When renting out a property in Spain, especially in high-demand areas like the Costa Blanca, it’s essential to understand the differences between the three main types of rental: tourist, seasonal, and long-term. Each caters to different needs, has specific legal implications, and offers advantages and disadvantages for both landlords and tenants.

This article provides an in-depth analysis of each rental type, their benefits and limitations, and the necessary legal steps for each case.

1. Tourist Rental

What is it?

Tourist rental refers to renting a furnished property for days or weeks for vacation purposes, through platforms like Airbnb, Booking, or directly via agencies. This type of rental is regulated by autonomous communities, and in the Valencian Community, it requires a prior tourist license.

Legal Requirements

• Tourist license (VT number) granted by the Generalitat Valenciana.

• Registration in the Registry of Tourism Enterprises, Establishments, and Professions.

• Certificate of habitability and compliance with safety standards (fire extinguisher, complaint forms, etc.).

• Responsible declaration to the local council.

• Obligation to declare income in the Personal Income Tax (IRPF) and Value Added Tax (VAT) if complementary services are provided.

Pros

• High nightly profitability in tourist areas.

• Flexibility of use for the owner.

• Greater control of the property between bookings.

Cons

• Bureaucratic procedures and requirements.

• Increasingly restrictive regulations in many cities.

• Higher tenant turnover, implying intensive management or a specialized agency.

• Seasonal occupancy peaks: irregular income.

2. Seasonal Rental

What is it?

This is a rental for weeks or months, but not intended as a habitual residence. It’s used for stays due to work, academic, medical reasons, or prolonged leisure. It’s not considered a tourist or long-term rental but must justify the temporary nature of the rental.

Legal Requirements

• No tourist license is needed, provided the contract specifies and justifies the reason for the temporary nature (work stay, medical treatment, etc.).

• Contract with defined start and end dates.

• Not subject to the Urban Lease Law (LAU) as a habitual residence but to the will of the parties, although some basic rules apply.

Pros

• Ideal for displaced professionals, students, or families renovating their home.

• More stability than tourist rentals, with less turnover.

• No need for a tourist license, making it attractive in areas with restrictions.

Cons

• Requires documentary proof of the reason for the temporary stay to avoid legal issues.

• Lower income than tourist rentals, although more regular.

• May be reviewed by tax authorities or the administration if used as a way to avoid tourist licenses.

3. Long-Term Rental

What is it?

This is a rental contract for a property as the tenant’s habitual residence, for a minimum period of 5 years if the landlord is an individual, or 7 years if it’s a legal entity (extendable).

Legal Requirements

• Contract in accordance with the Urban Lease Law (LAU).

• Mandatory deposit of 1 month, plus additional guarantees if agreed.

• The tenant can stay up to 5 or 7 years as long as they fulfill their obligations.

• Declaration of income received in the income tax return.

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Pros

• Stable and predictable long-term income.

• Lower tenant turnover, less wear and tear on the property.

• Ease of management once the contract is signed.

Cons

• Lower profitability compared to tourist or seasonal rentals in high-demand areas.

• The owner loses flexibility to recover the property.

• Risk of non-payment or conflicts, with longer eviction processes.

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Conclusion

Choosing the appropriate type of rental depends on the owner’s objective, the property’s location, availability time, and willingness to manage the rental. Tourist rentals can offer significant economic benefits but entail greater legal and operational responsibility. Seasonal rentals are an ideal intermediate point for owners seeking legal flexibility and temporary occupancy. Long-term rentals are perfect for those desiring stability and less management burden.

In all cases, it’s recommended to draft clear contracts, adjusted to current regulations, and, if possible, seek advice from a specialized agency or real estate lawyer.

Whether you’re an owner looking to rent your property, a buyer considering an investment, or a tenant seeking advice, feel free to contact us.