Holiday Rental Laws in Spain – Explaining The Latest Changes

Raymundo Larraín Nesbitt, March, 8. 2015

Lawyer Raymundo Larraín Nesbitt explains the changes in landlord rental allowances (tax relief) in Spain spurred by the key ruling of the European Court of Justice (ECJ) from last 3rd of September 2014 (Case C-127/12), as well as the new holiday rental laws in Spain.

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of March 2015





I am going to split my article in two parts.

The first part deals with the batch of regional holiday rental laws that have swept the land becoming an ubiquitous requirement. Any landlord wishing to rent privately their Spanish property for a period exceeding one month in a year falls under the remit of this new regulation.

The second part deals with the changes in taxation related to rental laws brought about by European Legislation; specifically regarding applicable deductions and allowances at both state and regional level (Autonomous Communities).


I. Holiday Rental Laws



Over the past two years almost every Autonomous Community in Spain has zealously ruled on what is known as ‘viviendas de uso turístico‘ or private holiday rentals. These are laws which seek to regulate short-term touristic lets from private individuals and bring them in line with minimum (hotel) lodging standards. The laws in all Autonomous Communities are fairly similar so a couple of common denominators can be extrapolated. A touristic let is generally defined by two elements:

• A dwelling that is offered on a short-term rent to tourists employing the media (internet, newspapers, magazines, travel agencies etc.). There is great diversity in the offered lodging and may range from a letting a whole detached villa in a luxurious seaside resort to renting a single room in a Bed & Breakfast. Some communities expressly bar the possibility of renting a single room.
• The property is let out one or more times a year for a period that normally exceeds one month i.e. summer lets or winter lets in ski resorts. But they can also be rented for days, weeks or months.

Excluded Properties

In general, properties that meet the following criteria would be excluded from this regulation and would fall under Spain’s Tenancy Act (Ley 29/1994, de Arrendamientos Urbanos).

• Property that is lent to friends/family without any compensation (monetary or otherwise).
• Property that is let to the same person/s for a period that exceeds three months in a year.
• Rural property which falls under its own regulation.
• Landlords who own three or more properties in the same development or ‘urbanización’ fall under a different regulation: ‘apartamentos turísticos’ (not to be confused with ‘viviendas de uso turístico’ which is the topic of this article).
• No more than fifteen people can live in the same property.


Touristic lets are generally obliged to meet the following criteria which by no means is a closed list (I only highlight the main ones). For an accurate list you should check the touristic rental law of the Autonomous Community where your property is located. Please read further below a region-by-region list of approved holiday rental laws.

EDIT October 2016: For the avoidance of doubt, as some people are reportedly getting confused, what follows is a generalisation. I have taken the draft holiday rental law of Andalusia as template to extrapolate generalities or common denominators to be expected from all regions, as regional holiday rental laws in Spain are in fact fairly similar with small variations. Touristic lets are generally obliged to meet certain criteria, though it varies by region, I list the main ones for Andalucia below. If, for example, you are interested in Murcia region, please check the local regional requirements of Murcia´s holiday rental law for the minutiae (I do not list them below!).

• The property must have attained what is known as a Licence of First Occupation (also known as First Occupancy Licence, Habitation Certificate, Habitation Licence, Licencia de Primera Ocupación, Cédula de Primera Habitabilidad, Cédula de Habitabilidad or Cédula de Ocupación).
• Full compliance with planning, health and safety, security and disabled access amongst other laws; both at a national and regional level.
• Rooms must be ventilated and have blinds or shutters.
• Free internet service available in every room.
• Air conditioning unit in every room (as a fixed fixture, not a portable device).
• When properties are let during the winter season (October through to April) a heater must be made available in every room that is let (as a fixed fixture, not a portable device).
• First aid kit and fire extinguisher.
• Cleaning service at the start of new lodgings.
• Rooms must have adequate furniture.
• Complaints book.
• Touristic guides, maps of the surroundings (books).


My advice is that landlords would do well to seek tailored legal advice and determine if their property complies fully with all laws. Failure to comply may lead to stiff fines. Fines range from hundreds to over a dozen thousand pounds.

E.g. landlord has not applied for a touristic letting licence from his town hall or the property is unregistered at the special register for touristic properties.

E.g. landlord is reported because he does not have a ramp built for disabled access.

E.g. landlord does not have a wi-fi connection set up.

E.g. landlord has not attained a Licence of First Occupation from local planning authorities.

My Take on Touristic Rental Laws

I had already written an admonitory article back in 2013 (New Measures to Bolster Spain’s Ailing Rental Market) on the worrisome trend the Autonomous Communities were following on enacting their own laws to regulate touristic lettings on the wake of Law 4/2013 which (clumsily) left the door ajar to them.

