Renting and Landlording on the Costa del Sol in 2026: VFT, Long-Term Lets, Tax and the Complete Owner's Guide

A Costa del Sol owner deciding how to rent out their property in 2026 faces three distinct letting routes, each with its own legal regime, tax treatment and income profile. The choice between a long-term residential let (vivienda), a seasonal contract (temporada) and a tourist let (VFT) determines tenant security, rent update rules, registration requirements and the tax the owner pays. This guide organises the full decision, from Andalusia’s three-layer VFT authorisation to non-resident tax on Modelo 210, with notarial price context per municipality to anchor yield calculations.

What are the three ways to rent out a Costa del Sol property?

A Costa del Sol owner can choose between a long-term vivienda contract under LAU Title II (five-year minimum, tenant security, IRAV-capped rent updates), a temporada seasonal contract under LAU Title III (freely agreed terms, one-year maximum, no security of tenure), or a tourist let (VFT) governed by Andalusia’s Decreto 28/2016 as modified by Decreto-ley 1/2025 and the LPH community vote. Each route has a distinct registration path, tax regime and income profile.

The table below sets out the decision at a glance. The key trade-off is control versus income: a vivienda locks the owner into a multi-year commitment but delivers stable income and tax incentives; a VFT maximises nightly revenue but carries vacancy risk, regulatory burden and the community-veto threat; a temporada splits the difference for owners who want to use the property part of the year.

Feature	Vivienda (long-term)	Temporada (seasonal)	VFT (tourist let)
Legal basis	LAU Art 9, Title II	LAU Art 3, Title III	Decreto 28/2016 + DL 1/2025 + LPH Art 7.3
Minimum duration	5 years (7 if company landlord)	None	None (per booking)
Maximum initial term	Freely agreed, auto-extends to 5	1 year	Per booking
Tacit renewal	3 further years (LAU Art 10)	None	None
Rent update cap	IRAV (2.44 per cent, Jun 2026)	Freely agreed	Per booking
Deposit	1 month (LAU Art 36)	Freely agreed	Platform holds
Registration needed	Contract only	Contract only	RTA + town hall + community
Tax: Spanish resident	IRPF, 60 per cent reduction	IRPF, standard	IRPF, standard
Tax: EU/EEA non-resident	19 per cent net, Modelo 210	19 per cent net, Modelo 210	19 per cent net, Modelo 210
Tax: non-EEA non-resident	24 per cent gross, Modelo 210	24 per cent gross, Modelo 210	24 per cent gross, Modelo 210
Tenant security	High (mandatory extension)	Low (fixed term)	None (guest stays)
Income profile	Stable, lower monthly	Flexible, medium	High nightly, vacancy risk

For the detailed mechanics of each contract type, see our guide to rental contract types in Spain, and for the full tenancy law framework, the Spanish Tenancy Law (LAU) guide.

How does a long-term residential let work on the Costa del Sol?

A vivienda (habitual residence) contract under LAU Article 9 runs for a freely agreed initial term, extended by mandatory annual rollovers until it reaches five years, or seven if the landlord is a company. After that, a three-year tacit renewal period applies under Article 10 unless either party gives notice. Rent updates are capped by the IRAV index (2.44 per cent for June 2026, published by INE on 15 July 2026), and a one-month deposit is mandatory under LAU Article 36.

The five-year minimum is the central fact a Costa del Sol owner must weigh. If you sign a one-year vivienda contract, it auto-extends year by year until it reaches five. The tenant can leave after six months with 30 days notice (Article 11), but the landlord cannot recover the property before five years unless the contract includes the personal-need clause under Article 9.3 (need for the owner or a first-degree relative to occupy the dwelling), which itself requires a two-month notice period and only takes effect after the first year.

Rent updates under the LAU are now governed by the IRAV (Indice de Referencia para la Actualizacion de Arrendamientos), introduced by the disposicion adicional septima of Ley 12/2023 to replace the CPI as the cap. The June 2026 IRAV stands at 2.44 per cent, meaning a landlord with an explicit update clause in the contract can raise the rent by at most 2.44 per cent at each anniversary. Without an explicit clause, no update applies. For the full update mechanics and the stressed-zone rent limits under Ley 12/2023, see our guide to rent increase rules in Spain.

The deposit (fianza) of one month’s rent is deposited with the Junta de Andalucía’s housing authority, not held privately. Andalusia manages its own deposit scheme under Decreto 14/2012. For the deposit rules in detail, see our guide to the rental deposit (fianza) in Spain.

