Starting a B&B or campsite on the Costa Blanca, a dream or nightmare?

Do you dream of opening a hotel, a winery, an olive or oil mill or even a golf course on fallow land? You are certainly not the only one, as many people are considering realising their dream and giving their life a new direction.
As a property finder, we therefore regularly receive questions about the possibilities and the laws and regulations involved. Therefore, we have tried to provide a concise overview of the complex application procedures you can expect if you decide to realise your dream project on rustic land in Spain.
As the process involves many rules and regulations, it is important to be well prepared and not just jump into the deep end. We therefore recommend that you get advice from experts in legal and construction matters, so that you do not encounter any unpleasant surprises. In short, this overview therefore only serves as a basis.

Conditions for opening a tourist OR Business activity on rustic land

If you want to set up a Casa Rural, B&B or campsite (business activity) on rustic land or non-urbanised land, you need to get special approval from both the local and regional government. This land is exclusively zoned for agriculture, forestry and nature management, so a derogation from agricultural zoning must be approved for that particular plot. There are also a number of conditions the plot must meet, such as a minimum size of 5,000 m² and the construction of good access roads and sufficient parking spaces, for example . In addition, you need a licence to open and run your business. This is called Declaración de Interés Comunitario or DIC for short.

Note: If the activity is in urbane or urbanised areas, different rules and regulations apply.

How does the application for a DIC work?

We explain it to you in a step-by-step plan and recommend that you call in a multidisciplinary team (for example; specialised architect, engineer, contractor and lawyer) in advance to guide you through this, so that no mistakes or misunderstandings arise during the process. This will not only cost you extra money, but more importantly even more time.

1. Pre-project

• The moment you have in mind to start a B&B in Spain, for example, the first thing you need to do is design a business project, through plans and detailed documentation, which is drawn up by an architect. The so-called ‘pre-project’.
  Average time to prepare an architect's pre-project: 3 - 6 months

2. First impression, pre-approval town hall

• This pre-project should be submitted to the city council to give you an idea whether the municipality would be willing to change the classification of the land and approve the project. That is, after all possible works and modifications to buildings, infrastructure and the like have been carried out.
  Average time to get a response from city hall: 6 - 12 months

3. Final project

• After you have received confirmation from city hall that they would be willing to approve a final design declaration of ‘common interest’ (DIC), the final project has to be drawn up through plans by specialised architects, engineers etcetera. A much more detailed project, which consists of two parts: for instance, guarantees must be provided that there will be drinking water and sufficient electricity supply for all guests and the installations used, that the environment will not be affected, that no water will be wasted or damage will be done to the ecological infrastructure, etcetera. This is a voluminous document of sometimes more than 100 pages, depending on the size the project.
  
  • Urbanistic Project, which must include a description of the activity and facilities, justification of the need for the site in the rural environment, information and planning plans, as well as the description of accesses to the activity and necessary works, among others.
  • Landscape Inclusion Study, the content of which is adapted to the type of proposed activity and the landscape in which it is located.
  Average time for an architect to prepare final project: 6 - 15 months

4. Approval by city hall

• The final project must be considered by the municipality and receive approval from the city council.
  Average time to get final project approved by city hall: 6 - 12 months

• After the municipality gives its approval, the project has to be submitted to the Comunidad Valencia. Individual approval is needed from all regional government departments, such as industry, tourism, environment etcetera. If one department does not give its approval, you can consider the project rejected.
• If the Regional Government approves the project, they will indicate all the necessary work you need to do in and around the property. These include construction of electricity (sufficient capacity, new supply line, additional transformer, etc.), water supply (drinking water through network or in a depot, well drilling, etc.), access roads (good accessibility, widening, new construction, etc.), sewerage / septic tank, (rain) water drainage, parking areas, (fire) safety, etc.
• You will be asked to carry out the above works as per the administration conditions and only then the land where the property is located will be transferred from ‘rustic’ to ‘commercial / hotel’.
  Average time to get the final answer from the regional government: 1-3 years (!)

Conclusion: The total time to get the DIC is 3-6 years, depending on the project and the region.

You have received the DIC, now what are the next steps?

1. Activity permit application

• Once the infrastructure works are completed, you can apply for the final activity permit for the town hall. An activity permit opening project must be presented to City Hall. This will be passed on to the town hall through another project by the architect, namely focusing on the business activity. You can start the procedure already during the application for the DIC and hope that the municipality will already grant you the licence under the condition that the DIC is approved.
  This licence can take 3 - 6 months depending on the project and the area.

So are you finally there?

No, because there are still a few steps to take. However, you can already largely prepare these in order to shorten the time of their implementation.

1. Registration of a company or as a self-employed person

• If the town hall approves the project for the activity, you will get the licence and need to register the business as a self-employed person or an SL (‘Sociedad Limitada’ - similar to a limited company), as well as apply for all the health requirements and permits, certificates, etc. Take the help of a gestor or tax expert for this. For example, an SL can hold all the necessary funds and billing can be done from the SL.