I feel compelled to excoriate these touristic rental laws which are a bad idea as in the best of cases they impose a new set of obligations (and associated expenses) on landlords which severely impact their rental income and at worst require a rental licence is attained under threat of hefty fines on non-compliance. In some cases individuals will not be even allowed to rent as these laws (artificially) stifle competition. At no time should public administrations limit the rights and usage of private homeowners to rent out their properties. It is a direct attack on private property which in my eyes is a red line that should not be crossed.

This unnecessary batch of new regional laws only make the prospect of renting for small-time landlords – which are legion – all the more difficult (acting almost as a deterrent) whilst at the same time make life easier on large powerful hotel groups as competition is removed. In other words, these regional laws thwart competition in a free market economy benefiting large corporations at the expense of the little people who make a meagre supplementary income by letting property out. The field is uneven.

Two years on, the majority of the seventeen Autonomous Communities which make Spain have jumped on the band wagon passing legislation on touristic lets. Landlords would do well to seek legal advice on whether their property complies fully with the new spate of regional regulation. Some of these laws (i.e. Balears) require that local authorities issue a ‘rental licence’ before you are allowed to let and impose hefty fines on non-compliance. The obligations are (formally) geared to set a homogenous minimum standard to rent property and in some cases require a substantial upfront investment which may negate altogether the very idea of letting as the numbers may not stack up in every case.

If you examine the new requirements landlords are expected to meet they resemble closely those we have come to expect from the hotel industry (i.e. free wi-fi, A/C units, professional cleaning service etc.). It stands to reason you cannot possibly demand from private individuals the same blue-ribbon lodging standards and services as those offered by financially powerful multinational hotel groups. It’s daft.

Private individuals in many cases will not have the financial means to acquire all the ‘minimum’ gadgets, let alone face the grim prospect of being fined dozens of thousands of pounds on non-compliance. If these regional laws are enforced harshly by authorities it will leave the burgeoning business of private home rentals to affluent people or groups; the only ones with the means to keep up with the frantic pace set out by regional authorities. Borrowing a quote from Thomas Jefferson — “There is nothing more unequal than the equal treatment of unequal people”.

Again the cynic in me asks cui bono? Who stands to gain more from such changes in home rental regulation? Definitely not landlords (or tenants for that matter). The powerful hotel industry does. Property has been let to tourists for decades without major hindrances (in fact Spain’s whole unbalanced and undiversified economy hinges on tourism and construction; they account for well over 20% of its GDP). Adding red tape is unnecessary and redundant.

Why now? Because after a huge property boom that lasted almost a decade the properties now on offer have trebled whilst demand remains stable. This has in turn dramatically increased competition for hotel groups which has severely dented their bottom line (and miffed their shareholders). They have relentlessly lobbied over the last years to curtail what they deem as ‘unfair competition’.

Competition is always good for the broad economy as it drives prices down and improves services not to mention job creation at a time when the economic recovery remains anemic (in Spain). Competition at its heart is what keeps people and companies on their toes. Remove competition and companies become complacent, services deteriorate and prices soar. In a competitive market bad companies are weeded out by consumers through natural selection. More so in the days of internet with professional bloggers that take delight on rating hotel accommodations for the benefit of all us punters. This is not about accommodating lofty ideals, it’s about being pragmatic in today’s tough world. A healthy robust economy demands competition to flourish and create jobs, period. Remember my words next time you have to pay for a pricey (hotel) lodging in Barcelona or Madrid.

You can find an insightful article from American journalist Kevin Brass (New York Times, Wall Street Journal) with poignant comments on the matter of (Spanish) administrations encroaching on private short-term lettings (for the benefit of the hotel lobby) from the 8th October 2014: Opinion: Attacks on Short-Term Rentals Are All Hype.

EDIT 9th of April 2015: Spain’s Competition and Market’s Authority (CNMC) has taken legal action against Madrid’s Holiday Rental Law on grounds of “anti-competitive practices that restrict consumer’s ability to choose (a service)”. More on this: Five-Day Holiday Rental Limit Challenged in Madrid.


Region-by-region List of Approved Holiday Rental Laws


Moving on from my rant, I have compiled a comprehensive list of the Autonomous Communities in Spain with approved touristic rental laws at the time of this article’s printing. The most high-profile absentee is Andalusia’s draft law which has sparked hot controversy. Regardless, I have included below a link to its draft bill out of interest to anyone.

EDIT 03/02/16: the autonomous region of Andalusia approved its Holiday Rental Law in February 2016. More on this matter in my article: Andalusia’s Holiday Rental Decree.