The tax incentive for Spanish tax residents is significant: Article 23.2 of the LIRPF (Ley 35/2006) applies a 60 per cent reduction to net rental income from housing let as the tenant’s primary residence. A resident landlord earning 12,000 EUR in net annual rent pays IRPF on only 4,800 EUR, making the effective rate on qualifying rents roughly 8 to 11 per cent depending on the bracket. This reduction does not apply to temporada or VFT income, which is taxed at the full IRPF rate.

What does it take to short-let a property in Andalusia in 2026?

Short-letting (VFT) in Andalusia requires three independent authorisations stacked on top of each other: Junta de Andalucía registration in the Registro de Turismo de Andalucía under Decreto 28/2016 as modified by Decreto 31/2024, a town-hall licence or declaracion responsable under Decreto-ley 1/2025 Article 6, and no block from a 3/5 community vote under LPH Article 7.3 (in force 3 April 2025). Málaga city has suspended new VFT licences for up to three years.

The first layer is the RTA registration. The owner files a declaracion responsable with the Registro de Turismo de Andalucía, providing the property’s capacity, address and operating details. The RTA issues a registration number that must appear on all advertising. Under Decreto 31/2024 (January 2024), the regime tightened: capacity limits, mandatory information display, and a requirement to register before advertising on any platform. The tourist licence application guide for Andalusia covers the full process.

The second layer is town-hall authorisation. Decreto-ley 1/2025 (24 February 2025, BOJA 41 of 3 March 2025) gave Andalusian municipalities the power to require a specific licence or declaracion responsable for tourist use, and to suspend new VFT authorisations for up to three years while drafting urban plans. Málaga city exercised this power: its suspension of new VFT licences entered force in 2025 and runs for up to three years. The city identified 53 barrios with residential tourism pressure above 8 per cent, up from 43 the previous year. Other Costa del Sol municipalities (Marbella, Estepona, Mijas) have not yet imposed equivalent suspensions but retain the power to do so.

The third layer is the community vote. Article 7.3 of the Ley 49/1960 de Propiedad Horizontal, inserted by Disposicion Final cuarta of Ley Organica 1/2025 (in force 3 April 2025), allows the comunidad de propietarios to limit or condition the tourist use of a dwelling by a 3/5 majority of all owners representing 3/5 of the ownership quotas. Properties with VFT registration predating 3 April 2025 are not retrospectively blocked, but new registrations must clear this hurdle. In practice, communities across the Costa del Sol are increasingly voting to restrict tourist lets, making this the binding constraint for many owners. For the full VFT rules, the sanction scale (fines up to 150,000 EUR under Article 78 of Ley 13/2011 del Turismo de Andalucía), and the community-vote mechanics, see our guide to Costa del Sol short-let rules.

Operating without all three authorisations carries real risk. Clandestine tourist activity is classified as a grave infraccion under Article 71.1 of Ley 13/2011, with fines from 2,001 to 18,000 EUR, escalating to 150,000 EUR for the most serious cases.

What is a temporada contract and when does it fit?

A temporada (seasonal) contract falls under LAU Title III for use distinct from habitual housing: freely agreed terms, a maximum one-year duration, no mandatory extension, and no IRAV rent cap. It suits owners who want to occupy the property part of the year and let it during specific seasons, but it offers no tenant security of tenure and the tenant can vacate at term end without notice.

The temporada route is the least regulated of the three, which is both its appeal and its risk. The landlord sets the rent, the duration (up to one year) and the terms freely. There is no mandatory extension, no IRAV cap, and no tenant security beyond the agreed term. The deposit is also freely agreed, though many owners follow the two-month standard for non-housing lets under LAU Article 36.

The risk is misclassification. If a tenant can demonstrate that the temporada contract is in reality their habitual residence (they have empadronamiento at the property, no other home, their children attend local schools), a court may reclassify it as a vivienda contract, retroactively applying the five-year minimum and the IRAV cap. The DGSJFP and the Tribunal Supremo have repeatedly warned against temporada contracts used to circumvent tenant protections. For a owner who genuinely uses the property for part of the year and lets it for a defined season (for example, letting a Marbella apartment from October to April while living elsewhere), the temporada route is legitimate. For an owner who never occupies the property and wants to avoid vivienda security, it is a legal exposure.

How are rental earnings taxed for Costa del Sol landlords?

