Spain Imposes Fines of up to €500,000 for Illegal Holiday Rentals

As of April 16, 2025, the Balearic Islands have introduced stricter penalties for unauthorized tourist rentals. Under Decree Law 4/2025, the maximum fine has been raised by 25% to €500,000, according to Travel and Tour World. The law aims to cool down the overheated rental market and address the lack of affordable housing for locals.

Fines and Enforcement Mechanisms

The new policy targets owners renting out properties short-term without proper tourist licenses or in violation of rental terms. Fines vary by severity:
- Up to €5,000 for minor infractions (e.g., missing documentation)
- Up to €50,000 for renting in restricted zones or without permits
- Up to €500,000 for repeat or intentional violations, especially in protected areas

Booking platforms such as Airbnb and Booking.com are now required to display registration numbers, and listings without them are deemed illegal.

Only owners and those posting illegal listings are held liable. Tourists are not penalized unless involved in a fraudulent scheme.

Regional Measures on Menorca

As SOM Menorca reports, Menorca has:
- Extended its moratorium on new tourist rental registrations pending tourism capacity review
- Banned short-term rentals in apartment buildings
- Allowed only detached houses under strict conditions

Unused properties that haven’t reported guest activity or paid tourist taxes for 3 years will be removed from the registry by 2027.
The permit exchange system—which allowed owners to take over another’s license slot—has been suspended.

Voluntary Compliance Option

Owners who voluntarily offer their property to the government for social or affordable rental programs for 5 years can have their fines reduced by 80%.

Additionally, the tourist tax will remain unchanged to avoid further pressure on the market during the transition period.

Industry Reactions and Market Outlook

The Majorca Hotel Federation (FEHM) welcomed the reforms, citing the housing shortage and strain on infrastructure. The measures are seen as a step toward increasing long-term rental availability.

However, owner associations like Habtur have expressed concern, arguing that the abrupt changes may hurt private owners’ income and discourage alternative tourism models.

Critics also warn of a rise in underground rentals.

Experts note that this is part of a broader European trend toward stricter regulation. Similar laws have been introduced in Barcelona, Amsterdam, and Lisbon, but the Balearics are now the first Spanish region to combine tougher fines, property-type restrictions, and license restructuring in one package.