Seasonal Rentals under Spain’s LAU: A Viable Alternative Amid Growing Tourist Rental

In recent years, several cities in Spain have implemented restrictions on tourist rentals due to their impact on the real estate market, pressure on local services, and the coexistence with permanent residents.

Cities like Barcelona, Madrid, Palma de Mallorca, Valencia, Seville, San Sebastián, and Málaga have introduced significant limitations, making it increasingly challenging for property owners to operate tourist rentals. These restrictions include stricter licensing requirements, prohibitions in certain areas, and controls on the density of tourist accommodations. Here’s a closer look at the specific measures in each city:

Barcelona

• Licensing Freeze: Barcelona has imposed a strict control on the issuance of new tourist rental licenses (HUT – Habitatges d’Ús Turístic). Since 2015, the city has suspended the granting of new licenses in most neighborhoods, particularly in high-demand areas like Ciutat Vella and Eixample.
• Ban on Room Rentals: In 2021, Barcelona banned the rental of rooms in primary residences for tourist purposes, further limiting the availability of tourist accommodations.
• Zoning Regulations: The city has established zones where the number of tourist apartments is strictly controlled, focusing on reducing the concentration in central neighborhoods.

Madrid

• Plan Especial de Hospedaje: Madrid has implemented the “Special Lodging Plan,” which requires tourist apartments rented for more than 90 days per year to have an independent entrance separate from residential units. This effectively limits the operation of tourist rentals in many traditional apartment buildings.
• Usage Restrictions: The plan also imposes restrictions on the use of properties, ensuring that tourist rentals do not disrupt residential communities. It includes technical requirements that are often difficult to meet in older buildings.
• Focus Areas: The regulations are particularly stringent in the historical center and other high-density tourist areas.

Palma de Mallorca

• Complete Ban on Apartment Rentals: In 2018, Palma de Mallorca became one of the first cities to ban the short-term rental of apartments (flats) to tourists across the entire city. This ban aims to reduce housing shortages for residents and alleviate the impact of tourism on the local community.
• Permitted Rentals: Only single-family homes (villas or chalets) are allowed to be rented to tourists, and even these are subject to strict conditions, such as location and licensing requirements.

Valencia

• Zoning Restrictions: Valencia has imposed specific restrictions in its historic center, prohibiting tourist rentals in residential buildings’ first floors. This is intended to preserve the residential character of the area.
• Licensing Requirements: Properties must obtain a special license to operate as tourist rentals, and new licenses are limited in areas with high tourist density.

Seville

• Saturation Zones: Seville has created “saturation zones” in the historic center and neighborhoods like Triana, where the number of tourist rentals is capped. New licenses in these areas are limited, and existing properties are closely monitored.
• Heritage Protection: Special measures are in place to protect the architectural and cultural heritage of the historic center, further restricting the conversion of residential properties into tourist accommodations.

San Sebastián

• Density Controls: San Sebastián has introduced density controls to limit the number of tourist rentals in the Old Town (Parte Vieja) and the city center. New licenses are rarely granted in these areas, and existing rentals face increased scrutiny.
• Community Impact: The city’s regulations are designed to minimize the impact on local residents, ensuring that tourist rentals do not overwhelm residential neighborhoods.

Málaga

• Central Area Restrictions: Málaga has implemented restrictions in its historic center and other tourist-heavy areas, requiring tourist rentals to obtain specific licenses. The city has also limited the issuance of new licenses to prevent the further spread of tourist accommodations.
• Focus on Residential Balance: The regulations aim to maintain a balance between tourist accommodations and residential housing, particularly in areas with high demand from both tourists and locals.

Given these restrictions, seasonal rentals under Spain’s Urban Leasing Act (LAU) have emerged as an attractive alternative for property owners. These rentals offer a more flexible and less regulated option compared to tourist rentals, while still allowing owners to generate income from their properties.

In Spain, the Ley de Arrendamientos Urbanos (LAU), or Urban Leasing Act, governs the rental of residential properties and commercial premises, including provisions for seasonal rentals.

 Seasonal rentals can serve as an alternative to tourist rentals, particularly for property owners who prefer to avoid the stricter regulations and obligations associated with tourist accommodations.

What is a Seasonal Rental under the LAU?

Seasonal rentals are outlined in Article 3 of the LAU, which defines residential leases as those intended to “satisfy the permanent housing needs of the tenant.” In contrast, seasonal rentals involve leasing a property for purposes other than establishing a permanent residence, such as stays for work, studies, or vacations, where the tenant does not establish the property as their habitual residence.

Characteristics of Seasonal Rentals

1. Duration: Seasonal rentals can have a set duration specified in the contract. Unlike tourist rentals, which are typically short-term (days or weeks), seasonal rentals can last for months or even up to a year, but without the tenant gaining rights as a permanent resident.
2. Contract: The seasonal rental contract must clearly state the temporary nature of the lease and the reason behind it (e.g., work, academic purposes, etc.). It is not subject to the mandatory extension rules that apply to leases of habitual residences.
3. Taxation: For tax purposes, seasonal rentals are considered residential leases, so the income generated must be declared as real estate capital income. Unlike tourist rentals, seasonal rentals are not subject to VAT unless additional services typical of the hospitality industry are provided.
4. Regulation and Normative: Unlike tourist rentals, which are regulated by regional and local laws with specific requirements (licenses, registration, etc.), seasonal rentals generally are not subject to these regulations, making them a simpler and less regulated option for property owners.

Advantages of Seasonal Rentals as an Alternative to Tourist Rentals

1. Less Regulation: Tourist rentals are heavily regulated in many autonomous communities, with requirements for registration, licenses, and compliance with specific rules. Seasonal rentals, governed by the LAU, are less restrictive.
2. Contractual Flexibility: Seasonal rental contracts allow for more flexible terms between the owner and the tenant regarding the duration and conditions of the lease, without the limitations of habitual residence contracts or the obligations of tourist rentals.
3. Stability: Since seasonal rentals are not short-term like tourist rentals, they offer more stability for the property owner, as tenants typically stay longer, reducing the turnover and costs associated with constantly finding new tenants.

Conclusion

Seasonal rentals under the LAU provide an attractive alternative to tourist rentals in Spain, particularly for property owners looking for a more stable and less regulated option. It is essential to ensure that the seasonal rental contract is well-drafted to reflect the temporary nature of the stay and to avoid potential legal conflicts.

Unlock New Income Opportunities with Seasonal Rentals!

With stricter regulations on tourist rentals in Spain, seasonal rentals under the LAU offer a flexible, less regulated alternative. Contact Costaluz Lawyers today to explore your options!