Rental contracts in Spain: Legal and tax matters

1. Legal framework

Rental agreements in Spain are regulated by the Civil Code (Código Civil) and Law 29/1994 on urban leases (LAU). LAU distinguishes between:

• Permanent residential rental: Lease for permanent residence
• Other use: Vacation, study or work purposes

2. Permanent residential rental

Leases for permanent residence are characterized by:

• Duration: Min. 5 years (physical landlord), 7 years (legal)
• Automatic extensions: Annual extensions until minimum is reached
• Rent regulation: Based on contract or official price index

3. Temporary rental

Seasonal rental (arrendamiento de temporada) is used for temporary purposes such as vacation or work. Characteristics:

• Specific and temporary purpose
• Clear time indication in the contract
• No automatic extension

The purpose – not the length – determines the type, according to case law.

4. Vacation properties

Vacation rental is regulated by regional tourism legislation, not LAU. These properties are:

• Fully furnished and ready to use
• Offered with profit in mind
• Marketed on Airbnb etc.

Requirements for legal rental include:

• Tourist license
• Registration in regional register
• Safety, complaint forms, etc.

Homeowner associations can prohibit tourist rental if it appears in the bylaws (confirmed in STS 1671/2023 and 1643/2023).

5. Tax matters for Danes without residence

Non-resident Danes are taxed on rental income via IRNR:

• 19% for EU citizens; 24% for others
• Gross income is taxed (only EU deduction possible)
• Reporting via Modelo 210

Non-residents do not get 60% tax discount that residents can get in IRPF – a difference several experts consider contrary to EU law.

6. Case law

• STS 264/2025: Only valid prohibition of tourist rental if the bylaws explicitly mention it
• STS 1671/2023 & 1643/2023: Confirm that vacation rental is commercial and can be limited in homeowner associations