Letting to tourists is a popular way to make your Spanish property pay for itself. Max out holiday rentals in Spain and you should even be left with spending money for your own trips there. Sounds like a doddle and actually, it was a decade or so ago.
These days though, tightening legislation fuelled by high foreign ownership and shifting attitudes mean care should be taken when choosing a property for short-term holiday rentals in Spain.
It’s still perfectly achievable and there are experienced people who can help you. But before you start house-hunting in the Costa del Sol, Costa Blanca or any other sunny Costa, here is a lowdown of the rules and how to choose your Spanish holiday let wisely.
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Tourist licence for holiday rentals in Spain
A key legal requirement for offering your Spanish property for holiday rentals – also referred to as short-term rentals – is a tourist licence. These are issued and registered by the relevant regional government with approval from the local town hall. They can be applied for online and are renewable every five years.
What defines a short-term rental varies by region – there are 17 autonomous regions in Spain. As a rule, it applies to properties let to holidaymakers for tourism purposes, typically for a week or two at a time. Different regions set their own limits on the number of nights guests can occupy the property in any one stay.
Differences between Andalusia and Valencia
In Andalusia, home to the Costa del Sol, any property rented for up to 60 days inclusive by the same guest requires a tourist licence (known as a ‘VFT’). In the Valencian Community, which includes the Costa Blanca, licences (referred to a ‘VUT’) allow you to rent to the same guest for a maximum of nine nights. Stays of 10 or more nights are treated as seasonal rentals.
There is another important difference between the two regions. In Andalusia, a tourist licence transfers upon sale to the property’s new owner. In the Valencian Community, a tourist licence does not transfer and a new owner must make their own application.
Paperwork and application for tourist licence
Required documentation for a tourist licence can also vary slightly by region. Typically, expect to need to show your property’s title deeds, cadastral certificate, habitation certificate, licence of first occupation, your NIE, as well as obtain a compatibility report and approval from the community of owners (if applicable).
Your property’s licence has a unique registration number, which must be displayed with any advertisements or portal listings for your property. Your property will also need to meet a minimum standard and level of health and safety.
Registering with the police for holiday rentals
Owners of holiday lets in Spain also have reporting duties to the local constabulary. All holders of tourist licences are required by law to register with the local police. Each paying guest over the age of 16 that stays at your property should be logged with proof of ID with the police.
Unpopular national registry for holiday rentals scrapped!
In addition to registering for a tourist licence, a new law introduced in July 2025 made it mandatory for holiday let owners to be recorded on a national registry. Inevitably, this added another level of cumbersome paperwork and gave rise to groans.
Several regional governments objected, arguing the central government had overstepped its powers. Fortunately, in May this year the national registry was scrapped after Spain’s Supreme Court ruled it wasn’t necessary when similar ones already existed on a regional level. One less thing to think about!
More powers to communities of owners
Choosing the right complex or urbanisation is also vital for finding a viable holiday let in Spain. Legislation introduced in April last year gives increased powers to the thousands of communities of property-owners up and down the Spanish Costas. A community of owners is a legal entity, headed by an elected president, that represents all the owners within the same community. It decides the rules for conduct within it and organises fees to cover any communal areas.
The new law means that every community of owners has the right to decide whether short-term holiday lets are permitted within the community. Where they are allowed, often new owners will need to get approval and show proof of this to obtain their licence. Communities also have the power to set their own rental conditions, such as minimum number of nights per guest and requesting deposits. Not adhering to the rules risk being forced to terminate rentals immediately and even legal action.
Town halls in the Costa del Sol and Costa Blanca
While regional government administer licensing, the distribution of them is also controlled on a more local level. Individual municipalities have the power to suspend or restrict new tourist licences. Typically, this happens in urban or highly developed areas said to be affected by overtourism.
In the Costa del Sol, since late 2025 the towns halls in Malaga and Manilva have imposed three-year moratoriums on new licences, although the latter excludes the Pueblo area. Meanwhile, Mijas and Fuengirola have tightened conditions for obtaining a licence.
In the Costa Blanca, town halls in Benidorm, Calpe, Altea and Alicante city use zoning to suspend new licences in areas deemed saturated with tourist rentals. Meanwhile, Valencia city has frozen new licences in some central districts, including Ciutat Vella, Russafa and El Cabanyal. New licences are being issued only for purpose-built tourist properties in compliant zones within the city.
Value of agencies for holiday rentals in Spain
All of the above highlight the importance of working with a reputable estate agent with good local knowledge when buying property in any of the Spanish Costas. It vital to tell them you would like a property that will be eligible for renting to holidaymakers.
This way they should only show you properties that have been or would be granted a tourist licence and meet the town hall’s compatibility requirements. They would also know and avoid those districts, urbanisations or communities where short-term lets are not permitted or frozen.
Many estate agents also offer property management services or can refer you to a trusted rental agency. Using an agency can save time and hassle, as their teams are experienced in navigating the letting market and regulation. Let them coordinate all of the required paperwork, get your property up to the required standard and apply for a tourist licence successfully on your behalf. Makes life a lot easier!
Tax obligations with holiday rentals in Spain
As a rule, any rental income earned from your Spanish property should be declared at source in Spain. Spanish tax returns must be filed during January for income earned the preceding calendar year (different to the UK’s April-April tax year).
Non-resident foreigners must use tax form ‘Modelo 210‘. It is advisable to use a local gestor or accountant to do this for you – your rental or estate agent can likely refer you to someone.
Currently, Spain taxes non-EU citizens 24% on rental income. A higher rate than the 19% levied on EU and EEA citizens, this disparity has recently been challenged successfully in the Spanish Courts. EU and EEA citizens also benefit from deductible expenses for running their property, while non-EU citizens currently do not. Depending on your tax status, Spain’s double tax treaties mean your rental income should not be taxed again in your country of residence.
What to do next?
Ready to buy your property in Spain, whether for rentals or not, or simply interested in getting more information? Get in touch with the team at Your Overseas Home. One of our specialists will chat through your plans and connect you with an affiliated specialist, including estate agents, legal, currency transfer and tax experts.
Note, information in this article is provided for general informational purposes only and does not constitute formal advice. Always seek professional advice before making decisions relating to buying property, rental law and tax matters.
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