Are you thinking of investing in a holiday home in Spain, but wondering about the new rules for holiday rentals in Malaga? In this exclusive interview, the Rincón team interviewed Francisco Javier Toro Díaz of Toro Abogados to break down the legal basics of buying holiday rental property on the Costa del Sol. From updated tourist rental rules to common legal pitfalls, and how to avoid them, this article offers expert guidance for anyone buying property in Malaga for personal use, rental income, or both. The good news? With the right guidance and due diligence, the Costa del Sol is a safe and profitable place to invest.
👉 Also check out our latest guide to NRA 2026 registration rules HERE.
What are the most important legal requirements for foreigners when buying a second home on the Costa del Sol?
The Costa del Sol continues to be one of the top destinations for foreign buyers seeking a second home, especially citizens from Europe, Saudi Arabia, Kuwait, and recently, China. However, it’s essential that buyers understand the Spanish legal framework and follow the necessary legal steps to ensure a safe and compliant transaction. The first and most important recommendation is to seek independent legal advice from a qualified lawyer—someone not affiliated with the estate agent or property developer. The key legal steps include:
1. Foreigner Identification Number (NIE)
All foreign buyers must obtain an NIE (Número de Identificación de Extranjero) prior to purchasing property in Spain. This is required for any legal or tax-related action, including buying real estate. It can be requested via the Spanish Consulate in the buyer’s home country or in person at a National Police Station in Spain. The process is often simplified by granting power of attorney to a lawyer to do this for you.
2. Spanish bank account
While not obligatory, opening a Spanish bank account is highly recommended as most payments during the buying process—reservation fees, deposits, taxes, utility bills—must be made through a Spanish bank. The buyer will also need to provide tax documentation to the bank.
3. Legal due diligence on the property
Before committing to any contract, thorough legal due diligence is essential. This includes:
- Verifying ownership and any existing charges or encumbrances with the Land Registry.
- Checking the urban planning and legal status of the property.
- Confirming there are no outstanding debts on the property (e.g. council tax, community fees).
- Verifying the legality of any extensions or modifications.
This process should always be handled by an independent property lawyer. Urban planning regulations, especially in areas like Marbella and inland municipalities, can be complex—so this step is critical.
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4. Reservation and deposit contract (“Contrato de Arras”)
It’s common practice to sign a private deposit contract (“contrato de arras”) with a 10% down payment. This contract must be drafted by a lawyer and clearly outline deadlines, conditions, and consequences of breach by either party.
5. Public deed and registration
The final transaction must be completed before a notary and registered at the Land Registry. The buyer can attend in person or through a notarised and apostilled power of attorney.
6. Property taxes and administrative fees in 2025
Property tax varies, depending on whether the property is a new build or a resale. Depending on this, you could be liable for one tax or another (not both):
- Tax for newly built properties: 10% VAT + 1.2% Stamp Duty (AJD) in Andalucía.
- Tax for resale properties: 7% Transfer Tax (ITP) in Andalucía (2025 rate).
In addition to the property tax above, buyers should also budget for additional costs such as notary fees, Land Registry charges and administrative costs—these typically add up to around 10% of the purchase price.
7. Legal and tax representation
Buyers who are not Spanish residents are strongly advised to appoint a legal and tax representative in Spain. This person handles administrative matters, tax payments, and communication with public bodies. Buyers also need to declare their ownership annually via the non-resident tax form (Model 210), even if no rental income is earned.
8. Anti-money laundering regulations
Spain enforces strict EU anti-money laundering laws. Buyers must justify the source of the funds used to buy the property. Banks, notaries and lawyers are legally obliged to verify this—especially for amounts over €100,000. All payments must be traceable (e.g. via bank transfer from the buyer’s own account).
9. Other considerations
- Home and liability insurance: Not legally required, but strongly advised.
- First Occupancy Licence: In newly built properties, this is necessary for connecting utilities. It is also required for short-term rentals.
- Short-term rental regulations: The property must comply with Andalusian tourism laws and be registered with the Junta de Andalucía for tourist rentals.
What advice would you give someone looking to invest in a holiday let? What about the rules for holiday rentals in Malaga?
Firstly, it’s important to understand that short-term letting is a very common and profitable investment in Malaga. However, due to the growing popularity of tourist rentals and the resulting shortage of long-term housing, some social pressure has led to tighter controls and regulations in the rules for holiday rentals in Malaga.
