Holiday let or long-term rental: which suits your property?

Three ways to let a property

A long-term let is a main-residence tenancy under the Urban Leases Act (LAU): the tenant lives in the flat and can extend the contract up to five years (seven if the landlord is a company).

Holiday lets fall outside the LAU. In Andalusia they are governed by Decree 28/2016, amended in 2024: short stays for travellers, registration in the Andalusian Tourism Register and a list of requirements.

Between the two sits mid-term rental (alquiler de temporada), with contracts of a few months for students or posted workers. Its rules have just changed.

Income: stability versus variability

With a long-term let you know what you will receive each month. With a holiday let, income depends on occupancy and the nightly rate, which change with the season, events and competition.

That is why we will not give you a “typical” return percentage: it depends on the location, the flat and the management. Always compare net income, after costs, platform fees and tax.

Work and management

A long-term let requires work at the start (tenant, contract, deposit) and little afterwards. A holiday let is a small daily business: listings, pricing, messages, check-ins and check-outs, cleaning, laundry and repairs.

Andalusian rules also require the property to be cleaned at each guest's arrival and departure and a 24-hour helpline. If you cannot take this on, you can delegate it to a management company.

Costs to factor in

On top of the costs of any rental (IBI property tax, community fees, insurance, maintenance), a holiday let adds:

• Cleaning and laundry after every stay.
• Utilities (electricity, water, internet), usually paid by the owner.
• Booking platform fees.
• Furniture, kitchenware and bed linen, with regular replacement.
• Mandatory equipment: air conditioning and heating, first-aid kit, complaint forms…
• Management, if you delegate it.

Legal requirements: the first thing to check

To let a property to tourists in Andalusia you must file a responsible declaration, register it in the Andalusian Tourism Register before you start and comply with Decree 28/2016. Since 3 April 2025, the Horizontal Property Act has also required the prior, express approval of the owners' association.

In Málaga city, since 23 August 2025 the City Council has suspended new holiday lets across the whole municipality, for a maximum of three years or until the amended land-use plan (PGOU) is approved. In practice, the holiday-let option is now open, with few exceptions, only to properties that were already registered. Check the current situation before you decide.

Tax: the general differences

For Spanish income tax (IRPF), both are usually taxed as income from real estate, but only a main-residence let can qualify for a reduction of the net income; a holiday let cannot, according to the Tax Agency.

For VAT, residential lettings are exempt, and so are holiday lets if no hotel-type services are provided. Royal Decree-law 29/2026 provides for 10% VAT on stays of up to 30 nights from 1 December 2026, pending ratification.

The risks of each option

With a long-term let, the most feared risk is unpaid rent and the time it can take to recover the property. With a holiday let, guests pay in advance, but there are quiet months, more wear and tear, possible friction with neighbours and, above all, regulatory risk.

In 2025 and 2026 the Horizontal Property Act, Málaga's planning rules and the national short-term rental register (partly annulled by the Supreme Court in May 2026) have all changed. Letting without complying exposes you to fines.

Flexibility of use

This is the great advantage of a holiday let: you can block dates for yourself or your family, carry out work between bookings or sell the flat with no tenant in it. With a main-residence tenancy, the flat is in the tenant's hands for years.

Mid-term rental, a third route

Royal Decree-law 29/2026, in force since 8 October 2026, turns mid-term rental into a “temporary housing lease”: the contract must state a genuine, provable reason why the tenant is away from home, last more than 31 days and, as a general rule, no more than twelve months.

If twelve months are exceeded without justification, or more than two contracts with the same tenant are chained, it becomes a main-residence tenancy. The decree must be ratified by the Standing Committee of the Spanish Parliament; check its status in the BOE before signing.

How we can help

At Dossan Apartments we offer legal advice so your property meets the requirements, furnishing, booking and pricing management, cleaning and maintenance, and a monthly report with stays, prices, costs and profit.