The Future of Holiday Lets in Spain: Challenges and Viable Alternatives

Over the past decade, all of Spain’s autonomous communities have introduced regulations to formalise and control the holiday lets sector. The intention was to ensure better oversight, improve transparency, and address issues such as taxation and quality standards. However, an unexpected consequence of this regulatory push has been a significant increase in the number of property owners opting to rent out their homes as holiday lets. Additionally, many individuals have purchased properties in Spain exclusively for this purpose, seeing it as a profitable investment opportunity.

This surge in holiday rental properties has led to various unintended challenges. Many Spanish residents have expressed growing concern over the shortage of long-term rental properties, as more homes are diverted to short-term holiday lets. The increased demand has also contributed to rising property prices, making homeownership less accessible for local residents. Furthermore, issues of cohabitation have arisen in certain areas, with complaints of noise, overcrowding, and the changing character of neighbourhoods due to the influx of short-term visitors. As a result, there has been a general shift in public opinion against holiday lets, with some blaming them for these socio-economic challenges.

New Regulations and Their Impact

In response, various authorities at different levels have begun implementing stricter regulations to curb the expansion of holiday lettings. These measures include:

Autonomous Community Laws: Many regional governments have tightened their regulations, imposing stricter licensing requirements, limiting the number of holiday rental licences issued, and increasing penalties for non-compliance.
Municipal Regulations: Town halls in popular tourist destinations have introduced additional restrictions. These include zoning laws that prohibit holiday lets in certain areas (Malaga, for example), capping the number of properties that can be used for short-term rentals in each district (Seville), and requiring specific conditions, such as having direct acces from the street (Fuengirola, for example).
Community of Property Owners’ Authorisation: One of the most impactful recent changes, effective from the 3rd of April, is the requirement for specific authorisation from the community of property owners to operate a holiday let. This new rule has caused hesitation among potential investors, particularly those whose sole purpose for purchasing property in Spain was for holiday lettings. Without approval from the property community, holiday letting is no longer a guaranteed option. You can read more about this clicking here.
Judicial Rulings: Spanish courts have also played a role in shaping the future of the sector, upholding new restrictions and rejecting challenges from property owners and rental platforms seeking to overturn these regulations.

Alternatives to Holiday Lets

Despite these new restrictions, investing in property in Spain remains an excellent opportunity. There are viable alternatives to holiday lettings, including:

Long-Term Rentals: Renting out a property on a long-term basis can provide a stable and predictable source of income. While concerns about non-payment and lengthy eviction processes exist, various companies now guarantee rental income. These companies carefully select tenants and assume the risk of non-payment, ensuring landlords receive their rent without disruptions. Click here for more information.
Mid-Term Rentals: Another alternative is mid-term rentals, where properties are leased for periods longer than two months (the minimum period in Andalusia to avoid classification as a holiday rental). This option is particularly attractive to professionals, digital nomads, and expatriates who need temporary accommodation. Mid-term rentals provide a balance between the high returns of short-term lets and the stability of long-term rentals while often requiring fewer regulatory hurdles.

Conclusion

The holiday lets landscape in Spain is evolving rapidly, and it is essential for property owners and investors to stay informed about the latest legal developments. While the new restrictions present challenges, alternative rental models provide excellent opportunities for those looking to generate income from their Spanish property.

If you require guidance on Spanish property law or rental regulations, our legal team is here to assist you. Contact us today for expert advice tailored to your specific needs.