1. Confirm zoning and community rules
Before buying, make sure:
- The residents’ community hasn’t voted on bylaws that prohibit holiday letting. Recent legal reforms to the rules for holiday rentals in Malaga, now allow residents’ communities to limit or ban short-term rentals with a qualified majority. Please see this article for more details.
- The property has a valid First Occupancy Licence or equivalent.
- The land classification allows for tourist use (particularly important for rural or protected plots).
2. Mandatory registration with the Tourism Registry of Andalucía
Under Decree 28/2016, modified by Decree 13/2020, anyone offering short-term rentals must register the property with the Junta de Andalucía. This registration requires a responsible declaration and brings several obligations.
3. Compliance with technical and quality standards
The property must meet minimum standards, such as:
- First Occupancy Licence or equivalent document.
- Adequate furnishings and equipment.
- Air conditioning (May–Sept) and heating (Oct–April).
- First aid kit, complaint forms, tourist information.
- Cleaning before each guest’s arrival.
- Visible instructions for appliances and house rules.
Failure to comply with these requirements can lead to fines.
4. Tax and fiscal obligations
Holiday rental income is taxable for both residents and non-residents:
- Non-residents must declare income via Model 210.
- Companies must declare profits under corporate tax rules.
- VAT applies only if hotel-like services are offered (e.g. breakfast, daily cleaning).
- Otherwise, no VAT, but income must still be declared.
- Additional tax filings may apply if staff are hired or extra services are provided.
5. Traveller registration
One of the important rules for holiday rentals in Malaga is that owners or managers must register as hospitality providers with the National Police and file guest information in accordance with citizen security regulations.
6. Appoint a property manager if you live abroad
If the owner lives outside Andalucía, it’s strongly advised to work with a legally registered property management company. This ensures proper handling of guest services, maintenance, cleaning, check-in/check-out, and tax declarations.
7. Additional licences in certain municipalities
Some areas, like Malaga, Marbella, Seville and Granada, are implementing extra municipal regulations in 2025. These may include additional permits, restrictions by zone, or minimum distance requirements between holiday lets. Always check the local urban plan before buying.
8. New NRA Registration Rules July 2025
Every new and existing short-term rental in Spain that is advertised online, must now be added to a national holiday rental registry. For the latest July 2025 NRA registration changes, please see this article.
Browse Holiday Homes Ready for Rental in Málaga & Costa del Sol
Browse holiday homes ready for rental in Malaga & Costa del Sol
Whether you’re planning to invest or simply exploring your options, take a look at our holiday homes on the Costa del Sol.
What are the most common legal mistakes foreign buyers make?
The most common mistake I see is not hiring an independent lawyer. Some buyers rely on the estate agent or intermediary, assuming shared language or nationality guarantees trust. This can create a conflict of interest where agents want a quick sale, but not necessarily a secure one.
Buying a property is one of the biggest decisions you’ll ever make, one where you can’t afford to take risks. Think of it like getting on a plane: what gives you peace of mind isn’t just the aircraft itself, but the experience of the pilot. You want someone with hours and hours of flight time. Choosing a lawyer is no different. Experience matters.
In your opinion, is the Costa del Sol still a good place to invest in a holiday home, considering the new rules for holiday rentals in Malaga?
From both a legal and strategic standpoint, absolutely yes. The region offers:
- Strong legal security backed by Spain’s property registry and legal system.
- The ability to act through a representative, making it easy for non-residents.
- Year-round tourism thanks to its climate, airport, infrastructure, and lifestyle.
- A legal framework that, while tightening, still allows individuals to profit from short-term rentals if they meet the requirements.
With the right guidance and due diligence, the Costa del Sol is a very safe and profitable place to invest.
What services do you offer to property investors?
We bring over 20 years of legal and real estate expertise on the Costa del Sol, with more than 1,000 successful property transactions in Malaga alone. Remember the comparison with pilots? Just like you wouldn’t board a plane with an inexperienced pilot, choosing the right lawyer is all about flight time; real experience that gives you confidence. At Toro Abogados, we don’t just know the law, due to our long-standing experience, we also know the local market and how to guide you safely through the process.
Conclusion: Rules for Buying a Holiday Rental in Malaga
When it comes to the rules for buying a holiday rental in Malaga, the key to success lies in careful planning and professional guidance. Investing in a holiday home on the Costa del Sol remains one of the most attractive and profitable decisions for those seeking both stability and quality of life. With the right legal advice, thorough due diligence, and expert property management, you can minimise risks and take full advantage of everything the Malaga real estate market has to offer. Whether for personal enjoyment or as a holiday rental investment, this region continues to be a safe and rewarding choice for both national and international investors.