Spanish tax residents declare rental income in their IRPF and can claim a 60 per cent reduction on net income from long-term housing lets under Article 23.2 of the LIRPF, making the effective rate on qualifying rents roughly 8 to 11 per cent. Non-residents file Modelo 210: 19 per cent on net income for EU/EEA residents, 24 per cent on gross for non-EEA, with annual filing since 2024 and modified deadlines under Orden HAC/623/2026 from tax year 2026.

The resident landlord’s calculation is straightforward. Gross rental income minus deductible expenses (IBI, community fees, insurance, management costs, repairs, mortgage interest on the purchase loan) gives the net income. The 60 per cent reduction applies to the net figure if the property is let as the tenant’s primary residence and the contract meets LAU vivienda requirements. The remaining 40 per cent is added to the landlord’s other income and taxed at the marginal IRPF bracket.

The non-resident landlord faces a steeper bill. EU and EEA tax residents pay 19 per cent on net rental income, claiming the same deductible expenses as a resident. Non-EEA residents pay 24 per cent on gross rental income with no deductions, a distinction rooted in the IRNR regime (Ley 41/1998 and subsequent reforms). A UK landlord post-Brexit, for example, falls into the 24 per cent gross bracket, meaning a property generating 18,000 EUR in annual rent produces a 4,320 EUR tax bill with no offset for the IBI, community fees or management costs that an EU resident could deduct.

Since 2024, non-resident rental income can be filed annually rather than quarterly, with the deadline set at 1 to 20 January of the following year for income earned in the previous tax year. Orden HAC/623/2026 (BOE-A-2026-13573, 12 June 2026) modified the Modelo 210 filing deadlines further from tax year 2026, aligning rental income declarations with the first quarter of the following year. For the full filing mechanics, deductible expenses and the annual-versus-quarterly decision, see our guide to renting out your Spanish property as a non-resident.

The IAE (Impuesto de Actividades Economicas) is a separate question. Under Article 82.1.c) of the Ley Reguladora de las Haciendas Locales, rental activity with gross revenue below 1,000,000 EUR is exempt from the IAE, meaning the vast majority of individual Costa del Sol landlords do not pay it. Habitual, organised letting activity above the threshold triggers registration and payment. For the IAE mechanics and the boundary between personal letting and business activity, see our guide to the IAE for landlords in Spain.

Short-let landlords face an additional layer: VAT (IVA). Tourist rental services are currently subject to 10 per cent IVA (the reduced rate for accommodation), though a July 2026 housing decree proposed raising this to 21 per cent. The DGT consultation V0385-26 (25 February 2026) addressed the IVA treatment of tourist rental services. For the IVA framework and the 21 per cent proposal, see our guide to VAT on tourist rentals in Spain, and for the Modelo 210 filing specific to short-lets, the short-let rental tax compliance guide.

What rental yields can a Costa del Sol landlord expect?

Net rental yields on the Costa del Sol typically range from 3.5 to 6.5 per cent depending on area, property type and letting regime, based on Tinsa and INE market data. The notarial closing prices by municipality provide the capital base for this calculation, and the table below gives the median registered notarial price per municipality across the covered zones (Consejo General del Notariado, 2026-07).

Municipality	Median all-types EUR/m2	Median apartment EUR/m2	Median villa EUR/m2	Covered zones
Benahavís	4,543	3,757	5,419	11
Marbella	4,279	4,091	4,352	62
Fuengirola	3,494	3,538	3,198	11
Torremolinos	3,287	3,290	2,786	11
Estepona	3,267	3,065	3,538	36
Benalmádena	3,000	2,965	3,068	18
Sotogrande (San Roque)	2,959	2,411	3,276	8
Casares	2,835	2,714	2,777	4
Mijas	2,527	2,793	2,867	18
Manilva	2,509	2,382	3,198	6

These are registered notarial closing prices, the median across each municipality’s covered zones. They reflect actual transaction values, not asking prices, which is why they are the correct denominator for yield calculations. A Marbella apartment at the median apartment price of 4,091 EUR/m2 (roughly 286,000 EUR for a 70 m2 unit) let at 1,200 EUR/month generates roughly 14,400 EUR/year, a 5.0 per cent gross yield before management, IBI and community costs. The same apartment short-let at 100 EUR/night with 60 per cent occupancy generates 21,900 EUR/year, a 7.7 per cent gross yield, but with higher management costs, vacancy risk in the off-season, and the full VFT regulatory burden.

