What are the differences between a regular or temporary rental contract?

What are the differences between a regular or temporary rental contract?

Differences between a rental contract and a seasonal rental contract. 

To clarify a first concept, it's not a tourist rental. Seasonal rentals are often confused with holiday rentals, but they aren't the same in legal or tax terms. In fact, renting for tourist use was expressly excluded in the last modification on the Law on Urban Leases, because it's considered an economic activitu that must be regulated separately.

So, the Seasonal Rental Law is a type of rental regulated by article 3 of the Urban Leasing Law. The Law calls it'renting dor use other than housing', as its purpose is not to satisfy the tenant's permanent need for housing. So, in terms of deposit, terms, rights and obligations, it's governed by different crieteria to those applied in a rental of a 'habitual residence'.

The key concept, to understand the difference between both rentals would be: The temporary rental is designed for those people, who need a rent in a certain way, as they are in this part of the city or the world, for specific reasons and when these reasons end, they will return to their country or city of origin, where they their home there for their usual use. 


Duration and use. The two types of contracts have different legal regimes. The main difference is the duration of each. In regular leases the duration is 5 years, although this may vary depending on waivers or extensions. Regular leases are governed by the Law on Urbans Leases (LAU). The seasonal contract is governed by the agreements established between the parties. The duration is freely agreed and it has been legally established that whats determines whether a contract is a seasonal or regular contract is not the duration but the need for the dwelling. 

The duration of the seasonal housing, the duration of the temporary contract, agreed between the landlord and the tenant, must be complied with. Unless otherwise stipulated in the contract. The durations of the temporary contract, agreed between the landlord and the tenant, must be complied with. 

Unless otherwise stipulated in the contract. The duration is not defined by the LAU, but it is important that it is clear that the purpose for which the tenant wants to rent the property temporarily. corresponds to this duration. 


The security deposit. According to article 36 of the LAU, the tenant, or if the agency manages it, has a period of 2 month to deposit, the deposit with INCASOL from the formalistation of the rental contract (art. 3 of Law 13/1996). 2 monthly payments of the rental income for rental contract for use other than as a dwelling and for habitual use, one monthly payment of the rental inome. 


Taxation. Seasonal rentals are taxed in the same way as regular rentals at the time of filing the income tax return. Therefore, expenses and income are identical. The problem stems from the fact that, unlike regular rentals, in seasonal rentals you cannot obtain deductions related to the rental of a property as a regular home, nor for the age of your tenant. 

Temporary rentals have to pay 0.5 ITP of the total seasonal rent (Impuesto de Transmisiones Patrimoniales).


Energy Certificate. Since 1 June 2013, all properties that you want to sell or rent need an energy certificate that reflects the consumption of the property. In the case of seasonal rentals, if the rental contract is for a period of less than four months, you are not obliged to have the energy certificate. 


Exempt from VAT. The owner is subject to the tax, but exempt from it. The law says that such leases are subject to the tax, but exempt from it. This exception only applies if you don't offer tourist services, such as food or cleaning of the rooms or the flat. In this case, you will have to pay VAT as a self-employed person or a company.


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