Holiday rental laws are here to stay. It is a landlord’s duty to acquaint himself and comply with the regulation of his own Autonomous Community. Some aspects of the below-listed regulations vary widely so it is highly advised professional advice is sought beforehand to be on the right side of the law. In some instances, such as Balears, holiday rental licences are fairly restrictive and hard to attain.

• Andalusia: Approved. Andalusia’s Holiday Rental Law explained in English. The new approved law: Decreto 28/2016, de 2 de febrero, de las viviendas con fines turísticos. Fines for non-compliance range between €2,000 to €150,000. Another important law which currently applies is Law 13/2011 of Tourism in Andalusia.
• Aragón: Decreto 167/2013, de 22 de octubre, del Gobierno de Aragón, por el que se aprueba el Reglamento de los apartamentos turísticos en Aragón
• Asturias: Updated regulation pending. Decreto 60/1986, de 30 de abril, sobre ordenación de los apartamentos turísticos and Decreto 34/2003, de 30 de abril, de viviendas vacacionales.
• Balears: More information in my updated article (September 2017) New Balearics Holiday Rental LawRequire a holiday rental licence for villas and townhouses; apartments are excluded. Decreto Ley 6/2013, de 29 de noviembre, por el que se modifica el artículo 52 de la Ley 8/2012, de 19 de julio, del Turismo de las Illes Balears
• Basque Country: Decreto 198/2013, de 16 de abril, por el que se regulan los apartamentos turísticos
• Canary Islands: Fairly restrictive. Decreto 142/2010, de 4 de octubre, por el que se aprueba el Reglamento de la Actividad Turística de Alojamiento and the new Reglamento de las viviendas vacacionales de la Comunidad Autónoma de Canarias. Read this post on the new holiday rental law for the Canary Islands.
• Cantabria: Decreto 19/2014, de 13 de marzo, por el que se modifica el Decreto 82/2010, de 25 de noviembre, por el que se regulan los establecimiento de alojamiento turístico extrahotelero en el ámbito de la Comunidad Autónoma de Cantabria
• Castilla-La Mancha: Unapproved.
• Castilla y León: Unapproved, only for rural tourism Decreto 75/2013, de 28 de noviembre, por el que se regulan los establecimientos de alojamiento de turismo rural en la Comunidad de Castilla y León
• Catalonia: Barcelona city is restrictive with new permits. Decreto 159/2012, de 20 de noviembre, de establecimientos de alojamiento turístico y de viviendas de uso turístico
• Extremadura: Unapproved / updated regulation pending. Decreto 182/2012, de 7 de septiembre, de ordenación y clasificación de apartamentos turísticos en Extremadura
• Galicia: For detached homes only; room rentals are banned Decreto 52/2011, de 24 de marzo, por el que se establece la ordenación de apartamentos y viviendas turísticas
• La Rioja: Unapproved.
• Madrid: Stays of less than five days and single room rentals are banned Decreto 79/2014, de 10 de julio, por el que se regulan los apartamentos turísticos y las viviendas de uso turístico de la Comunidad de Madrid
• Murcia: Updated regulation pending. Existing regulation is from 2005. Decreto 75/2005, de 24 de junio, por el que se regulan los apartamentos turísticos y alojamientos vacacionales
• Navarre: Updated regulation pending. Decreto Foral 230/2011, de 26 de octubre, por el que se aprueba el Reglamento de Ordenación de los Apartamentos Turísticos en la Comunidad Foral de Navarra
• Valencian Community: Decreto 92/2009, de 3 de julio. Reglamento de Alojamientos Turísticos y empresas gestoras de la Comunitat Valenciana.


II. Changes in Taxation Brought About by European Legislation


Landlord Rental Allowances

Following up on last month’s article regarding the ECJ’s landmark ruling of last 3rd of September 2014, which put an end to discrimination between residents and non-residents on taxation matters, these changes also affect rental laws.

Law 26/2014 of the 27th of November amends both the Personal Income Tax Act (I.R.P.F.) and the Non-Resident Income Tax Act (I.R.N.R.). These changes came into force on the 1st of January 2015. I had already referred to these changes in December’s and February’s articles: Taxes on Selling Spanish Property and Changes To Spain’s Inheritance And Gift Tax Law.

Law 26/2014 adapts and transposes the decision taken by the ECJ amending internal Spanish national laws. It brings to an end (fiscal) discrimination between residents and non-residents in a wide array of matters; for this article’s sake specifically on rental matters. EU-residents are now treated on par with Spanish residents on taxation matters relating to allowances and deductions. This translates into paying fewer taxes (as non-residents now qualify for deductions and tax allowances which were previously barred to them as these were earmarked for Spanish residents alone).

