Why a holiday home that pays for itself is harder to buy than it used to be on the Costa Blanca and Costa Cálida, and the quiet route that smart buyers are taking instead.
For years the plan was simple. Buy a place in the sun, enjoy it through the summer, and let it out to holidaymakers the rest of the year to help cover the costs. Thousands of British and Irish families have done exactly that, and most have never regretted it.
What has changed is not the appeal of the coast or the demand from holidaymakers. It is the paperwork behind the rental income. Over the past two years, both the Valencian Community and the Region of Murcia have tightened the rules on who can let a property to tourists, and a single vote at a residents' meeting can now decide whether your apartment ever earns a euro from short stays.
It is worth saying plainly: this is not a Costa Blanca problem, or even a Spanish one. The same tightening is happening right across Spain, where the community-vote rule and the national register apply nationwide, and the wider pattern is unmistakable across Europe, where cities from Lisbon to Amsterdam to Paris have moved in exactly the same direction. Spain is not closing the door on holiday-let investment; it is simply formalising it, as the rest of Europe is bound to. None of this is a reason to step back. It is a reason to buy the right way, so that wherever the rules settle, your income is on solid ground.
This guide is an honest look at where things stand. We cover what has tightened, where the genuine pinch points are, and what it means for the numbers. Then we explain a route a growing number of investors are taking, purpose-built touristic developments that arrive with the licence already in place, and the tax quirk that, handled properly, can work very much in your favour.
We would rather you bought the right thing than the easy thing. Colin Robson · Sunshine Homes
If you last looked at buying a rental property in Spain a few years ago, almost everything you knew about tourist licences is now out of date.
Until recently, turning a Spanish home into a holiday let was largely a technical exercise. If the property met the standards, such as the habitability certificate, the right facilities and the correct safety equipment, you registered it and received your tourist licence. The town hall and the regional government rarely stood in the way.
That world has gone. From 3 April 2025, a change to Spain's national horizontal property law gave residents' associations a direct say over whether tourist letting is allowed in their building at all. In the Valencian Community, which covers the Costa Blanca, short tourist stays are now defined as ten nights or fewer, and they sit under a much firmer framework introduced in 2024 and reinforced in 2025.
Alongside the regional rules, a national registration system arrived in 2025. Every property offered for short-term tourist rental must now obtain a unique registration number through the national single-window system, and since 1 July 2025 that number has to appear in every listing. Platforms such as Airbnb and Booking.com are obliged to enforce it, and unregistered listings are being removed.
None of this means the holiday-let model is dead. Demand on the Costa Blanca and Costa Cálida is as strong as ever, with more than three hundred days of sunshine a year and a steady flow of northern European visitors. And none of it is unique to this stretch of coast. These are national rules, applied across the whole of Spain, and the same regulatory tide is rising across Europe's most popular destinations. What it means is that the licence, once a formality, has become the single most valuable and most fragile part of any rental investment. Get it, and you have an asset that pays. Miss it, and you have a lovely holiday home that earns nothing.
The rest of this guide is about making sure you end up on the right side of that line.
The licence used to be a box you ticked. Today it is the whole investment, and someone else may hold the pen.On the new reality of letting in Spain
The biggest single change is also the easiest to overlook. Your right to let now depends on a vote you may have no control over.
Since 3 April 2025, before any apartment in a shared building can be let to tourists, the community of owners must formally approve tourist use. The decision is taken at a general meeting, and a qualifying majority of three-fifths of owners, measured by ownership share, must vote in favour. Murcia applies the same threshold, with at least sixty percent of owners needing to agree.
If the community votes no, the door is closed. You cannot apply for a licence, no matter how well your property meets every other requirement. And the law allows communities to go further still and expressly prohibit tourist activity in their statutes.
This matters enormously for the buyer of a single apartment in a mixed building. Where many neighbours live there full-time, the appetite for a rotating cast of holidaymakers, wheeled suitcases at midnight and pool-side noise is often low. Those are precisely the buildings most likely to vote against letting.
