Amid the debate over the limits of tourism and its impact on the housing market, Ibiza has issued a warning to seafarers: Breaking the law is expensive. Very expensive. So much so that what seems like a great business at first glance risks turning into a failure. That’s exactly what happened to the homeowners on the island of Ibiza who were breaking the law and renting out their homes to tourists to earn $500 a day. The authorities caught them and they had no choice but to sell the house to pay the fine.

This may seem like an isolated case, but it leaves many readings behind.

A very profitable business. That’s probably what the owners of the house, which is part of a series of developments in Roca Llisa, Santa Eulària des Riu, thought. The owners decided to rent the house to visitors, ignoring local regulations that state that “the use of tourist accommodation in the form of holiday rentals in multi-family buildings is prohibited.” And it’s not cheap either: almost 500 euros a day.

And a very big punishmentBut for the owners of the Roca Llisa home, vacation rentals have become a toxic business for a very simple reason: authorities found they were breaking the law and fined them six figures.

More precisely, the Municipal Council of Santa Eulària des Riu imposed a fine of 118,000 euros, which has since reached 143,650 euros due to accumulated additional fees and interest. It may seem high, but the Municipal Council argues that the initial fine is in line with that stipulated in the Balearic Islands Urban Planning Law 12/2017: 75% of the value of the house.

But no matter how severe it is, the real question is not the amount of the fine, but what happens after the City Council imposes it. In a note published on Monday, Santa Eulària des Riu says it has already collected more than 140,000 euros, and explains that the landlords were able to pay this amount after selling the houses they were renting to tourists at the time.

We’re going back to 2022. After the municipality insisted that the owners used the house for “holidays”, the municipality said, “As the City Council learned, the collection took place after the sale of the property in order to be able to take over the amount of the fine.” Without respecting the Municipality’s Additional Bylaw, “illegal” rentals. The execution and pocketing of the fine is actually just part of a process that goes back several years.

The City Council began its investigation two years ago, in 2022, after receiving information from the Consell Insular d’Eivissa, which launched its own enforcement process. In the case of the local government, the focus was on the change in use of the house, from being a residence to being used for visitors.

With the services of a hotel“The information collected allowed us to verify that this apartment is offered for tourist rental and also offers certain services specific to this type of accommodation,” the Consistory adds.

Thanks to the work of municipal technicians and the Local Police, it was confirmed that those responsible had made it possible to “present itself as tourist accommodation through a digital platform”, as well as rent laundry or room cleaning services. They also found that the house was rented for around 500 euros per day.

Oppose “trespassing”. Although the City Council insists that the fine is in accordance with regional law, where the amount depends on the value of the house and the final amount is increased by interest and additional fees, some people note that this sanction is exemplary. The mayor insists that the aim is to “ensure legality” and specifically mentions “trespassing”.

Like other major destinations, Ibiza has seen its property market come under such pressure from tourism that there are neighbours and seasonal workers forced to live in caravans, and even property owners who have decided to move into one of these areas to rent out their own homes to tourists during the summer months.

Image | Flag (Flickr)

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