2. Registration in tourism department

• Lastly, it is advisable to register your business in the tourism/business department for designation of the category your business will fall under, e.g. a * or ** star hotel, B&B, casa rural etc. This is with a view to launching your lodging commercially on websites or social media.
  This registration depends on the speed of inspection.

Are there cases where you do not need to apply for a DIC?

A DIC (Declaración de Interés Comunitario) can be avoided if it concerns the following exploitations, unless the municipality decides otherwise:

1. Rural tourism accommodation, catering establishment or similar, provided that the operation relates to the restoration of traditional architectural heritage or the urban development plan is adapted to this law and the built-up area does not exceed 500 m2.
2. Wine cellars, oil mills (think olive oil) or other facilities for the agri-food industry

There are other exceptions, but they are quite complex and too extensive to describe in this blog. For this, we refer you to an expert in this field where appropriate.

Then, by a legislative amendment (Ley 1/2019, de 5 de febrero), there are also municipalities exempted from applying for a DIC. You can check the complete list here in 'Anexo 4' .

In short, this means that one will always have to apply first for a permit (project) for your plans to the relevant municipality, with explicit reference to the exemption for the Declaration of Community Interest (DIC).

In the following cases, the said DIC might not be required for the use or development of common rustic land:

(a) In municipalities classified as rural (‘rural’ - green on the map) according to the territorial strategy of the Comunidad Valenciana.

(b) In municipalities considered intermediate (‘franja intermedia’ - orange on the map) according to the same territorial strategy, provided the land has a land use plan that complies with current legislation. It should also be explicitly stated that part of the municipal area is exempted from this declaration because it exhibits characteristics typical of rural areas, taking into account factors such as population composition, accessibility, economy and social aspects. In practice, many municipalities have not yet amended their zoning plans and often do not intend to do so. In that case, you need to follow the above procedure.

NB In areas marked Cota 100 (blue on the map), a DIC should always be submitted.

Are there any additional costs to rezone rustic land?

Yes, there are costs associated with transforming the zoning of rustic or undeveloped land. After all, when the zoning of the land is changed, it increases the value of the plot. According to the 1/2019 Act, a use and furnishing fee is set at the declaration of community interest, which is determined by the municipal council. This fee is 2% of the estimated cost of the required construction work and services.

• The cost is provisionally determined and finally approved when the construction project budget and permits are issued.
• The fee is payable once when the building permit is obtained. The municipality may agree to split or defer payment within the validity period of the permit.

However, there are exceptions:

• The municipality can waive the fee for non-profit activities (such as welfare, healthcare or cultural projects) or reduce the fee by 50% for industrial, sustainable or employment-related projects.

If the fee is not paid, the declaration of community interest (DIC) and building permit will be revoked.

This fee is collected by the municipality.

CONCLUSION

Opening a tourism activity such as a Casa Rural, B&B or campsite on rustic land in Spain requires specific approvals from both local and regional authorities. Since rustic land is basically zoned for agriculture, nature management or forestry, the zoning of the land often needs to be changed. Various conditions must also be met, such as a minimum plot size of 5,000 m², and obtaining a Declaración de Interés Comunitario (DIC) is usually necessary. This process is complex and costly (count on €25,000 - €75,000 depending on the project - excluding construction costs). Moreover, the process can take between 3 and 6 years, depending on the project and the region.

In some cases, there are exceptions and a DIC procedure can be avoided, for example when restoring historical heritage or agro-industrial initiatives under strict conditions. Given the complexity of the process, engaging good professionals such as a competent and specialised architect, engineer and lawyer is a must! With the right preparations, support and advice, but above all a lot of patience, opening a tourist activity on rustic land can be realised successfully.

In short, with the right expertise and a good plan, this challenge can turn into an opportunity to make your Spanish dream a reality!

One last tip: The least risky and probably fastest way to realise your Spanish dream is to take over an already existing and certified concept, which already has all the paperwork in place.

Courtesey of: Casas Benali, Refugio Marnes, Casa Bons Aires, B&B Buena Idea, Camping Natura en Camping Refugio Guadelest

Disclaimer

This text is for information purposes only and provides a general overview of the conditions and procedures related to opening a tourist activity on rustic land in Spain. Immofy is not a legal or specialist expert in this field and cannot guarantee the accuracy, completeness or timeliness of the information and no rights can be derived from it. Given the complexity of the regulations and variations by region, we always recommend consulting a specialised expert, such as a lawyer, notary or local architect, for personal and professional advice when starting a project.

Sources: 

• LEY 1/2019, de 5 de febrero, de la Generalitat, de modificación de la Ley 5/2014, de 25 de julio, de ordenación del territorio, urbanismo y paisaje de la Comunitat Valenciana: https://www.dogv.gva.es/portal/ficha_disposicion_pc.jsp?sig=001234/2019&L=1
• LEY 5/2014, de 25 de julio, de la Generalitat, de Ordenación del Territorio, Urbanismo y Paisaje, de la Comunitat Valenciana: http://www.dogv.gva.es/datos/2014/07/31/pdf/2014_7303.pdf