Spain’s golden beaches and sunny climate have fueled a booming short-term rental market—especially along the Costa del Sol, where holidaymakers arrive year-round. But as local and regional authorities tighten regulations to balance tourism with residents’ needs, investors must stay alert to avoid costly mistakes. Understanding the rules is not only essential to protecting your license, but also to optimizing returns and staying ahead of competitors. This guide breaks down Andalusia’s framework for rental licensing, highlights best practices, explores pricing strategies, and even looks at a real-world Marbella case study to help you thrive in 2025 and beyond.
1. Regulatory Overview: Andalusian Licensing and Local Bylaws
Short-term rental laws in spain costa del sol investor guide 2025
Short-term rentals in Andalusia are governed by Decree 28/2016 (updated in 2022), which sets the requirements for apartments and houses marketed as tourist accommodation. Under this law, properties fall into two categories: Vivienda con Fines Turísticos (VFT), referring to homes rented by the night or week, and Alojamientos Turísticos, which covers professional tourist accommodation such as hotels and aparthotels. Ordinary residential units converted into holiday rentals fall under the VFT system.
Licensing Basics
To operate legally, owners must register their property with the Junta de Andalucía and obtain a VFT license number—known as the Código de Registro Turístico (CR). This number must then appear in all advertising and on booking platforms. Meeting minimum standards is also mandatory: contracts must be written in Spanish, guest arrivals must be logged in the official REX system or guest book, and each property must be equipped with fire-safety gear, a first-aid kit, and essential amenities like towels, bed linen, and kitchenware.
Municipal Rules
On top of regional law, many municipalities apply their own restrictions. Marbella, for example, sets maximum occupancy levels based on square meters and enforces noise-control measures, including late check-in limits. Estepona and Fuengirola have introduced caps on new licenses in specific zones to curb overtourism, while also requiring the collection of a small tourist tax (usually €1–€2 per guest per night).
Buyer Tip: Always check both your regional CR registration and the local town hall rules—some municipalities require an additional permit before you can legally rent.
2. Licence Application Process: Steps, Fees, and Timelines
Applying for a short-term rental license involves gathering several documents such as the property title deed, community statutes that allow rentals, an energy performance certificate (EPC), and valid property insurance. Applications can be submitted online through the Andalusian Turismo portal or directly at the local town hall’s tourism office. Fees typically range between €200 and €400, depending on the municipality. In some cases, an on-site inspection may be required to verify safety equipment and living standards. Once approved, owners receive their CR number within two to three months, and the property is listed on the official Turismo website.
Buyer Tip: Many applications are rejected due to small errors—outdated EPCs, missing community-association approval, or contracts not written in Spanish. A specialized consultant or gestor can smooth the process and prevent delays.
3. Compliance Best Practices: Safety, Tax, and Reporting
Once licensed, compliance is ongoing. Properties must be kept up to safety standards with annual checks on fire extinguishers, smoke detectors, and carbon-monoxide alarms. Professional cleaning between stays is recommended, and written house rules, emergency contacts, and check-out procedures should be available in multiple languages to ensure smooth guest experiences.
From a financial perspective, hosts must stay on top of taxes. Tourist taxes collected per night must be remitted quarterly to the municipality. Non-resident landlords pay a flat 24% on gross rental income, while Spanish residents may deduct allowable expenses such as cleaning, maintenance, and utilities before paying progressive income tax. In addition, all landlords must report booking-platform revenues through Spain’s Model 179, filed quarterly with the Agencia Tributaria.
Guest data also falls under GDPR rules, meaning personal information must be securely stored and erased upon request. A clear privacy policy should be shared with all renters.
4. Dynamic Pricing: Seasonal Strategies for Higher Yields
Maximizing returns often comes down to pricing. Tools like PriceLabs, Wheelhouse, and Beyond Pricing can automatically adjust nightly rates based on demand, competitor listings, and local events. Seasonal strategy is also key: rates peak between June and September and during Christmas, when minimum stays of 5–7 nights are common. The shoulder seasons in spring and autumn usually attract moderate rates and shorter stays, while winter months may require discounts or midweek offers to fill calendars.
Offering incentives such as weekly or monthly discounts can encourage longer bookings and reduce turnover costs, while last-minute offers within seven days of arrival are effective for filling unexpected gaps.
Buyer Tip: Reviewing your own booking history is the best way to fine-tune rates and avoid the “race to the bottom” that can harm long-term profitability.
5. Alternative Models: Beyond Short-Term Lets
In areas where new licenses are capped, investors are exploring alternatives. Long-term rentals of six months or more offer stable income and avoid the VFT framework, though yields are lower at around 3–4%. Serviced apartments—combining residential leases with hotel-style services—are increasingly popular with corporate expatriates and remote workers. Another option is split-use contracts, which allow up to 90 days of tourist stays per year with the rest under long-term tenancy. However, these arrangements require careful drafting and often community approval.
Buyer Tip: Always check your community statutes first. Some buildings forbid all forms of leasing, while others only permit long-term rentals.
6. Case Study: Marbella’s Puerta del Mar Residences
One Marbella apartment block illustrates how compliance can work in practice. The 1970s development “Puerta del Mar Residences” was retrofitted and relicensed as VFTs in 2023. Upgrades included new smoke detectors, updated EPCs, modern kitchens and bathrooms, and a digital REX system for guest registrations. Despite Marbella’s cap on new licenses, the building secured an exemption by converting the entire block. The result was an impressive 78% occupancy in 2024, with an average nightly rate of €180—yielding a net return of 6.3%.
The lesson? Early engagement with municipal planners and community associations makes a huge difference in getting projects approved.
7. Preparing for Inspections
Municipal audits can take place with little warning, so landlords should be inspection-ready at all times. Keeping a compliance folder with copies of the license, EPC, insurance documents, and emergency plans is essential. Up-to-date contracts, guest logs, and equipment service records should be on file, along with cleaning reports and tax filings.
Buyer Tip: Scheduling your own internal audits twice a year helps catch gaps before the inspectors do.
Conclusion
Short-term rental investment on the Costa del Sol remains a lucrative opportunity—but only for those who navigate the shifting regulatory terrain adeptly. By securing the correct Andalusian and municipal licenses, adhering to safety and tax requirements, leveraging dynamic-pricing tools, and preparing for inspections, you can maximize your rental income while minimizing legal risk. Whether you own a beachfront apartment in Marbella or a hillside villa in Ojén, this guide equips you with the knowledge to stay compliant and profitable in 2025 and beyond.
