New Spanish regulation on timesharing agreements
On 17 March 2012, the Official Gazette published Royal Decree-Law 8/2012, of 16 March
2012, regulating timesharing agreements and other holiday contracts between entrepreneurs
and consumers (hereinafter the RDL).
The RDL repeals Law 42/1998 and implements Directive 2008/122/EC on the protection of
consumers in respect of certain aspects of timeshare, long-term holiday products, and resale
and exchange contracts. Details of the RDL are summarised below.
Types of contracts
a) “Timeshare contract” means a contract of more than one year’s
duration under which a consumer, for example, acquires the right to use one or more
overnight accommodation for more than one period of occupation.
The Explanatory Preamble of the RDL explains that such a definition may also be
applicable to contracts on accommodation in boats and caravans.
RDL establishes a minimum duration of one year and a maximum of 50 years. Annual
period of occupation may not be less than seven continuous days.
b) “Long-term holiday product contract” means a contract of
more than one year’s duration under which a consumer, for example, primarily acquires
the right to obtain discounts or other benefits in respect of accommodation, in isolation or
together with travel or other services.
c) “Resale contract” means a contract under which a trader, for
example, assists a consumer to buy or sell a timeshare or a long-term holiday product.
d) “Exchange contract” means a contract under which a consumer,
for example, joins an exchange system which allows that consumer access to overnight
accommodation or other services in exchange for granting to other persons temporary
access to the benefits of the rights deriving from that consumer’s timeshare contract.
Specific rules on advertising and pre-contractual information
a) Rights concerning information
Before concluding a contract, consumers shall receive information on the rights that they
can exercise and all costs associated with the contract. They shall be informed whether
they have a right of withdrawal, its duration and the conditions under which it may be
exercised. This information is an integral part of the contract and may not be modified.
b) Right of withdrawal
The right of withdrawal by the consumer may be exercised without any justification within
14 calendar days as from signature or receipt of the contract or of any binding document.
This right of withdrawal is to be described in the standard pre-contractual information
form. If this obligation is not complied with, the withdrawal period will be extended to one
year and 14 days. Furthermore, if the trader does not provide pre-contractual information
to the consumer, the right of withdrawal period is extended to three months and 14 days.
Payments in advance
Payments in advance are strictly forbidden.
Form of the contracts
The contract shall be supplied in writing, on paper or another durable format. Consumers
may choose the language in which the contract is written, whether the language of their
country of residence or of their nationality, provided it is an official language of the EU.
Special rules on timeshare contracts
A timeshare regime may only be created on a building, residential complex, or different
architectonic sectors thereof. The real estate must have at least ten accommodations.
The timeshare regime must be created by the owner of the real estate by granting a public
deed before a Notary Public and subsequent inscription in the Property Register.
Services inherent to a timeshare right may be provided directly by the owner or by a services
company. The services company cannot be domiciled in a tax haven and should have, at
least, a branch domiciled in an EU member State.Transfer of the rights derived from a
timeshare contract cannot use the term “multipropiedad” (ownership) or any other containing
the word “propiedad” (owner).
Acquisition and transfer of rights derived from a timeshare contract may be inscribed in the
Property Registry provided it was documented in a public deed.
Tax treatment of rights on timeshare contracts
Income Tax: If timeshare right duration exceeds two weeks per year, the beneficiary
must recognise deemed income amounting to 2% of the cadastral value (“rateable
value”) of the real property (1.1% of cadastral value if that value was reviewed after 1
January 1994 or acquisition cost of the timesharing right). Deemed income will be
calculated on the basis of annual duration of the period to enjoy the right.
This is applicable to both tax resident beneficiaries (that will be subject to Personal
Income Tax at progressive tax rates) and non tax resident beneficiaries (that will be
subject to Non-Resident Income Tax at 24.75% flat rate).
Net Wealth Tax: The rights derived from those agreements will be valued at the
VAT: The transfer of timeshare rights referred to buildings, residential complexes, or
different architectonic sectors thereof, will be subject to the reduced 8% VAT rate.
Transfer Tax: The transfer of “user” rights between individuals, not subject to either
VAT or IGIC (Canarian Indirect Tax) will be taxed at a rate of 4%.
RDL is not applicable to those contracts signed before 18 March 2012 unless the parties
agree to amend them. Pre-existing regimes will last for a maximum period of 50 years.
Entry into force
The RDL entered into force on 18 March 2012.
Contributed by Nexia Spanish Desk,
Maite Fandos - email@example.com
José Ángel Martínez - firstname.lastname@example.org
Antonio Chicote - email@example.com