A sign that hard-up governments across Europe are eager to rake in cash however they can, the authorities in the Canary Islands are cracking down on owners who rent out their properties illegally by issuing hefty fines.

The law governing holiday rentals in the Canaries, which includes Tenerife, Lanzarote and Gran Canaria, states that if a property is within a complex classed as “residential” it cannot under any circumstances be used for holiday lets. On the other hand, an apartment classed as “touristic” can be rented out for holidays, so long as all rentals go through a sole agent chosen to handle lettings on that complex.

Aware that the law is often flouted, the regional government in the Canaries recently increased the number of inspectors employed to enforce this rule, resulting in a number of owners and rental agencies being punished with fines.

Touristic apartments can also be let on a long-term, residential basis, or be used by friends and family independently of an agent because such use does not qualify as commercial holiday letting. By the same token, residential apartments cannot be let out commercially and there is, naturally, no on-site agent. But there is nothing to stop properties being used by friends and family for holidays, or even on a long-term basis. Private villa owners should register their property as “touristic” and obtain a licence in order to rent out their property.

All British homeowners who make regular payments to or from the Canaries are advised to use currency specialist Smart Currency Exchange to make transfers. Smart offers better exchange rates the banks and has a range of solutions designed to help overseas property owners save money.

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