Can Foreigners Still Profit From Investing in Spain’s Airbnb Market?

For years, Spain was one of the easiest places in Europe to buy a seaside apartment, place it on Airbnb, and generate attractive rental income. But the landscape has been changing rapidly.

So, can foreigners still legally and profitably operate one?”

The short answer is: yes — but location, regulation, and strategy now matter more than ever.

Spain remains one of the world’s tourism powerhouses. The country welcomed record tourist numbers again recently, while hotel occupancy and hotel pricing continue rising strongly.  

At the same time, hotel supply growth has been relatively limited in many prime destinations. Savills estimates Spain has around 900,000 hotel rooms nationwide with relatively modest recent growth, despite continuously rising tourism demand.  

This imbalance between tourism demand and accommodation supply helped fuel the explosion of short-term rentals over the past decade. In Spain’s top 50 tourist destinations, short-term tourist rentals reportedly grew 25% in just two years, far outpacing hotel-room growth.  

Beyond tourism alone, Spain is also experiencing one of the largest immigration waves in modern Europe. According to Spain’s National Statistics Institute (INE), the country recorded net external migration of more than 626,000 people in 2024, while the foreign-born population has now exceeded 10 million for the first time in history.  

This matters for the rental market because many newcomers — including professionals, digital nomads, students, relocated families, and newly arrived migrants — typically require temporary accommodation before securing long-term housing. In practice, this has created strong demand not only for classic holiday rentals, but also for flexible medium-term and short-term stays in major cities and coastal regions. Spain’s new short-term rental regulations themselves now explicitly recognise that temporary rentals may include stays related to work assignments, study periods, relocation, or medical treatment — not just tourism.  

This partly explains why, despite tighter Airbnb regulations and political pressure, demand for short-term accommodation across Spain remains exceptionally resilient. However, this success also created political and social pressure.

Spain’s Airbnb Crackdown Is Real — But It Is Not a National “Ban”

One of the biggest misconceptions today is that Airbnb has been banned in Spain. That is simply not true.

What is happening instead is a major regulatory tightening targeting:

·       illegal tourist rentals,

·       unlicensed apartments,

·       and excessive tourist concentration in already saturated urban centres.

Cities such as Barcelona, Madrid, and parts of Valencia are becoming significantly more restrictive. Barcelona plans to phase out all existing tourist apartment licences by 2028, while Madrid increasingly limits tourist rentals in central residential areas.  

Spain has also intensified enforcement nationally:

·       tens of thousands of listings have been targeted,

·       stricter registration systems introduced,

·       and Airbnb itself has faced massive fines related to allegedly illegal listings.  

As a result, Spain’s property market is increasingly splitting into two realities:

1.    highly restricted prime urban centres,

2.    and secondary coastal or lifestyle towns where opportunities still exist.

The Opportunity Has Shifted — Not Disappeared

Ironically, tighter regulations in Madrid and Barcelona are pushing many investors toward smaller coastal markets where:

·       entry prices remain far lower,

·       tourism demand is still strong,

·       and licensing may still be achievable.

This is where many international buyers are now focusing.

Places such as:

·       Cullera,

·       Gandía,

·       Denia,

·       Torrevieja,

·       and parts of Costa Blanca

continue attracting attention because they combine:

·       beach lifestyle,

·       lower purchase prices,

·       domestic + international tourism,

·       and relatively attractive rental yields.

For example, a two-bedroom apartment with sea views in Cullera — a popular beach town just 30 minutes from Valencia — can still be found for around €180,000.

During the peak summer months of July and August, such a property can easily achieve short-term rental rates of around €120 per night. For the remaining 10 months of the year, it could still generate stable long-term rental income of at least €1,200 per month.

Even after deducting the typical Airbnb management fee of around 15%, the property could still potentially deliver a gross rental yield close to 10%.

How Difficult Is It to Obtain a Tourist Licence?

This depends heavily on:

·       the autonomous region,

·       the city,

·       the building,

·       and even the homeowners’ association.

In regions such as the Valencian Community, tourist rentals generally require:

·       urban compatibility approval,

·       registration with the regional tourism authority,

·       compliance declarations,

·       safety/habitability requirements,

·       and increasingly, homeowners’ association compatibility.  

In non-restricted zones, these requirements are largely procedural and still manageable.

Foreigners’ “Buy-to-Rent” in Spain

In practical terms, there is generally not a major difference between buying property as a foreigner versus as a Spanish resident. Foreign buyers can purchase freehold property directly in their own names, obtain mortgages from Spanish banks, and legally operate licensed tourist rentals if local regulations permit.

There are, however, some tax differences for non-residents.

For example:

· non-resident EU/EEA owners are generally taxed at 19% on net rental profits,

· while non-EU residents are generally taxed at 24% on gross rental income without the same deductible expense treatment. (agenciatributaria.gob.es)

But overall, Spain remains considerably more accessible for foreign property investors compared with several other European destinations.

What has changed dramatically, however, is the investment environment itself.

During much of the past five years, Spain’s residential market experienced strong broad-based appreciation. Nationwide average property prices have risen significantly since the pandemic, with some coastal and prime urban areas recording cumulative increases well above 25–35% depending on location. (idealista.com)

At the same time, Spain has remained one of Europe’s stronger rental-yield markets, with gross rental yields in many areas commonly ranging around 5–7%, while certain well-positioned short-term holiday rentals can generate considerably higher seasonal returns. (globalpropertyguide.com)

But the era when investors could simply “buy almost anything” and expect easy appreciation is gradually fading.

Today, success increasingly depends on:

· choosing the right micro-location,

· understanding local regulations,

· and identifying secondary coastal markets where entry pricing remains relatively affordable while tourism demand continues growing.

In other words:

the opportunity in Spain has not disappeared — it has become more selective.