Legally Renting Out Your Property in Spain – Does Yours Fit The Bill?
One of the reasons so many people buy property in Spain is because of the great short-term rental potential. More than 85 million tourists visited the country in 2023 and each one of those needed somewhere to stay. Tourism has always been a huge part of Spain’s economy and accommodation plays a vital role.
But if you’ve recently bought property or are thinking about investing in Spain, you need to make sure you rent your property out legally. And in many regions of the country, it’s getting much more difficult.
So, what documentation do you need to rent out your property to visitors? What are the benefits and risks of doing so? And can anybody do it?
In this article, we’re going to delve into everything you need to know about short-term rentals in Spain and the potential fines and consequences you might face if you don’t adhere to the rules.
What Counts as Short-Term Rental in Spain?
Short-term rental in Spain counts as any rental contract for less than 3 months. It’s your usual tourist or Airbnb-style accommodation that people rent for holidays or short trips. In a short-term rental contract, there’s no indication that the person who is temporarily staying in the property has changed their living address.
Why Is Short-Term Rental in Spain So Attractive for Renters?
Renting properties is a great way to have a second income. Generally, short-term rentals are much more profitable than longer-term ones. How much tourists are willing to pay per night is a lot higher than someone who is living there. Of course, there are extra fees renters need to be aware of, such as different types of insurance and cleaning, but overall, short-term rentals generate more money.
Why Is Spain Cracking Down on Short-Term Rentals
Just like several European countries, the Spanish government is taking measures to reduce short-term rentals in many areas. Having an abundance of more expensive, short-term rental properties, especially in cities, drives up the cost for those actually living there. It’s difficult to find affordable and quality accommodation which leads to a rental crisis.
In many cities, such as Barcelona, it’s illegal to rent out short-term private rooms in accommodations and those wishing to rent out entire homes or apartments need the correct license…which is now very difficult to come by. In Valencia, too, the local government is making it much more difficult to get a tourist license in popular areas and is generally only giving them to properties on the ground floor.
When searching for your property in Spain, particularly in a city, you’ll notice that having a tourist license already issued to the property is a huge selling point.
Outside of larger cities, it’s usually easier to get the appropriate tourist license for your property, although it’s definitely worth checking before you invest.
What Is a Tourist License for Short-Term Rentals in Spain?
A tourist license is a legal document that allows you to legally rent out your property in Spain. Each region in the country has its own rules and you’ll need to check depending on where your property is, but there are generally two types of tourist licenses: Individual Tourist License and Collective Tourist License.
The Individual Tourist License applies to individual owners whereas the collective one is issued to companies that own or manage several properties.
The purpose of a tourist license in Spain is to ensure that properties meet certain hygienic, safety, and quality standards so that both the renter and the tenant are protected. They also ensure that a property is properly registered and that the owner is paying tax, including non-resident income tax, if applicable.
Do You Really Need a Tourist License to Rent Property in Spain?
Yes, it’s a legal requirement to obtain a tourist license if you want to rent your property out short term. Not having one and renting your property means you could face huge fines if you’re caught. In some areas, such as Catalunya, there are specific teams dedicated to finding properties that are being rented out short-term illegally.
Applying for a Tourist License in Spain
The application process can vary depending on the region you’re in in Spain. In general, however, the process can look something like this:
● Prepare your property. You need to ensure your property meets the required hygiene and safety standards and that it’s of a high enough quality for someone to live in.
● Register. In some areas, you may need to register your property with the local tourism agency.
● Obtain the correct certificates. You’ll need to apply for a habitability and energy efficiency certificate.
● Apply. Complete the tourist license application form (which you can get from your local tourism office) and make sure you’ve gathered all the necessary documentation. Each community is different, but you’ll probably need your ID and proof of payment too.
● Submit. Submit your application at the tourist office. Depending on where you are and the demand, it can take between 1 and 6 months.
Benefits of Having a Tourist License
Anyone who is thinking about renting out their property to holidaymakers really should get a tourist license. There are several reasons for this:
● It’s a legal requirement. By obtaining a tourist license, you ensure that you’re complying with the law and won’t be fined for not doing so.
● Peace of mind. Some people rent their property out under the table because it means they don’t have to pay tax on it. It can, however, result in huge fines – and we certainly know which we would rather pay.
● More bookings. Having a tourist license means your property is safe and of high quality. And holidaymakers know this. They’re much more likely to pay a little extra to stay in accommodation that is legal and registered rather than risk it. You’re also able to take advantage of advertising sites and have an account on Airbnb or Booking.
● Correct Insurance. If your property has a license, it means you can get proper rental insurance that will cover the costs because you’re legally renting your apartment or house.
What Are The Penalties for Not Having a Tourist License?
Again, the penalties for illegally renting out your property to tourists differ from one autonomous community to the next. Usually, fines range between €4,000 and €60,000, increasing significantly for repeat infractions. In Ibiza, for example, fines can get up to €111,000 for illegally renting out your property as the island officials crack down on tourist licenses.
Tourist License in Spain – A Necessity for Legally Renting Out Your Property
If you’d like to legally profit from renting out your property to short-term tenants or tourists, then it’s really important to obtain a tourist license. Without one, you run the risk of paying a huge fine. Regulations and the process of applying for the permit differ all over Spain, so you must find out the details for your region and comply with them. By renting out your property short term, you can enjoy the best of both worlds. You can legally get a supplementary income but still enjoy your property whenever you want to!
Note that this article is general and is shared as information. Property, tax, finance and other legal topics are personal and can vary not only from person to person but between the different regions of Spain. We recommend that you seek professional guidance if you need advice on matters covered in this article.