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Holidaymaker’s demand for holiday rentals outstrips hotels’ with Covid-19
By Raymundo Larraín Nesbitt
Lawyer - Abogado
21st of June 2021
The overarching impact of Covid-19 in the real estate market cannot be understated enough. We’ve already glossed over in previous articles its huge impact on buying & selling homes. How buyers are now asking for secluded properties, with large gardens, open spaces, large terraces, from which to live and even work from. Marbella is regarded as a safe destination, far away from large city crowds.
Now with the holiday season upon us, we are witnessing again changes in consumer habits developing new trends. Whereas before over the last years demand was split evenly between hotels and rental accommodations, this year we have witnessed how demand on the latter has clearly outstripped that of hotels to the point it’s reportedly getting harder (and more expensive!) to find private rentals. Holidaymakers shun hotels to avoid large agglomerations of guests out of fear of the virus. They are instead looking to book small privately-run accommodations (holiday rentals). Particularly detached villas with spacious gardens and apartments with large open terraces.
For the first time ever, we’ve witnessed a new trend where holidaymaker’s demand for holiday rentals surpasses that of hotels’. 2020 and 2021 have been horrible years for the tourism industry, particularly hotels have suffered the brunt of the ongoing pandemic. And to make matters worse, the Spanish government has approved on the 1st of June a massive rise in the price of electricity (up to 50% more) which has translated on average for hotels to an increase of 10% on their fixed costs. Spain’s electricity is the most expensive in all of Europe with a whopping VAT of 21%; every other country in Europe applies a much lower VAT rate i.e. the UK's is 5% VAT.
I take the opportunity to gently remind non-resident landlords offering holiday rentals in Spain that they need to submit quarterly taxes on renting out. Our company offers the following competitively-priced accounting service: Holiday Rental Accounting Service (HRAS)
The main highlight of our tax service is that we reduce landlord’s tax bills by 70% (or more) on applying for tax relief. More on this explained in our taxation article: Save 70% on your landlord tax bill – 8th March 2019. Even our fees to calculate and file these tax returns are 100% tax-deductible.
If you are planning to rent out in Spain, do it legally; contact us to greatly reduce your landlord tax bill.
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