Holiday Let vs Long-Term Rental in Marbella: Income, Tax & Hassle Compared

Holiday letting means renting to tourists on nightly or weekly bookings, typically through Airbnb, Booking.com, or a local management company. Legally, this is a Vivienda con Fines Turísticos (VFT) and requires registration with the Junta de Andalucía. Stays are capped at 31 days per booking. Income is seasonal: high season (July, August, Easter, Christmas) delivers 70 to 80% of annual revenue.

Long-term renting means a contract of 12 months or more under the Ley de Arrendamientos Urbanos (LAU), Spain’s residential tenancy law. The tenant pays a fixed monthly rent, typically with an annual CPI adjustment. No tourist licence is needed. The LAU reform of 2019 gives tenants the right to extend for up to five years (seven if the landlord is a company), which provides income security but limits flexibility.

Holiday let scenario: a two-bedroom apartment near the beach in Marbella achieving €150 per night in high season (June to September) and €90 per night in shoulder months, with 65% average annual occupancy. Gross income: approximately €30,000 to €38,000 per year. After management fees (20% if using a company), cleaning (€60 per turnover), platform commissions (3 to 15%), maintenance, and consumables, net income before tax is typically €18,000 to €24,000.

Long-term rental scenario: the same apartment on a 12-month contract at €1,500 per month (€18,000 per year). Management costs are minimal: perhaps €1,200 per year for a property manager to handle tenant queries. Net income before tax is approximately €15,000 to €16,000. The gross yield is lower, but the predictability is higher and the effort is dramatically less.

For non-resident EU owners, both holiday let and long-term rental income is taxed at 19% on net income after deducting allowable expenses (mortgage interest, insurance, IBI, community fees, repairs, management fees, depreciation). For non-EU non-residents, the rate is 24% on gross income with no deductions, making either model significantly less profitable.

Resident landlords have an additional advantage with long-term rentals: the Ley del IRPF grants a 60% reduction on net rental income from long-term lets (contracts of 12 months or more). This means only 40% of your net rental income is taxable. A resident earning €15,000 net from a long-term rental would pay income tax on just €6,000. This deduction does not apply to holiday lets, which is a major factor for owners who become Spanish tax residents.

Holiday lets demand continuous operational attention. Check-ins and check-outs (which in Marbella often happen at inconvenient hours due to flight schedules), cleaning turnovers, laundry, restocking consumables, guest communication, review management, dynamic pricing, and dealing with inevitable complaints about Wi-Fi or air conditioning. Even with a management company handling the operations, you will still be making decisions and approving expenditures weekly.

Long-term rentals require virtually no ongoing management once a good tenant is in place. You collect rent monthly, handle maintenance requests (typically a few per year), and conduct an annual property inspection. Many of our clients manage their long-term rentals from abroad with nothing more than a reliable local plumber and electrician on speed dial. The time investment per year is perhaps 20 hours for a long-term rental versus 200 or more for a self-managed holiday let.

The biggest legal risk for long-term landlords is a non-paying tenant. Spanish eviction proceedings under the LAU can take 6 to 12 months, during which the tenant can remain in the property. Requiring two months’ deposit (fianza) plus a bank guarantee mitigates this, but the risk is real. The 2019 LAU reform also mandates minimum 5-year contract durations, meaning you cannot easily recover the property for personal use without specific legal grounds.

Holiday let risks are different: regulatory changes can make your investment model illegal overnight (as happened in Barcelona), community votes can ban tourist rentals with a 60% majority, and seasonal income variability means an empty month costs you proportionally more. The compensating advantage is flexibility: you can use the property yourself, adjust pricing, and exit the rental market with no notice period.

Two-bedroom apartments in tourist-heavy areas (Puerto Banús, Marbella old town, beachfront complexes) are the strongest holiday let performers. They attract couples and small families on week-long stays, generate high per-night rates in summer, and have manageable cleaning turnover costs. Larger villas (4+ bedrooms) can work as holiday lets but require higher nightly rates to cover running costs, and the guest pool at €500 to €1,000 per night is smaller.

For long-term rentals, family-sized properties near international schools (San Pedro, Nueva Andalucía, the New Golden Mile) are in highest demand. Three-bedroom apartments and townhouses attract families relocating for 1 to 3 years, often on corporate contracts with guaranteed income. Luxury villas in La Zagaleta or Sierra Blanca can command €8,000 to €25,000 per month on long-term contracts but the tenant pool is very small and vacancy periods between tenants can be long.

If you are a non-EU non-resident, long-term rental is almost always better because the 24% gross tax rate on holiday let income (with no deductions) eats too heavily into your returns. If you are an EU resident or planning to become Spanish tax resident, the 60% deduction on long-term rental income makes that model very tax-efficient. If you are an EU non-resident who wants maximum gross income and is prepared to manage actively (or pay 20% to a management company), holiday lets in the right location still deliver higher absolute returns.

The hybrid model, letting to tourists in summer and on a short-term basis in winter, is legally problematic. The Junta treats any tourist stay under 31 days as requiring VFT registration, and the LAU minimum contract duration means genuine long-term tenants cannot be asked to leave for the summer. Choose one model and commit to it.