The hotel sector has been complaining for years about private individuals renting out their homes. It started in the years following the real estate crisis. Hotel availability was limited, which drove prices up. Private individuals took advantage of this by offering their homes for short stays. Platforms like Airbnb and Booking capitalized on the opportunity, creating extremely effective tools for homeowners to rent out their properties.
Due to pressure from the hotel sector, regulations were introduced to register these private landlords and impose strict conditions on them. These regulations were implemented in 2018, but that was not enough for the hotel industry. Competition continued to grow. In August 2024, an amendment to the existing Tourism Law was pushed through. It took another six years, but now the law is structured in such a way that on paper renting to holidaymakers has become very unattractive.
This amendment is, “on paper”,a death blow to private short-term rentals.
All rentals for a duration of fewer than 11 days are now subject to particularly intense regulation. Private landlords must meet the same requirements as hotels, with additional conditions that could make it virtually impossible for many to rent out their properties short-term.
Although the law ties the definition of tourist rental strictly to stays of 11 days or fewer, there seems to be room in practice for municipalities through their spatial planning policies to require permits for longer rental durations as well. Legally, this is debatable, and until the highest courts give a ruling, it remains a defensible but controversial interpretation. For the sake of clarity in this article, I will stick with the 11-day limit, but keep in mind that stays of up to 60 days could be interpreted as holiday rentals. These differing interpretations do not help legal certainty.
A frequently mentioned example of what is in store for private landlords is the so-called ban on key lockboxes. This ban does not currently exist. It is not included in the law. However, there are plans to create a regulation in the future that would include such a ban. There appears to be a draft text circulating that these stories are based on, but it cannot be found on the official website of the Valencian government. Nevertheless, it is a preview of what the regional government of Valencia is planning.
If you are still considering renting to holidaymakers in the Valencia region, take note of the following conditions:
- Legislation: The new regulation requires the owner to comply with all other laws. This means that if you are in a dispute with the municipality (which, as we know, can take years) about whether solar panels were installed correctly, this could be grounds to deny you registration as a landlord.
- Location: Previously, it was already required to include the registration number from the Generalitat Valenciana in advertisements. Now, it is also mandatory to publish the exact location of the property using the cadastral reference. Not very controversial in itself.
- Municipal Oversight: The new regulation gives municipalities more authority. They can implement specific local rules that all landlords must follow. This could result in one town requiring a sign on the wall, while another demands the sign be removed. We have seen similar inconsistencies with eco-stickers for cars: each city above a certain size can determine its own rules for vehicle access. Legal certainty is not served by this.
- Definition of Holiday Rental: The new regulation now states that only stays of up to 10 days are classified as holiday rentals. A stay of 11 days no longer falls under the scheme and requires no special registration. However, there are interpretations that give municipalities room to extend this period for example, up to 60 days. This creates a lot of uncertainty.
- Duration of Registration: The registration is now limited to a maximum of five years. After that, it must be renewed. This creates uncertainty for those buying a second home with the intention of covering some of the costs through rental income. What if registration is not renewed?
- Quality Standards: The new regulation intends to introduce quality standards via additional regulations, covering things like the “look & feel” of the property, safety, equipment, and accessibility. Wherever governments regulate, we see arbitrary enforcement. It is impossible to define quality standards precisely. Are white walls allowed, but green ones not? Is a 1960’s design style unacceptable? Can a microwave be more than five years old?
- Disciplinary Measures: One notable aspect of the expected disciplinary rules is that if the property is rented for longer than 10 days during the registration period, the registration may be revoked. Many owners rent their properties by the week in summer, but also for two-week periods. The latter is now grounds for losing registration. In winter, such homes are often rented monthly or for extended periods to long-stay guests. This too is now a reason for revocation. In short, the homeowner must choose: either rent for 10 days or less, or more than 10 days, no mixed model is allowed.
- Joint Liability for Misuse: Homeowners are jointly liable for misuse under the regulation. Many owners rent through an intermediary, such as a local agent or rental company. If the intermediary breaks the rules, the owner can also be held liable if they do not provide information about the intermediary within a certain time. We know all too well that official notices often do not reach the intended recipient. Postal service is unreliable. Many property owners are foreigners, and Spain lacks a central registry where addresses are updated automatically.
In short, a hotel can continue its operations, even if it is in a dispute with the municipality over solar panels or with the tax authority over VAT. Under the new regulation, these are reasons to deny or revoke registration for a private landlord. A hotel does not have to apply for a new permit every five years. A hotel can be decorated however it wants like kitschy, modern, outdated. It does not matter. Whether it suits a civil servant’s taste or not is no reason to deny operation. Under Valencian’s new regulation, it is different for homeowners. Homeowners must comply with the design and quality standards for residential buildings concerning the relationship between spaces, linear dimensions, circulation (horizontal and vertical), ventilation and lighting openings, parking, and the lighting and ventilation of both the dwelling and the building.
It seems that after about 14 years, the hotel sector has won the battle for tourists. Regulation of private holiday rentals may make it so complicated that it is no longer worthwhile. But is Valencia really benefiting from this? In 2023, tourism contributed 12.8% to Spain’s national GDP, and in 2022 it accounted for a staggering 15.1% of Valencian’s regional GDP.
The argument used is that tourism is creating too much pressure and a housing shortage is looming, but there are no statistics to back this up. It all seems like ad hoc policy driven by local pressure from residents. The mostly foreign property owners have no voice.
Roeland van Passel