Anyone buying an apartment in Spain with the aim of renting it out to tourists often thinks first of the tourist rental licence. But even when you get this permit, that does not automatically mean that you are actually allowed to let the property as a holiday home.
A recent ruling by the Spanish Supreme Court (Supreme Court) makes that clear once again.
A ban of more than 60 years old
The case concerned an apartment in Madrid whose owners had a tourist rental licence and offered the property through holiday rental platforms.
There was only one major problem: the articles of association of the Homeowners' Association (VvE) had stated since 1962 that apartments not as “guest house” — loosely translated a guesthouse or accommodation — could be used.
Although terms such as Airbnb and tourist rentals naturally did not exist in 1962, the Spanish Supreme Court ruled that the old ban could also apply to modern holiday rentals.
The result? Tourist rental had to be stopped, despite the owners holding a tourist rental licence.
Therefore, a tourist rental licence alone is not sufficient
This is especially important for people who want to buy real estate in Spain as an investment.
A government permit and authorisation according to the articles of association of an apartment complex are, after all, two different matters. The competent authority may permit tourist rentals, while the articles of association of the Owners' Association contain restrictions that still make such rentals impossible.
Therefore, it is important to investigate prior to purchase not only whether a holiday rental licence is possible, but also to carefully check the articles of association and other relevant documents of the Owners' Association.
What do you need to check before purchasing?
Do you want to buy an apartment in Spain with the aim of renting it out to tourists? Then it is wise to check, among other things, before making a final decision:
- whether tourist rental is permitted at that location;
- whether a tourist rental licence can be obtained for the property;
- what is stated in the articles of association of the Owners' Association;
- whether restrictions apply to tourist or business activities;
- and whether the Association of Owners has taken any additional decisions regarding this.
That last point in particular can easily be overlooked. As this ruling shows, even a provision drafted decades ago can still have consequences today.
Buying to let? Do your homework first
Purchasing a property for holiday rental can be attractive, but the expected rental potential should not be based solely on the fact that a tourist licence is available or appears possible.
Therefore, have it checked before purchase whether the property is legally and, according to the rules of the Owners' Association, suitable for the intended use.
It can happen that you buy a property with the idea of generating income from holiday rentals, only to find out later that renting it out is not permitted.
This article is intended for general information purposes only and does not constitute legal or tax advice. Regulations and the circumstances of each property may vary.
