From this week, new tourist rentals in Spain will require the approval of 60% of local property owners, making it much harder to open short-term lets in residential buildings—especially in Madrid, where an estimated 14,000 listings are operating illegally.
A new national law effective from 3 April overhauls the way short-term rentals are approved in Spain, allowing communities of property owners to veto the opening of tourist flats in their building unless three fifths of residents (by ownership shares) vote in favour. Crucially, the regulation empowers neighbours across the country to block such rentals, marking a major legislative shift in the short-term let landscape.
Madrid—the capital of Spain’s short-stay rental boom and, according to critics, its short-stay rental chaos—stands to be most immediately affected. The Spanish capital has long struggled with a proliferation of unlicensed holiday lets, leading to complaints over noise, security, overcrowding, and the vanishing availability of affordable housing. Now, residents will finally have some real teeth when it comes to opposing them.
What the law says
The reform, introduced as part of a new national Organic Law backed by the Ministry of Social Affairs and Consumer Protection, modifies the existing Horizontal Property Law—the framework that governs apartment blocks and neighbour relationships in Spain.
It stipulates that tourist-use flats (viviendas de uso turístico) can only open in residential buildings if at least 60% of neighbours—calculated both by number of owners and by their ownership shares—explicitly approve. Without this consent, communities are empowered to demand the rental’s immediate closure and take legal action if necessary.
The only exception? Tourist lets that already had all the paperwork in order before 3 April 2024. These will be ‘grandfathered’ in and exempt from the veto clause. But for the rest—especially the many currently trying to legalise their status—it could be game over.
Communities are also allowed to impose up to 20% more in monthly community fees on short-term rental units than on regular apartments, in recognition of the disproportionate wear and tear on lifts, entrances, pools, and other common areas.
Madrid’s particular problem
Although the reform applies nationwide, Madrid is clearly a prime target. City authorities have acknowledged that around 14,000 tourist rental units (8% of listings, according to city hall platform data) are operating illegally, without proper licensing.
The city government under José Luis Martínez-Almeida has already taken steps to rein in the sector, including putting a freeze on new short-term rental licences through February 2026 and pushing for a new zoning policy that would isolate tourist lets into separate buildings without regular residential neighbours.
Even so, many flats have continued to operate either in legal grey zones or in outright defiance of current rules. For these, the new law signals open season for community crackdowns.
Property implications
For property investors, second-home owners, and holiday let operators, this legal change is a game-changer. It drastically increases the regulatory risk associated with buying or operating tourist-use flats in shared buildings anywhere in Spain—a major hurdle in what was previously a fairly permissive market outside of a few major cities.
There’s already speculation that this may shift market dynamics in several ways:
- Prospective buyers may turn away from shared buildings and toward entire buildings to circumvent community vetoes.
- Small-scale owners earning passive income through tourist platforms may struggle to survive in community-hostile environments.
- Legal vetting processes for new lettings will become more costly and time-consuming.
Impacts beyond Madrid
While Madrid grabs headlines, other municipalities in the region face similar challenges and will also feel the impact. Towns like Alcobendas, San Martín de Valdeiglesias, and Buitrago de Lozoya—each with a high concentration of tourist lets outside the city core—will now be able to impose similar restrictions.
Nationally, platforms like Airbnb and Booking.com will also face pressure, as a new housing ministry decree coming in July will require all listings to show official property identifiers—or be removed within 48 hours. This promises a much-needed layer of transparency in a market long lacking it.
Conclusion
Spain’s new law empowers communities to take control over the spread of tourist rentals, aiming to rebalance city life in favour of long-term residents. While it opens the door to local democracy, it closes many doors for prospective short-term rental operators. In Madrid and beyond, that may be exactly what many neighbours have been waiting for.
