry of Finance to analyse “the extent to which a national Administration has the power to request data about users” and to establish its position before communicating it to the Tax Authority.

Collaboration

The Communications Director at HomeAway, Joseba Cortázar, said that “HomeAway is open to collaborating with the Tax Authority to provide greater transparency in terms of tax collections”. And he reiterated that the veto of neighbouring communities is a possibility that is already reflected in the Horizontal Property Law: “This activity cannot be carried out if the community bylaws prohibit it”.

Original story: Expansión (by Miriam Vázquez)

Translation: Carmel Drake

La Generalitat Leases ‘Distrito 38’ Building From GS

15 April 2015 – Expansión

La Generalitat de Cataluña has rented a building measuring 8,000 square metres in Barcelona’s Distrito 38 office complex, which will be occupied by the Tax Authority. The property used to be owned by Bankia but was acquired by Goldman Sachs.

Original story: Expansión

Translation: Carmel Drake