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For many international investors, buying a property in Spain is a dual-purpose investment: it serves as a personal holiday retreat and a source of rental income when vacant. The Spanish tourism sector is robust, and the demand for private holiday rentals remains high across the Costa Blanca, Costa del Sol, and the Balearic Islands.
However, the days of informal renting are long gone. Spanish authorities have tightened regulations significantly to ensure quality standards and control housing supply. Renting out your property without the appropriate Tourist License (Licencia Turística) can lead to severe fines ranging from €3,000 to over €600,000 depending on the region. Understanding the legal framework is not just recommended; it is mandatory for asset protection.
What is a Tourist License in Spain?
A tourist license is a mandatory government authorization that allows you to rent out your residential property for short-term stays (usually defined as less than two months). In legal terms, these properties are often referred to as Viviendas de Uso Turístico (VUT).
Once obtained, your property is assigned a registration number (e.g., VT-12345-A). This number must be visible in all advertising, including listings on platforms like Airbnb, Booking.com, and Idealista. Without this number, these platforms are legally required to remove your listing.
Regional Differences: Location is Everything
Spain consists of 17 autonomous regions, and each has the power to regulate tourism independently. This results in a patchwork of laws where a property in Alicante (Valencian Community) faces different requirements than one in Marbella (Andalusia) or Ibiza (Balearics).
The Valencian Community (Costa Blanca)
In the Valencian Community, the process has become more rigorous. Before applying for the license at the tourism registry, you must obtain a 'Certificate of Urban Compatibility' from the local Town Hall. This document confirms that the property's use for tourism is permitted under local zoning laws.
Andalusia (Costa del Sol)
Andalusia has historically been more flexible, but new decrees are empowering local town halls to set limits. Properties here must meet specific technical requirements regarding cooling and heating systems relative to the rental season.
Catalonia and the Balearics
These areas have the strictest regulations due to saturation. Barcelona has had a moratorium on new licenses for years. Similarly, in Mallorca and Ibiza, obtaining a new license for an apartment is extremely difficult, often restricted to detached villas in specific zones.
Standard Requirements for Approval
While regional nuances exist, most applications require the following core elements:
- First Occupation License (Licencia de Primera Ocupación): This proves the property is habitable and legal.
- Furnishing Standards: The property must be fully furnished, including cutlery, linens, and appliances.
- Emergency Contacts: You must provide a 24-hour contact number for tenants.
- Complaint Forms: Official complaint forms (Hojas de Reclamaciones) must be available.
- Safety Equipment: Fire extinguishers and a first aid kit are standard requirements.
The Community of Owners: A Critical Hurdle
If you are buying an apartment or a townhouse within a community (Urbanización), you must consult the Community of Owners statutes. Following changes to the Horizontal Property Act, communities can now vote to ban or restrict holiday rentals.
A vote of 3/5ths of the owners is usually required to prohibit future tourist rentals. Before purchasing a property with the intent to rent, always request the minutes from recent AGM meetings to check if such a restriction has been discussed or passed. If a ban is already registered in the Land Registry, you will not be able to obtain a license.
Tax Implications for International Owners
Obtaining the license is the administrative step; paying taxes is the ongoing financial obligation. As a non-resident property owner, you are subject to Non-Resident Income Tax (IRNR).
EU/EEA Citizens
If you are a tax resident in the EU, Norway, or Iceland, the tax rate on rental income is 19%. Crucially, you can deduct expenses directly related to the rental activity (electricity, water, community fees, IBI, insurance, and mortgage interest) proportional to the days the property was rented.
Non-EU Citizens (including UK)
Since Brexit, UK residents fall into this category. The tax rate is 24% on the gross rental income. Unfortunately, non-EU residents generally cannot deduct any expenses. This significantly impacts the net yield, so it is vital to factor this into your ROI calculations.
Civil Liability and Reporting
Once licensed, you have operational duties. You must report all guest data (passport details) to the Guardia Civil or National Police within 24 hours of arrival. Additionally, having specific Civil Liability Insurance for holiday rentals is usually mandatory or highly advisable to cover accidents that might occur to guests on your property.
Conclusion: Is it Worth the Effort?
While the bureaucracy may seem daunting, obtaining a tourist license significantly increases the value and liquidity of your Spanish property. It transforms a static asset into a revenue-generating business. However, the golden rule is to check the feasibility before you buy.
Always work with a reputable real estate agent and a 'gestor' or lawyer who specializes in local tourist law. They can verify if a property is eligible for a license or if the community has restrictions, ensuring your Spanish investment dream remains a profitable reality.
