Tourist Tax Rise in 2018
Last week saw an announcement that the Balearic Tourist Tax is to be doubled in 2018. Introduced in July 2016, the tax is payable by all tourists over the age of 16 years and currently ranges from 0,50€ to 2,50€ per day, in the summer, dependent on the category of accommodation. The hike in tax for the coming year has been welcomed by some parties including trade unions and ecologists. The tourism minister Biel Barceló has insisted that there is ‘social acceptance’ of the tax which is aimed at promoting sustainable tourism.
Much of the business sector, however, have condemned the move and tour operators are against the tax rise with CEO of Thomas Cook Tour Operators, Peter Fankhauser, asserting that the family tourist segment might consider looking for alternatives to the Balearics because of the extra expense. So far the levy certainly does not seem to have adversely affected tourism, as visitors to the Balearics swelled to record numbers for the eighth consecutive year.
In May 2017 visitors from the UK alone rose by 20% in Mallorca, and the Balearic Islands have become, globally, more attractive as holiday destinations. Some of the rental business has shifted to privately owned accommodation where growth has overtaken that in the commercial sector for the first time, making buy-to-let a very attractive proposition. The Government insists that tourist spending has not been affected by the introduction of the tourist tax but small business owners disagree, whilst supermarkets and larger retailers have actually reported profit increases, due, in no small part, to private holiday rentals.
It has to be noted that any anticipated reduction in hotel bookings during September will be counteracted by higher prices. Revenue from tourist tax is intended to improve the infrastructure of the islands, which, in turn will make them more attractive to the rental market. Projects such as the long-awaited completion of the promenade in the bay of San Antonio, Ibiza, have been promised an injection of cash which will enhance property values in the future.
Reaction To New Rental Legislation
Amendments to private rental laws, introduced in July this year, have provoked strong reactions from affected parties. The legislation was put in place to regulate home rentals, whilst recognising the need for such properties as an alternative to commercially owned holiday accommodation.
The Government maintains that the new laws are necessary to ensure proper licensing, standards and the payment of relevant taxes. The political party Ciudadanos, in the Balearics, however, have condemned the legislation, calling it ‘variously cynical, shameful and an insult to the citizens’ intelligence’.
Independent home rental company, Airbnb, recently, met with the Tourism Ministry and is said to be awaiting legal advice on their “interpretation” of the new laws. HomeAway, another private rental agency, reported that users had been advised to remove adverts for properties deemed not to comply with the new laws. Meanwhile a Catalonian court decision led to an overruling of a fine imposed against Airbnb fuelling speculation that the legislation will have to be further amended.
The law, as it stands, still permits private rental to holidaymakers on the provision that proper licenses are submitted. It is essential, therefore that sound legal advice is sought before entering the potentially highly lucrative market of holiday rental.
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