Madrid Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Madrid

If you are considering starting a short-term rental business in Madrid using platforms like Airbnb or VRBO, there are several important regulations to be aware of:

• Short-term rentals are defined as stays of 90 days or less in Madrid. Properties rented for more than 90 days per year require a permit.
• To legally operate a short-term rental, you must register the property with the Madrid City Council and obtain a tourism license number. This license number must be displayed on all listings and advertisements.
• Short-term rental properties in Madrid must have a separate street entrance from permanent residents in the building. Renting individual rooms or apartments within residential buildings is prohibited.
• Hosts are required to submit detailed guest information, including passport details, to the online Alloggiati Web portal managed by the state police within 24 hours of check-in.
• Short-term rental income is taxed at a flat rate of 24% for non-resident hosts. Resident hosts pay tax based on their marginal tax rate.
• Hosts must collect a tourist tax of €3 per person per night for a maximum of 14 nights. Airbnb collects and remits this tax on behalf of hosts for qualifying rentals.

Madrid has been cracking down on unlicensed short-term rentals in recent years. Authorities conduct inspections and can issue fines starting at €3000 for unregistered properties. In 2019, Madrid passed restrictions aimed at combating overtourism, including banning short-term rentals in apartments without a separate entrance.

Despite the strict regulations, demand for short-term rentals remains high in Madrid from both tourists and remote workers. Hosts who carefully comply with all registration, tax, and reporting requirements can still operate successful short-term rental businesses. However, the rules have caused some hosts to shift to medium-term rentals of 1-3 months to avoid some of the restrictions.

Before listing your property, it's essential to fully understand and comply with Madrid's evolving short-term rental regulations. Consulting with a local lawyer and tax professional is advisable to ensure you operate legally and avoid potential penalties.

Short-Term Rental Licensing Requirement in Madrid

To legally operate a short-term rental in Madrid, hosts must obtain a license and follow several important regulations:

1. All short-term rental properties must be registered with the Madrid City Council and obtain a tourism license number. This license number must be clearly displayed on all listings and advertisements for the property.
2. To be eligible for a short-term rental license, the property must have a separate street entrance from any permanent residential units in the building. Renting out individual rooms or apartments within residential buildings with common entrances is prohibited.
3. Hosts must submit a declaración responsable (responsible declaration) to the city council, affirming that their property meets all the legal requirements for short-term rentals. This includes having a valid certificate of occupancy, meeting minimum size and amenity standards, and complying with health and safety regulations.
4. Within 3 months of submitting the declaración responsable, the city council will conduct an inspection of the property to verify compliance. The host will receive their official short-term rental license and registration number if approved.
5. Hosts are required to have insurance covering civil liability and potential damages to third parties arising from the short-term rental activity.
6. For each guest stay, hosts must submit detailed information, including the guest's passport details, to the online Registro de Viajeros platform managed by the national police within 24 hours of check-in.

Madrid has been increasing enforcement efforts against unlicensed short-term rentals in recent years. Inspectors actively monitor online listings and conduct on-site visits to identify properties operating without proper licenses.

Fines for renting without a license or failing to comply with other regulations can range from €600 to €600,000, depending on the severity of the infraction. Repeat offenders may have their property seized by the authorities.

In 2024, Madrid announced a freeze on issuing new short-term rental licenses and increased penalties, signaling a further crackdown on the sector. Some hosts worry this could make Madrid inhospitable to short-term rentals, similar to restrictions enacted in New York City.

However, demand for short-term accommodations in Madrid remains high for both tourists and remote workers. Hosts who carefully comply with all licensing and operating requirements can still run successful rentals, though the increasing regulations have caused some to shift to longer stays of 1-3 months instead.

Navigating Madrid's short-term rental licensing process can be complex, so many hosts choose to work with experienced local property managers to ensure full compliance. With steep fines for violations, staying informed of evolving regulations and maintaining all necessary licenses and registrations is critical.

