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Short-Term vs Long-Term Rentals — Understanding the Difference

Spanish law draws a clear distinction between the two, and the regulatory burden differs significantly.

Tourist Licence Requirements — Regional Differences

Spain's 17 autonomous communities each set their own rules for tourist rentals. Here is what applies in our key regions.

Andalusia (Costa del Sol, Costa Almería)

• You need a VUT (Vivienda con Fines Turísticos) registration through the Junta de Andalucía's tourism registry
• The property must meet minimum standards: air conditioning, first aid kit, tourist information, complaint forms
• Community approval: If the property is in a community of owners, the community may restrict or prohibit tourist lets. A 3/5 majority vote can ban them
• Registration number must be displayed on all advertising
• The Junta has been increasingly strict on unlicensed rentals, with fines up to €150,000

Valencia Region (Costa Blanca)

• Tourist accommodation is regulated under Decree 10/2021
• You need a licence from the regional tourism department and must register on the Valencian Tourism Registry
• Properties must have a certificado de compatibilidad urbanística from the local town hall
• Many municipalities on the Costa Blanca have introduced moratoriums or zoning restrictions on new tourist licences
• Energy certificate and insurance are mandatory

Murcia Region (Costa Cálida)

• Murcia's regulations are generally more straightforward and investor-friendly
• Registration with the regional tourism department is required
• The region actively promotes tourism development, making the licensing process relatively smooth
• Fewer zoning restrictions compared to the more saturated Costa Blanca municipalities

Rental Yields — Where to Invest for the Best Returns

Spain's national average gross yield sits at approximately 6.3% in 2026 — well above much of Western Europe. But the regional variation is substantial.

Tax Obligations for Landlords

Spanish Tax Residents

• Rental income taxed at progressive rates (19%–47%)
• Deductible expenses: mortgage interest, IBI, insurance, maintenance, management fees, depreciation
• 60% deduction on net rental income for long-term residential rentals

EU/EEA Non-Residents

• Flat rate of 19% on net rental income
• Can deduct directly related expenses
• File quarterly using Modelo 210

Non-EU Non-Residents

• Flat rate of 24% on gross rental income (no expense deductions)
• File quarterly using Modelo 210

The LAU — Spain's Rental Law for Long-Term Lets

• Minimum contract duration: 5 years (individual landlords) or 7 years (corporate landlords)
• Rent increases: Capped during the contract period by the INE reference index
• Security deposit: Mandatory 1 month's rent
• Eviction: Possible for non-payment, but typically 6–12 months through courts
• Landlord's right to recover: After the first year, with 2 months' notice and genuine need

Airbnb and Platform Regulations

• Registration number requirement: All platforms must display the property's tourist licence number
• Data sharing: Platforms share booking data with Spanish tax authorities
• Municipal restrictions: Several municipalities have imposed caps or bans on new tourist licences
• Guest registration: All guests must be registered with police within 24 hours of arrival

Property Management — DIY vs Professional

Self-management is feasible if you live locally. For non-resident owners, professional management is recommended:

• Short-term rental management: 15%–25% of gross rental income
• Long-term rental management: 8%–12% of monthly rent

Practical Tips for Maximising Rental Income

1. Invest in quality photography — professional photos increase booking rates by 20–40%
2. Price dynamically — use tools like Beyond Pricing or PriceLabs
3. Target the shoulder seasons — Spain's coast attracts visitors March to November
4. Furnish for guests — neutral décor, quality mattresses, fast WiFi, good air conditioning
5. Obtain your tourist licence early — a property with a licence is worth significantly more
6. Consider a hybrid strategy — short-term in summer, medium-term to winter-sun retirees

Rental Investment Checklist