Renting out your Spanish property — licences, tax and realistic returns

Letting your Spanish home when you are not using it can cover the running costs and a good part of a mortgage — but only if the property is legally licensed. Spain has tightened short-let enforcement sharply, and unlicensed advertising now carries serious fines.

You need a tourist licence

Short-term holiday letting is regulated at regional level and each region runs its own register. Andalusia issues a VFT registration number; the Valencian Community issues a VT number; Murcia and the Balearics run equivalent schemes with their own conditions. The licence number must appear in every advert, including on Airbnb and Booking.com, and platforms are now obliged to verify it.

Before you buy with letting in mind

• Check the community statutes — since 2019 a three-fifths majority of owners can restrict or ban tourist letting in the building
• Check whether the municipality has capped or frozen new licences, as several city centres have
• Confirm the property meets the technical requirements: certificate of occupancy, air conditioning or heating, first-aid kit, complaint forms, guest information
• Verify whether an existing licence transfers with the sale — in some regions it does not transfer automatically

Tax on rental income

EU and EEA resident owners pay 19% on net rental income and may deduct proportionate expenses — community fees, IBI, insurance, utilities, management, repairs and depreciation. Non-EU owners, including UK residents post-Brexit, pay 24% on gross income with no deductions, which is a substantial difference. Returns are filed quarterly on Modelo 210.

What management actually costs

• Full holiday-let management including bookings, keys, cleaning and guest support: typically 20–30% of gross rental income
• Booking platform commission where you self-manage: 3–17%
• Linen, consumables and mid-stay cleaning: budget €40–€70 per changeover
• Long-term unfurnished letting is cheaper to run — usually 8–12% agency fee — but yields less

Realistic yields

On the Costa Blanca and Costa Cálida, a well-located licensed two-bedroom apartment near the beach commonly returns 5–7% gross and roughly 3.5–5% net after management, tax and community fees. Costa del Sol properties achieve higher nightly rates and a longer season but on a larger capital base, so net returns typically land between 3% and 5%. Any projection above 8% net deserves scepticism and a look at the actual booking calendar.

Turnkey investment developments

Some new developments are sold with a tourist licence already in place and an on-site rental management contract, which removes most of the setup risk for overseas owners. If income is your main objective, prioritise those over a resale you would have to license yourself.