Required Documents for Madrid Short-Term Rentals

To legally operate a short-term rental in Madrid, hosts must provide several key documents and pieces of information to the authorities:

1. Proof of property ownership or landlord authorization to use the property as a short-term rental. If the host is a tenant, they must obtain written permission from the property owner.
2. A copy of the host's identification document, such as a passport, national ID card (DNI), or NIE (Foreigner Identification Number).
3. The property's cadastral reference number and a copy of the most recent property tax (IBI) receipt. This information identifies the property in the official land registry.
4. A certificate of occupancy (cédula de habitabilidad) issued by a licensed architect or engineer, confirming the property meets all safety and habitability requirements for short-term rentals. This includes having proper ventilation, hot water, heating, and fire safety measures.
5. A detailed floor plan of the property, stamped by an architect or surveyor, showing the layout and square footage of each room.
6. Provide proof of insurance covering civil liability and potential damages arising from short-term rental activity. Many platforms, such as Airbnb, provide some level of host protection insurance.
7. Hosts must collect passport information for each guest and submit it through the online Registro de Viajeros platform to the national police within 24 hours of check-in. This is required by national security laws.
8. If food and beverage are provided to guests, relevant food safety certifications and documentation may be required.

Gathering and submitting the required documentation is crucial in legally operating a short-term rental in Madrid. Failure to provide the necessary information can result in fines and penalties for hosts.

The registration process and ongoing reporting requirements can be time-consuming, but are essential for compliance with the city's regulations aimed at monitoring the growth of short-term rentals. Many hosts find it helpful to engage a local property manager or specialized short-term rental agency to assist in navigating the bureaucratic process.

Despite the strict rules, demand for short-term rentals remains high in Madrid from both tourists and business travelers. By carefully adhering to the documentation requirements, hosts can operate successful rentals while contributing to the city's efforts to balance the economic benefits of tourism with quality of life for residents.

Madrid Short-Term Rental Taxes

Madrid, like many other Spanish cities, imposes taxes on short-term rental income and requires hosts to collect a tourist tax from guests. Here are the key tax considerations for short-term rentals in Madrid:

1. Short-term rental income is subject to personal income tax (IRPF) for resident hosts. The tax rate ranges from 19% to 45% depending on the host's total income. Non-resident hosts from the EU/EEA are taxed at a flat rate of 19%, while non-EU/EEA residents are taxed at 24%.
2. Hosts must collect a tourist tax of €3 per person per night for a maximum of 14 nights. This tax applies to guests aged 16 and over. Airbnb collects and remits this tax on behalf of hosts for qualifying rentals.
3. Within 24 hours of check-in, hosts are required to submit detailed guest information, including passport details, to the online Registro de Viajeros platform managed by the national police. Failure to do so can result in fines.
4. Income from short-term rentals must be declared annually. Resident hosts include it as part of their overall income tax return, while non-residents file a separate non-resident income tax return.
5. Certain expenses related to the rental activity, such as mortgage interest, property taxes, insurance, and maintenance costs, can be deducted from the taxable rental income. However, the 60% reduction applicable to long-term rentals does not apply to short-term rentals.

In recent years, Madrid has been increasing enforcement efforts against unregistered short-term rentals and tax evasion. The city conducts inspections and levies substantial fines for non-compliance, which can reach up to €600,000 for severe infractions.

Navigating Madrid's short-term rental taxes can be complex, especially for non-resident hosts. Many find it helpful to consult with a local tax professional experienced in short-term rental taxation to ensure full compliance and avoid potential penalties.

Despite the strict regulations, demand for short-term rentals in Madrid remains high from both tourists and business travelers. By staying informed about tax obligations and keeping accurate records, hosts can operate successful rentals while contributing to the city's efforts to regulate the growing vacation rental market.

Spain Wide Short-Term Rental Rules

In addition to regulations at the regional and municipal level, there are also some nationwide rules that apply to short-term rentals across all of Spain:

1. Short-term rentals are defined as stays of less than 3 months. Rentals exceeding 3 months are considered long-term leases subject to different regulations under the Urban Leasing Act.
2. Hosts must provide a rental contract for all short-term stays. However, this contract does not need to be formally registered with authorities for rentals under 3 months.
3. Within 24 hours of a guest's arrival, hosts must submit the guest's passport information to the Registro de Viajeros platform managed by the national police. This is required for security and monitoring purposes.
4. Income from short-term rentals is considered business income and subject to personal income tax rates ranging from 19% to 47% depending on the host's total taxable income.
5. Non-resident hosts from the EU/EEA are taxed at a flat 19% rate on their net rental income, while non-EU/EEA residents are taxed at 24%.
6. Hosts are responsible for collecting and remitting local tourist taxes, which vary by municipality but are often around €1-3 per person per night.
7. There are proposals for a new nationwide "vivienda de uso turístico" license that all short-term rental properties would need to obtain and display. However, this has faced delays in implementation.

While providing a basic framework, the national rules leave significant leeway for regional governments and municipalities to implement their own specific regulations on issues like zoning, licensing, operational requirements, and taxation of short-term rentals.

