Tourist Rental: Licence, Homeowners' Community and Tax Compliance

The regulation of tourist rentals in Spain combines regional tourism law, horizontal property law, local planning rules and national tax law into a complex framework that varies significantly by autonomous community and municipality. Every owner letting a property for tourist use must hold the regional licence or authorisation required by their community, comply with the technical requirements of the property, meet tax registration obligations (IAE heading 685) and correctly declare rental income in their personal income tax return. Since Law 12/2023 modified Article 17.12 of the Horizontal Property Act (LPH — Ley de Propiedad Horizontal), homeowners' communities in any building can vote to limit or condition tourist activity by a three-fifths majority of owners and shares — adding a layer of legal risk that affects both existing and prospective tourist rental operators.

Legal framework for tourist rentals in Spain

Tourist rental regulation in Spain operates at three levels: regional (autonomous community tourism laws setting licence requirements), local (municipal planning rules restricting tourist use in certain zones) and national (the Horizontal Property Act, VAT law, personal income tax law and Form 179 information reporting obligations).

The regional framework is the most variable: Catalonia, the Balearic Islands, Madrid, Andalusia and the Valencian Community each have distinct requirements for tourist property registration, minimum technical standards and restrictions on tourist activity in certain zones. Several communities have introduced moratoriums on new tourist licences in their most saturated tourist areas.

Homeowners’ community and tourist rentals: Art. 17.12 LPH

Law 12/2023 introduced an important amendment to the Horizontal Property Act that significantly affects tourist rental operators in multi-property buildings. A three-fifths majority of owners (in both number and participation shares) can now vote to limit or condition tourist activity — for example, restricting the number of simultaneous guest occupations, prohibiting rental through online platforms, or imposing a community charge increase of up to 20% on tourist-active properties. Only unanimity can result in a total prohibition.

For owners already holding a tourist licence when such a resolution is passed, the resolution does not extinguish the licence, but subsequent renewals or new registrations may be affected. For prospective buyers, it is essential to verify the community’s position before acquisition.

VAT and tourist rentals: the key distinction

The VAT treatment of tourist rentals depends on the services provided alongside the accommodation. Letting alone is VAT-exempt. When the owner provides services characteristic of the hotel industry — periodic cleaning during the stay, laundry, catering, permanent reception, luggage storage — the activity becomes subject to VAT at the reduced 10% rate. This distinction is frequently contested in AEAT inspections, and the line between exempt and taxable provision requires careful analysis of the specific services offered.

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