For the purpose of this article, when I make reference to ‘non-tax residents’ I will always be referring to citizens which are either tax resident in another Member State of the European Union or else in the European Economic Area (E.E.A.). Just to clarify, the below-listed changes do not benefit tax residents outside of the EU or EEA.

Rental Allowances – Situation Prior to the ECJs’ Ruling

Non-resident rental allowances were virtually non-existent prior to this ruling for private individuals. There were few instances in which you could offset rental taxes as they required you employed someone full time and had a permanent establishment in Spain. Obviously of little practicality which was not an option for the vast majority of non-resident landlords.

Post-ECJs’ Ruling – Changes to Spain’s Rental Laws

The ECJ’s key ruling of 3rd of September 2014 marks the inflection point which puts an end to (fiscal) discrimination between residents and non-residents. It forces Spain to amend its internal laws and accommodate the European principles on which the EU is grounded on. The significance of the ECJ’s ruling is that it has opened up the opportunity for non-residents to apply as from the 1st of January 2015 to the below-listed state tax allowances and deductions which were previously reserved only to Spanish residents. In addition, non-residents may also benefit from those set by the Autonomous Communities where the property is located which have a penchant of being more generous than state law.

When taxpayers are resident in another European Union Member State, or in the E.E.A., the expenses described in the Law on Personal Income Tax (IRPF) can be deducted when calculating the taxable base, provided that proof is supplied that these expenses are directly related to income earned in Spain and have a direct economic connection that is inseparable from the activity carried out in Spain. When expenses are deducted, a certificate of tax residency in the corresponding State issued by the tax authorities of that State must accompany the tax return.

Landlord’s State Allowances and Deductions for Private Home Rental

The following state deductions and allowances can be offset or deducted mitigating the tax bill without prejudice of additional compatible allowances set out by the Autonomous Community contingent on where the property is located. Please take legal advice on the latter for your particular case as for economy of space I will not be listing them below.

The above translates into higher returns for a landlord. Meaning non-resident landlords stand to profit from higher net yields on letting in Spain as from 2015.

Article 24.6 of the Non-Resident Income Tax Act (I.R.N.R.) makes a direct renvoi on these to art. 23 of the Personal Income Tax Act (I.R.P.F.).

1.- Physical Persons

A. Rental Tax Relief / Deductible Expenses (Art. 23 I.R.P.F.)

Proof must be supplied that the following expenses are directly related to income earned in Spain and have a direct economic connection that is inseparable from the activity carried out in Spain.

Interests arising from a loan to buy the property (i.e. mortgage).
Local taxes and administrative charges and surcharges that impact on the rental income or else on the property itself (i.e. IBI tax, rubbish collection tax).
Expenses arising from formalising rental contracts such as lets or sublets (i.e. Notary and/or Land Registry fees); legal defence (i.e. hiring a lawyer for tenant eviction purposes).
Maintenance costs may be offset; refurbishment expenses are excluded.

Examples of maintenance costs (deductible): repainting over flaky paint, plumbing, debugging, tennis court green mold cleaning, swimming pool pump replacement, annual lift maintenance, leaking faucet.

Examples of refurbishment expenses (non-deductible): glass curtains, double-glazed windows, parquet, marble floor, extension to property (outbuilding), tennis court, swimming pool, private lift.

Notwithstanding the above, refurbishment expenses may be claimed on selling the property by offsetting them against your Capital Gains Tax liability. Please read my article: Taxes on Selling Spanish Property.

Home insurance premiums (theft, fire, civil liability etc.). Please read my articles Home Insurance in Spain, Community of Owners’ Insurance Policies and How to Cancel your Home Insurance Policy in Spain. However claims arising from events that diminish the value of a dwelling are non-deductible i.e. fire
Utility invoices (electricity, water, gas and landline).
Concierge, gardening & security services (i.e. gated communities).
Home depreciation and amortization. The calculation is 3% on the highest value of the following two: home buying costs or cadastral value; the value of the land is excluded.

B. Allowances

• The 100% tax allowance on letting to under thirty-year-olds is supressed as from the 1st of January 2015. The allowance is now 60% on the net income regardless of a tenant’s age.

2.- Legal Persons

Those set out by the Company’s Income Act (Law 27/2014, of 27th of November).

Changes to Spain’s Rental Laws – Conclusion

Any change that implies paying fewer taxes is always welcome. The less Administrations meddle in private affairs and businesses, all the better.

If you own property in Spain and plan to rent it out for a period exceeding one month in a year I strongly recommend you seek legal advice to comply with the obligations set forth by your Autonomous Community.

Freedom is the right to question and change the established way of doing things” – Ronald Reagan.

American 40th US President (1981 – 1989). He steadfastly contributed to the Cold War victory which led to the fall of the Berlin Wall and the collapse of the U.S.S.R.


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