Many of Spain's most popular tourist destinations, like Barcelona, Madrid, Valencia, and the Balearic Islands, have enacted stricter local rules in recent years. This is aimed at better controlling the growth of short-term rentals and their impact on housing affordability and overtourism.

However, the sector remains an important part of Spain's tourism economy, valued at over €27 billion annually. By understanding and complying with all applicable rules at the national, regional, and local levels, it is still possible for responsible hosts to operate legal short-term rental businesses across Spain.

Does Madrid Strictly Enforce STR Rules?

Madrid has been increasing enforcement of its short-term rental regulations in recent years, making it one of the stricter cities for Airbnb hosts to operate compared to other parts of Spain.

On forums like Bigger Pockets and Reddit, hosts report that Madrid is actively cracking down on unlicensed and unregistered short-term rentals. Authorities conduct regular inspections and can levy substantial fines starting at €3000 for violations.

One Bigger Pockets user commented: "Madrid used to be relatively Airbnb-friendly a few years ago, but they've really tightened up enforcement lately. I had an illegal rental there that got shut down after an inspection. The fines are no joke if you get caught operating without proper licenses and registration."

Another host on Reddit stated: "I wouldn't recommend trying to do Airbnb under the radar in Madrid these days. They are taking it seriously and will fine you heavily if you're not following all the rules like having your rental licensed, getting a CIR code, reporting guests, etc."

The consensus from experienced hosts seems to be that while it is still possible to operate short-term rentals legally in Madrid by carefully complying with all regulations, the city has become increasingly inhospitable to unlicensed operators.

New restrictions passed in 2019 banned short-term rentals in residential buildings without a separate entrance, severely limiting the number of eligible properties. In 2024, Madrid announced a freeze on issuing new short-term rental licenses along with increased fines of up to €100,000 for the most severe violations.

Some hosts worry that this signals Madrid is headed toward a de facto ban on vacation rentals, similar to policies enacted in cities like New York. However, the demand for short-term stays remains high among tourists and business travelers.

Hosts who take the time to understand Madrid's complex registration process, zoning rules, tax obligations, and operational requirements can still run successful, legal short-term rental businesses. However, the days of easily listing properties on Airbnb in Madrid without proper licensing appear to be over as the city ramps up its enforcement efforts.

How to Start a Short-Term Rental Business in Madrid

If you're interested in starting a short-term rental business in Madrid, Spain, follow these key steps to get started:

1. Research Madrid's short-term rental regulations thoroughly. Madrid requires hosts to register their property, obtain a tourism license number, and follow strict zoning rules like having a separate entrance from residential units. Understand all licensing, tax, and operational requirements.
2. Identify a suitable rental property. Look for ground floor or first floor properties with their own entrance to meet Madrid's zoning rules. Consider factors like location, size, amenities, and potential appeal to your target guests (tourists, business travelers, etc.).
3. Obtain all required licenses and permits. Register your short-term rental activity by submitting the proper documentation to the Madrid City Council. This includes a declaración responsable affirming you meet all legal requirements. Once approved after an inspection, you'll receive your tourism license number.
4. Prepare the property for guests. Furnish and equip the rental space to a high standard. Take professional photos highlighting the amenities. Establish clear house rules and create a digital guidebook with local tips for guests.
5. Get insured. Purchase liability insurance covering civil responsibility and potential damages related to your short-term rental activity, as required by Madrid regulations.
6. Create listings on platforms like Airbnb, Vrbo, and Booking.com. Craft compelling descriptions, use your best photos, and set competitive nightly rates using dynamic pricing tools.
7. Set up systems for guest communication and check-in. Decide how you'll handle inquiries, booking requests, check-in instructions, and any issues during stays. Using a lockbox or smart lock can enable self check-ins.
8. Arrange for cleaning and maintenance services. Identify reliable companies to handle turnover cleaning between stays and regular property maintenance/repairs.
9. Understand tax obligations. You must collect and remit the €3 per night tourist tax to Madrid. Your rental income is also subject to personal income tax rates of 19-47%, which must be filed annually.
10. Stay compliant with guest registration. Within 24 hours of each check-in, you must submit the guest's passport information to the Registro de Viajeros platform managed by Spanish police.

While the requirements are strict, Madrid remains a lucrative market for short-term rentals, given its popularity with tourists and business travelers. Many hosts work with local property managers to ensure full compliance and smooth operations.

