Three rental models, not two
Before running the numbers, it helps to know the legal categories. They determine which licence you need, how you are taxed and how much protection the tenant enjoys.
- Long-term letting as a main residence falls under the Spanish tenancy act (LAU). The contract runs annually and is extended up to five years, or seven if the landlord is a legal entity. No tourist licence is required.
- Seasonal letting (alquiler de temporada) is letting for a purpose other than permanent residence, for one to eleven months and with no mandatory extension. No tourist licence is needed as long as the property is not marketed as tourist accommodation. It suits winter visitors from Northern Europe, remote workers and people on temporary assignments. The contract must clearly justify its temporary nature.
- Tourist letting requires registration with the Andalusian tourism register (Registro de Turismo de Andalucía). The VFT number (vivienda con fines turísticos) you receive must be shown in every advertisement.
Worked example: a 250,000-euro flat in Fuengirola
Our local partners' model assumes a two-bedroom flat in Fuengirola, less than 500 metres from the beach. With purchase costs of around 13 per cent, the total investment is 282,500 euros, without a mortgage. The long-term rent is 1,200 euros a month; the holiday let assumes 62 per cent occupancy (226 nights) at an average of 110 euros a night. All yields are calculated on the total investment and are indicative.
| Item | Long-term let | Holiday let |
|---|---|---|
| Gross rental income per year | 14,400 euros | 24,900 euros |
| Gross yield | 5.1% | 8.8% |
| Operating costs | 3,870 euros | 11,980 euros |
| Net before tax | 10,530 euros (3.7%) | 12,920 euros (4.6%) |
| After tax, non-resident from the EU/EEA | 3.0% | 3.7% |
| After tax, non-resident from outside the EU | 2.50% | 2.46% |
| After tax, Spanish tax resident | 3.17% | 3.20% |
With holiday letting, almost half of the income goes on costs, compared with just over a quarter for a long-term let. The difference lies mainly in management (around 20 per cent against 5 per cent), utilities and internet, cleaning and linen, replacing furnishings and administrative compliance.
Your tax residence is decisive
It is your tax residence, not your nationality, that determines how you are taxed in Spain (position as of 2026).
- If you live in another EU or EEA country, you pay 19 per cent non-resident income tax (IRNR) on the net result and may deduct expenses. In the model, holiday letting then wins by around 0.7 percentage points.
- If you live outside the EU, for example in the United Kingdom or Switzerland, you pay 24 per cent on gross rent with no deduction for expenses. That weighs heavily on the high-cost holiday model; a long-term let then comes out marginally ahead.
- If you are tax resident in Spain, progressive rates apply, with a 50 per cent reduction on net rent when letting as a main residence. In the model, assuming a 30 per cent marginal rate, the two models are then virtually level.
Non-residents must also declare deemed income for periods when the property is empty, via Modelo 210, calculated at 1.1 or 2 per cent of the cadastral value. The model is an illustration, not a forecast. Have your own situation calculated by an independent tax adviser.
The rules in 2026
- Community consent. Since 3 April 2025, a new tourist registration requires the written approval of three fifths of the owners in the building. Many complexes do not grant it. Ask for the minutes of the owners' association before you buy.
- Municipal limits. Town halls may cap the number of tourist lets by zone or period, and several Andalusian municipalities already do so.
- Registration. The VFT number from the Andalusian register is the one to display. The national registration framework has been in legal flux during 2026; have the current position checked.
- Long-term letting. Andalusia has not designated any stressed housing market areas, so you can set the opening rent of a new contract freely. Annual indexation of existing contracts is, however, capped nationally.
More on the licence can be found in the tourist licence, and on the alternative in long-term letting.
Which model suits you?
- EU non-resident with professional management: holiday letting makes best use of the low rate on net income.
- Owner from outside the EU: long-term or seasonal letting.
- Own use for a few weeks a year: seasonal or holiday letting.
- Building without community consent: only long-term or seasonal letting is possible.
- Predictability and little involvement: long-term letting.
Holiday letting carries concentrated regulatory risk and depends heavily on the quality of the manager; see property management. Long-term letting carries the risk of non-payment and can tie up the property for up to five years.
How CostaVista can assist
Before you buy, CostaVista helps you establish which rental model is legally possible for a property, and works with our local partners to set out realistic income and costs. Browse our properties or contact us.
General information, as of October 2026. This is not legal, tax or financial advice; for your own situation, consult an independent specialist.