There is a second trap. A licence is now tied to the owner as well as the property. When a property changes hands, the seller is expected to notify the regional government, which removes it from the register. So the comforting phrase "it already has a tourist licence" no longer guarantees that the licence travels with the sale, and if the community has since voted to ban letting, transferring it may be impossible.
The practical lesson is blunt. Before you fall in love with a resale apartment for rental, you need the community's meeting minutes in your hand, confirming in black and white that tourist letting is permitted and that your specific unit qualifies. Without that, you are buying hope.
For a buyer relying on rental income to make the sums work, here is where the new landscape genuinely bites.
Several municipalities have suspended new short-term licences entirely. Guardamar del Segura has paused them, leaving purpose-built complexes as the only route. Alicante city has frozen new licences in its centre and Playa San Juan, with strict per-resident caps planned. Altea and El Campello have applied their own restrictions. The map is now a patchwork, where two near-identical apartments in different towns can have completely different outcomes.
Letting without the correct licence and registration is no longer a slap on the wrist. Penalties across Spain's regions can run from five figures into the hundreds of thousands of euros for the most serious breaches. Enforcement has stepped up sharply, with authorities actively cross-checking listings and removing non-compliant properties from the major platforms.
Since July 2025 every tourist rental needs its national registration number, displayed in all advertising and at the property. On top of that, guest details must be reported to the authorities within twenty-four hours of arrival, and properties must meet facility standards such as a lift above certain floors, a contactable guest service and no exterior key boxes.
Rental income is taxable in Spain regardless of where you live. EU and EEA residents are taxed at 19% on net income after allowable costs. Buyers from outside the EU, including the UK, have historically paid 24% on gross income with no deductions, though a 2025 court ruling has begun to challenge that gap. The headline rate is only part of the story; the deductions you can claim matter just as much.
The Spanish government has proposed applying 21% VAT to most short-term tourist rentals, potentially from 2028, even where no hotel-style services are offered. It is not yet law and the detail may change, but it signals the clear direction of travel, and it makes the structure you buy into today worth thinking carefully about.
Perhaps the quietest pain point of all. Rules differ by region, by town and now by building, and they keep moving. For an overseas buyer who cannot easily attend a residents' meeting or track a municipal moratorium, that uncertainty is a real risk in its own right, and the hardest one to price in.
| Area | Short-term letting position | What it means for a buyer |
|---|---|---|
| Guardamar del Segura | New individual licences suspended | Realistically, only licensed new-build complexes work for rental |
| Alicante city | New licences frozen in centre & Playa San Juan; caps planned | Among the hardest places to secure a new licence |
| Altea / El Campello | Restrictions and suspensions in place | Detached homes more likely to qualify than apartments |
| Torrevieja / Orihuela Costa | Permitted, subject to zoning & community approval | Viable, but the community vote is decisive |
| Murcia / Costa Cálida | Permitted with 60% community approval & VUT standards | Strong demand near the Mar Menor and golf resorts; vote still required |
There is a way to take the licence lottery off the table entirely, and it is built into the property from the start.
A touristic development is a purpose-built complex designed from the ground up for holiday rental. Rather than buying a home and then trying to win the right to let it, you buy into a scheme where the tourist licence is already in place across the whole development. The community cannot vote it away, because tourist use is the very reason the complex exists.
These developments are classified as commercial rather than residential, which is what allows the licensing to be secured upfront and globally. That single distinction changes the buying experience completely. You are not chasing a permission that may never come; you are acquiring an asset that is already cleared to earn.
Crucially, a touristic development does everything for you. The property is bought fully furnished and equipped to a hotel standard, ready to receive guests from the moment you complete, and it comes with a full management contract in place. The operator handles the bookings, the cleaning, the linen, the guest registration and the day-to-day running, while you simply own the asset and enjoy your share of the use. It is genuinely hands-off ownership, which is also exactly what makes the income legitimate in the eyes of the tax authority.
