Fines for Illegal Rentals in Spain Reach €800,000

Idealista

Illegal tourist rentals in Spain are becoming increasingly risky for property owners. Renting out property without the required permits can now result in fines of hundreds of thousands of euros. On Ibiza, the fine reached €793,443, while on Mallorca it amounted to €800,000, Idealista reports.

Violations on Ibiza and Mallorca

On Ibiza, a property owner was fined €793,443 for illegally renting out a property to tourists. The local council rejected the owner’s appeals and classified the violation as serious under Balearic Islands Law 12/2017 on urban planning. The fine was calculated under Article 167.4, which provides for a penalty of 50% to 100% of the property’s value when its use is changed without authorization. In this case, the authorities established that a residential property was being used as tourist accommodation and imposed a fine equal to 75% of its value.

In Santa Eulària, local police and tourism inspectors from the Ibiza Island Council sealed a property that had been illegally rented to holidaymakers. Several people involved in promoting the property were named as defendants, including the person who posted the listing on a platform, tenants who participated in renting it out, and two property owners. A €275,000 fine was imposed. The property was sealed to stop the unauthorized tourist activity. Ibiza’s Councillor for Urban Planning, Juan Flores, said the municipality would continue to strengthen controls and take action against illegal tourist rentals.

The Tourism Department of the Mallorca Island Council fined the owner of a building in Palma who had been renting out 10 apartments for short-term accommodation. The fine reached €800,000, or €80,000 per apartment. The administrative proceedings lasted several years. After the decision was issued, the listings were removed from digital platforms.

Other Restrictions on the Spanish Rental Market

In Málaga, a ban on issuing new licenses for short-term rental apartments has been in effect since August 2025. In July 2026, it was supplemented by a three-year moratorium on permits for tourist apartments and hotels on land designated for residential use. The number of tourist apartments in the city has increased by 39% over three years, exceeding 12,600.

In Cantabria, new regional regulations have been introduced, following which owners removed more than 2,000 properties from the rental market. Around 4,000 owners submitted documents to legalize their properties, with about 700 already completing the process. A significant number of the remaining properties still fail to meet the requirements, and sanctions have already been imposed on some owners.

In Barcelona, authorities plan to close around 10,000 tourist apartments by 2028. These are properties with existing licenses that the city does not intend to renew. The municipal government expects the measure to increase the supply of housing for permanent residents.

In Valencia, two years after new regulations were introduced, representatives of the tourism sector called for stronger inspections. Regional authorities say most registered properties comply with the requirements, but some owners continue to operate without the necessary permits. Enforcement remains uneven, as some municipalities have not assumed responsibility for carrying out inspections.

Spain’s Short-Term Rental Market Is Shrinking

In May 2026, more than 341,000 tourist accommodation listings were available on Spain’s largest digital platforms — 10.7% fewer than in the same period of 2025. This was one of the most significant annual declines since monitoring of the market began.

The decline in supply was recorded across all major tourist regions. The sharpest drop was in the Valencia region, with almost 12,000 fewer listings. Andalusia saw a decline of 5,527 properties, Catalonia by 5,546, and the Balearic Islands by 3,057. Madrid, Málaga and Barcelona remain the cities with the largest number of short-term rental properties, with 10,836, 8,288 and 8,231 listings respectively.

International Investment analysts note that rental yields in Spain are declining. At the same time, the authorities are preparing new reforms that would raise VAT on this type of business from 10% to the standard rate of 21%. Currently, owners in many cases are fully exempt from the tax if they do not provide hotel-like services.

As a result, short-term rentals are becoming a less predictable investment vehicle. Tighter regulation and a higher tax burden could increase owners’ costs and reduce property profitability. In addition, in some locations, new restrictions will effectively make it impossible to rent out properties to tourists.