By carefully adhering to Madrid's regulations and providing an exceptional guest experience, you can build a successful short-term rental business in one of Europe's iconic cultural capitals. However, be prepared for the rules to potentially evolve as the city aims to balance tourism with livability for residents.

Who to Contact in Madrid about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in Madrid, here are the key contacts and resources:

1. Madrid City Council - Department of Sustainable Urban Development (Área de Gobierno de Desarrollo Urbano Sostenible)

Address: Calle Ribera del Sena 21, 28042 Madrid
Phone: +34 91 480 1680
Email: atencionciudadano@madrid.es
Website: https://www.madrid.es/portales/munimadrid/

2. Madrid Tourism Board (Turismo Madrid)

Address: Plaza de la Cibeles s/n, 28014 Madrid
Phone: +34 91 578 7732
Email: turismo@esmadrid.com
Website: https://www.esmadrid.com/

3. Community of Madrid - Housing Department (Comunidad de Madrid - Consejería de Vivienda)

Address: Calle Alcalá 16, 28014 Madrid
Phone: +34 91 276 5000
Email: vivienda@madrid.org
Website: https://www.comunidad.madrid/

4. Spanish Tax Agency (Agencia Tributaria)

Address: Calle Guzmán el Bueno 139, 28003 Madrid
Phone: +34 91 554 8713
Website: https://www.agenciatributaria.es/

The Madrid City Council's Department of Sustainable Urban Development oversees zoning, licensing, and enforcement for short-term rentals within the city limits. The Madrid Tourism Board can provide guidance on registration requirements and tourism-related regulations.

The regional Housing Department of the Community of Madrid also has some oversight of short-term rental policies. The Spanish Tax Agency can assist with questions related to taxation of rental income.

It's advisable to consult directly with these government offices to get the most current information, as Madrid's short-term rental regulations continue to evolve. Many hosts also choose to work with local property managers or real estate attorneys who specialize in this area to ensure full compliance.

With Madrid increasing restrictions and penalties for unlicensed short-term rentals in recent years, it's critical for hosts to understand all zoning rules, licensing processes, operational requirements, and tax obligations before listing their property. Staying engaged with the proper authorities is key to avoiding costly fines and potential legal issues.

What Do Airbnb Hosts in Madrid on Reddit and Bigger Pockets Think about Local Regulations?

Scanning through discussions on Reddit and Bigger Pockets, it's clear that many Airbnb hosts in Madrid have mixed feelings about the local short-term rental regulations. Here are a few representative viewpoints:

One host on Reddit expressed frustration with the "bureaucratic hassle" of registering their short-term rental and submitting guest information to authorities. They feel the process is overly complex and time-consuming for hosts who are just trying to earn some extra income by occasionally renting out a room in their home.

In a thread on Bigger Pockets, a Madrid host shared that while they understand the need for some regulation, they worry the increasing restrictions will make it too difficult for small-scale hosts to operate profitably. This host believes the rules favor professional operators with multiple properties who can better absorb the compliance costs.

Another Madrid host on Reddit took a more positive view, stating that the regulations, while sometimes burdensome, are necessary to prevent the city from being overrun by tourists and to preserve housing for residents. This host appreciates that the city is trying to strike a balance and hasn't banned short-term rentals outright like some other Italian destinations.

A host on Bigger Pockets expressed confusion over the exact requirements, saying the rules seem to be constantly changing, and it's hard to keep up. They wish the city would provide clearer guidance and a more streamlined process for registration and compliance.

One Reddit user who manages several short-term rental properties in Madrid said they've had to raise prices to cover the increased costs of licensing and tourist tax collection. While they haven't had major issues with compliance, they worry that the higher rates will make their listings less competitive compared to hotels that are exempt from some of the requirements.

Overall, there seems to be a general acceptance among Madrid hosts that some level of regulation is inevitable and necessary. However, many feel the current system is overly complex and places a disproportionate burden on small, occasional hosts compared to larger professional operators.

Hosts appear to be looking for a clearer, more standardized registration process and more guidance from the city on exactly what is required. Some worry that if the rules become too restrictive, renting out their properties on a short-term basis will no longer be viable, taking away a valuable source of income.

At the same time, hosts who are able to comply with the regulations see them as a way to level the playing field and prevent Madrid from being overwhelmed by uncontrolled short-term rental growth. Finding the right balance that allows responsible hosting to continue while still protecting the city's housing stock and livability remains an ongoing challenge that hosts are watching closely.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.