No community vote to win, no municipal moratorium to dodge. Tourist letting is authorised across the scheme from day one.
Built to the facility and safety standards the law demands, with management infrastructure ready to handle bookings, cleaning and guest registration.
You buy knowing the rental engine is legal and can run, rather than hoping the paperwork falls your way after completion.
Most schemes allow a generous amount of personal use, so it remains a genuine holiday home rather than purely a financial instrument.
A touristic property carries 21% VAT instead of the usual transfer tax. At first glance that looks expensive. Looked at properly, it is often the opposite.
Because a touristic development is classed as commercial, buying one is treated as a commercial purchase. That means you pay 21% IVA (VAT) rather than the transfer tax that applies to an ordinary resale home. The figure understandably makes buyers pause, but the crucial point is that this VAT is reclaimable when the property is bought as a genuine rental business.
VAT is charged on the purchase, as with any commercial asset. It is a cost at completion, not a permanent one.
Register as VAT-liable in Spain and operate the property as a true rental business, and the input VAT can be recovered from the tax authority.
The reclaim is reviewed over a ten-year window. For each year you genuinely let the property, a portion becomes permanently yours.
The mechanism is well established but it does come with conditions. In broad terms, to recover the VAT you need to be set up and operating as a rental business rather than simply owning a holiday home:
Handled correctly, the headline 21% that worried you at the start becomes a cost you largely get back, while you hold an asset that is fully licensed to earn. That is the quiet logic that makes touristic developments add up for the more considered investor.
A note on advice: tax treatment depends on your personal circumstances and how the property is operated, and the rules evolve. The VAT reclaim is not automatic and should always be confirmed with a Spanish tax adviser before you commit. We are independent and work with a panel of recommended local lawyers and tax specialists, but the choice of who advises you is always yours.
Choose a purpose-built touristic development where the licence is already secured across the scheme.
Register for tax and VAT in Spain with the right professional support, so the structure is correct from the start.
Operate it as a managed rental business, covering bookings, cleaning and guest registration, meeting every standard.
Recover the VAT over time, take your own holidays in the sun, and let the asset work for you.
If what you really want is a holiday home you enjoy and an income from it, the honest question is not whether you can let it, but how much of that income depends on decisions you don't control. There are three tiers, and they are not equal.
The highest risk. With any property inside a community of owners, your income rests on two things you cannot control. First, you need the community to grant tourist use in the first place, a three-fifths vote that owners in resident-heavy buildings often decline. Second, even where letting is allowed today, the community can later vote to ban it, and properties already operating can face a community surcharge of up to 20% on the increased use of shared areas. You are, in effect, renting your permission from your neighbours.
Lower risk, but not no risk. Buy a detached, independent villa that sits outside any community of owners, and the neighbour vote disappears entirely. Your only gatekeeper is the town hall. That is a genuine improvement, but there is a catch that has changed the game: under the 2024 Valencian rules, a tourist licence now lasts only five years. To renew, you must reapply roughly a year before it expires and obtain a fresh urban compatibility report from the town hall, in practice almost like starting the whole process again. So the real question becomes: what happens if, five years from now, the town hall has changed its policy, capped licences in your zone, or simply tightened the rules? Your income is secure for a term, not for good.
The safest route. Because a touristic development is acquired as a commercial investment, it arrives with the licences already in place across the whole scheme and, typically, a management contract ready to run the rental operation for you. There is no community vote to win or lose, and the licensing isn't hanging on a five-year town-hall renewal of your single unit. It is the closest you can get to certainty: a genuine holiday home you can use, an income stream that is legally cleared to operate, and the professional infrastructure to handle the bookings, cleaning, guest registration and compliance on your behalf.
Sunshine Homes holds a hand-picked selection of purpose-built touristic new builds across the Costa Blanca South and Costa Cálida, developments that arrive fully licensed, designed for rental, and ready to put to work. We only bring forward schemes from developers we genuinely trust, and we are here long after completion, not just on the day you sign.