What is the difference between a tourist apartment and a normal residence?
14.05.2024What is the difference between a tourist apartment and a normal residence?
RESIDENTIAL HOUSING: It is designed for permanent residence, its usage license is a certificate of habitability, its VAT on purchase is 10%, and its finishes and building services are not demanding in terms of complying with tourism regulations and legalities. If the owner wants to engage in tourist rental, in addition to managing their tourist license, they must have the approval of the community of owners to carry out this activity, which is becoming increasingly complicated in Spain. The furniture is not contract-type, which means it’s not specifically manufactured for durability and resistance (services are not professional, there’s no reception, on-site management, etc.). It’s a property intended for individual and private use.
TOURIST HOUSING: It is conceived from the beginning for those owners who want to profit from their properties when they are not using them. Its VAT is 21% because it’s considered a business. Its construction must comply with all the tourist and legal requirements of the activity. Its furniture and equipment are contract-grade (reinforced furniture, fireproof fabrics, washable, etc.). The tourist license is already granted, and its final license is for commercial activity. Complete equipment of the property is mandatory for its perfect and immediate use. The rental must be professionally managed by a manager. It’s mandatory to have a reception at the establishment, tourist information about the area, invoicing for all services offered, check-in and check-out registration, complaint form, deposit, etc.
Can I request a VAT refund when buying a tourist apartment?
When purchasing a tourist apartment and joining a professional manager, the client’s activity for VAT purposes begins to be that of a lessor. Therefore, when buying the property, the fiscal services of the promoter will register the client in the fiscal model 036 to request the VAT refund from the Spanish Ministry of Finance. This request is made during the month of January of each year, and the refund time typically ranges from 8 to 12 months from the request. The company will provide fiscal support to clients until they obtain their refund, including responses to tax authorities, etc.
During the years of activity, the owner can also offset the VAT of their expenses and income, and settlements of taxes on profit or retention, a service provided by the management office in the same project or external consultancy, as preferred by each client.
As of today, the withholding tax on profits for non-residents in Spain but located in the European Union is 19% of the total gain.
Is the profitability of the tourist apartment guaranteed?
It’s not guaranteed; its growth, potential, and the seasons during which each owner will make the apartment available for tourist use are not known yet. The average profitability in the area is among the highest in Spain for vacation apartments, averaging between 7-9% according to statistical data. However, what is true is that MIAMI TOWERS SPAIN is the only super luxury project created in compliance with all the tourism regulations of the Region of Murcia (Spain), with a professional management company located in the building offices. Therefore, combined with its unique location between two seas, we are confident that professional tourist operators from around the world will be eager to collaborate in sending their clients to spend their holidays in this impressive and majestic tourist residential complex.
Can I resell my tourist apartment?
The apartment can be freely sold like any other property, and the buyer must comply with their corresponding taxes as the initial buyer did, assuming the obligations, rights, and rules of the building.
What obligations and rights do I have regarding the Manager of the tourist apartment?
The owner is obliged by the Tourism Law of Murcia to delegate the management of the rental of the property to a professional Manager registered in tourism. This manager will appoint a Director to coordinate the operation of the resort, maintenance, rental, use of facilities, services, etc.
The available dates will be agreed upon between owners and the manager, with the rental being mandatory by law for a minimum period of one month and for more than one person.
In case of non-compliance due to lack of clients for occupancy, it can also be demonstrated through official advertising. The manager may and must collaborate, if necessary, with any online platform, tour operators, etc., in order to maximize occupancy of the apartments and thus achieve the maximum possible profitability for both the manager and the owners.
What service fees does the manager charge?
Service Fees: The service commission to be charged by the manager will vary depending on whether the client is acquired directly or through collaborators, online platforms, etc. For direct clients, a 15% fee will be charged on the total rental yield. If the occupancies are from clients referred by commercial partners, their fees will be applied, always agreed upon in advance with the apartment owners. We understand that collaborations will always allow us to have higher occupancies than we could achieve individually. Therefore, external agreements will always favor the performance of the apartment in high and low seasons.
What is the rental price of my apartment?
The rates will be adjusted at the time of the establishment’s opening. The manager, through a market study considering all variables, quality of apartments, and services, will set a value for each season. All of this will be informed and agreed upon in advance with the clients.
Why buy a luxury tourist apartment in Miami Towers?
In short, the buyer of an apartment in MIAMI TOWERS, in our opinion, must fit into the following profiles:
Profile 1: Investor client intending to use the property in seasons and when not using it, agrees to and delegates its professional rental.
MIAMI TOWERS in this case is 100% recommended over other market alternatives for the reasons mentioned above.
Profile 2: Investor client without interest in using the property at any time of the year, agrees to and delegates its professional rental for the entire year, meaning the client purchases solely for rental purposes.
MIAMI TOWERS in this case is 100% recommended over another market alternative for the reasons mentioned above.
Profile 3: Non-investor client whose sole purpose is to use the property throughout the year, without any intention of renting at any time.
MIAMI TOWERS, in this case, is not recommended, and we advise considering other market options.
Profile 4: Investor client with the intention of using the property, agrees to and delegates the property entirely but adapts and, during periods of non-occupancy, agrees with the manager for its use, and we repeat adapts to them.
MIAMI TOWERS, in this case, is 100% recommended over another market alternative for the reasons mentioned above.
When attending to a client through the commercial department to explain the MIAMI TOWERS project, it is indicated that the essence of the project lies in all the advantages offered by professional rental management (Manager located in the resort office), as well as the attractiveness of combining occasional personal use with returns obtained through professional rental. It should be made clear to the client that it is a combined product (personal use and professional rental), so the client must understand that total or partial rental assignment is mandatory, which will be agreed upon with the rental Manager when the time comes.
Is tourist liability insurance necessary?
Yes, tourist apartments are required to have a minimum and special civil liability insurance to cover accidents that may occur within the properties. The manager of Miami Towers will manage not only civil liability insurance but also an all-risk policy with a specialized company, encompassing all the apartments under a single policy. The manager will be able to handle it to deal with accidents or situations that require reporting to the insurer, thus not causing inconvenience to the owners. Additionally, by having a global policy, a better price will be obtained for everyone, and it will be perfectly affordable and comparable to any regular insurance. As of today, according to previous estimates, prices range between €150/€250 per apartment.