The Tinsa IMIE Mercados Locales Q2 2026 (published 30 June 2026) recorded a 15.2 per cent year-on-year rise in Spanish house prices, the highest since the third quarter of 2006, providing the macro context for capital appreciation alongside rental income. A landlord on the Costa del Sol in 2026 is earning yield on a capital base that is itself appreciating, which compounds the total return but also raises the entry cost for new investors.

What are the holding costs for a Costa del Sol rental property?

A non-resident landlord on the Costa del Sol pays annual IBI (Impuesto sobre Bienes Inmuebles, typically 0.4 to 1.1 per cent of cadastral value), community fees (cuota de comunidad), non-resident imputed income tax on the property’s cadastral value via Modelo 210 when the property is vacant, and optional costs such as property management, insurance and rent default cover.

IBI is the largest recurring holding cost. The rate is set by each municipality within the bounds of the Ley Reguladora de las Haciendas Locales: 0.4 to 0.73 per cent for urban property generally, rising to 1.1 per cent where the cadastral value has not been revised in the revision period. Marbella and Estepona cadastral values were last revised in 2012, so the higher rate often applies. A property with a cadastral value of 150,000 EUR might pay 1,200 to 1,650 EUR per year in IBI.

Community fees vary widely. A beachfront apartment in a complex with pool, gardens and 24-hour security can pay 150 to 300 EUR/month. An inland apartment in a basic community might pay 40 to 80 EUR/month. These fees are non-negotiable and accrue regardless of whether the property is let.

Non-resident imputed income tax applies when the property is not rented. EU/EEA residents pay 19 per cent of 2 per cent of the cadastral value (3.8 per cent of cadastral value as the tax base, then 19 per cent on that). Non-EEA residents pay 24 per cent of 1.1 per cent of cadastral value (or 2 per cent if the cadastral value has not been revised). When the property IS rented, the rental income tax replaces the imputed income tax, but owners must file for any vacant periods. For the full holding-cost framework, see our guide to annual property taxes for non-residents.

How do I manage a rental property from abroad?

Non-resident landlords on the Costa del Sol typically engage a property management company for 15 to 25 per cent of rental income, handling tenant sourcing, check-in, maintenance and tax filings. A fiscal representative is mandatory for non-EU owners and optional for EU/EEA, and rent default insurance covers approximately 4 to 8 per cent of annual rent as a premium.

The seasonal calendar drives the management strategy. Peak season (June to September) commands the highest nightly rates for VFTs but concentrates turnover, cleaning and maintenance demand into four months. Shoulder season (April to May, October) attracts longer-stay tourists and temporada tenants. Low season (November to March) is when long-term vivienda demand peaks, as year-round residents seek housing and the competition from tourist lets drops away. An owner who switches between VFT in summer and vivienda in winter must manage two regulatory regimes simultaneously, which is where a management company earns its fee.

Rent default insurance (seguro de impago) is available from Spanish insurers and covers the landlord against tenant non-payment, typically for 4 to 8 per cent of the annual rent as a premium. It is distinct from rent default insurance for long-term lets, which covers extended non-payment and legal costs. For short-lets, the platform (Airbnb, Booking) holds the payment in escrow, reducing the default risk but not eliminating cancellation risk.

A fiscal representative is mandatory for non-EU/EEA tax residents and handles all Modelo 210 filings, correspondence with the AEAT, and tax record-keeping. EU/EEA residents can file directly but many still use a representative for convenience. Management companies often bundle fiscal representation with their service. For the full management landscape, fees and service tiers, see our guide to property management companies in Spain.

If a long-term tenant stops paying, the express eviction process under LEC Article 44 provides a faster route than the pre-2018 regime, but still takes several months in practice. For the eviction timeline and landlord rights, see our guide to the eviction process in Spain.

The bottom line for Costa del Sol landlords in 2026

The letting decision on the Costa del Sol in 2026 is not just about rent versus purchase price. It is a three-way choice between stability (vivienda, with its five-year commitment, IRAV cap and 60 per cent IRPF reduction), flexibility (temporada, with its one-year maximum and no security) and maximum revenue (VFT, with its three-layer authorisation, community-veto risk and Málaga suspension). The tax treatment differs at every step: residents get the IRPF reduction on vivienda income, non-residents face the 19 per cent versus 24 per cent split, and short-let landlords must navigate IVA on top of IRNR. The notarial closing prices by municipality give the only reliable capital base for yield calculations, because asking-price portals reflect aspiration, not cleared transactions.