Buying a holiday home on the Costa del Sol, by the palm-lined beaches of Marbella, the manicured golf resorts of Estepona or the harbour-side cocktail bars of Puerto Banús, is, for some, the perfect way to enjoy life in retirement.
Letting your property out to other holidaymakers when you are back in the UK can help to cover your monthly running costs and even generate an income.
But unless you understand Spain’s new rules allowing regional governments, local councils (known as municipalities) and even communities of property owners to restrict or block holiday lets, your short-term rental strategy could prove short-lived.
Telegraph Money’s guide explains how to buy a holiday home on the Costa del Sol to create a lasting income, rather than a headache.
Making the right investment
The 150km strip of coastline known as the Costa del Sol lies within the Málaga province in the region of Andalucía. It first became popular with British holidaymakers in the 1970s when the birth of the package holiday brought destinations such as Torremolinos and Fuengirola within the budget of everyday working people.
Now, it’s the luxury of resorts such as Marbella and Benahavis that entice foreigners to splash out on a holiday home. Overseas buyers accounted for 42.9pc of transactions in Malaga province, rising to over 60pc in Marbella and more than 80pc in Benahavis, according to data from the Notaries updated last month.
The British have been the single largest group of international buyers in the province of Málaga for decades, said Sean Woolley, co-author of Home Truths: A candid analysis of the Costa del Sol property market.
They consistently represent 15-20pc of foreign transactions, he said.
Those looking to invest in property to make money have four options:
- 100pc short-term rental investment that you only let to holidaymakers with no personal use. Professional management is advisable.
- Long-term rental to non-holidaymakers for 12 months or longer – not affected by tourism restrictions.
- Flipping – buying a property in need of work, fixing it up and selling it at a higher price. It helps to set up a Spanish company that predominately deals in property, which allows you to purchase homes at a reduced rate of tax for homes worth up to €500,000.
- Hybrid option – using the property for a combination of personal use and letting to holidaymakers.
“The biggest of our overseas markets is the hybrid model,” said Mr Woolley.
“People like the jet-set lifestyle. When their pad in Marbella isn’t being let for the weekend they fly down and enjoy it. The hybrid model gives them that flexibility.”
Letting the property out for 10 weeks a year typically covers the property’s running costs and community fees, the equivalent of council tax. Renting it out for 20 to 25 weeks is where you can make “decent money,” said Mr Woolley, and the property becomes self-financing.
Weekly rents, he said, can range from €700 to €1,300 in Casares/Manilva, and up to €2,000-€5,000 in Marbella Golden Mile/Nueva Andalucía.
Barbara Wood, director of buying agents The Property Finders, said it’s a good idea to make your holiday home available to paying guests throughout most of the high season to cover your running costs. If your objective is to earn an income, take the view that all weeks are available to holidaymakers, and only use it yourself when it’s free.
Tourism rules and restrictions in Spain
In July 2025 the Spanish government made it a legal requirement for all owners of holiday lets to apply for a unique national registration number that links the property and owner to a central database. This number must be clearly displayed on any listings or platforms you use to advertise your property, such as Airbnb or Verbo.
To be awarded a registration number, you first need a tourist licence.
Holiday let owners on the Costa del Sol apply to the regional government, Junta de Andalucía, for a licence called Vivienda con Fines Turísticos (VFT).
However, municipalities within each region have the power to issue an outright ban on the issuance of new licences, or restrict them in certain areas, called zoning.
On the Costa del Sol, the municipality of Málaga City has placed restrictions in its historic centre, while Fuengirola and Marbella are tightening rules in some zones on a case-by-case basis.
“Malaga City has had a lot of holiday-let investment and has become a little bit too tourist-like for the locals’ liking,” said Mr Woolley. “They have issued a blanket ban on any new holiday rentals in certain zones of the city for the next three years.
“They don’t want to become like Barcelona, which has this problem big time.”
Barcelona in Catalonia has moved to ban all holiday rentals in private apartments by November 2028 in response to rocketing rental prices for locals. The thousands of existing licences for short-term rentals will be eliminated, and no new ones will be issued.
Mr Woolley said: “For us as agents, the biggest issue we’ve faced in the past six to 12 months has been finding properties that you can rent out without any restrictions.”
Even if you find a property to buy in a municipality without restrictions, a key update to the law last April means communities of owners who live in apartment buildings, or developments of houses with shared spaces/facilities, have the power to veto your plan to let out your home to holidaymakers.
After buying an apartment you must add your intention to let it out to the agenda of the community’s next Annual General Meeting, when it gets put to the vote. If less than 60pc of the residents are in favour, your request to let it out on a short-term basis is denied.
What can you do about it?
One of the biggest wins for holiday let owners on the Costa del Sol is the protection of licences already granted – known as “acquired rights”.
Therefore, the easiest way to protect your plans to let out your holiday home is to buy a property that already has a licence. They do not expire, as long as you remain compliant with any conditions attached to them.
Ms Wood said: “One big question left unresolved was whether a property with an existing tourist rental licence lost the licence if sold.
“The Andalucía decision, announced at the end of 2025, was that it remains with the property.
“Given that buyers of a property without an existing licence can’t guarantee they will get one, I think it is safe to assume that a property with a licence will be more attractive than a similar one without.”
Selling agents are already using this as a marketing feature in property descriptions, and it is expected to increase a property’s value in the future.
If you have your heart set on a property that has yet to be granted its tourist licence, work with a solicitor and agent who are local to the area.
The agent will know the leanings of certain communities – whether they are predominately for or against holiday lets – while the legal team will scour past minutes of communities’ AGMs to detect any anti-tourism sentiment or uncover any past voting that blocked a short-term let. You will be well-advised to steer clear of these.
As soon as you purchase your property in a tourist-friendly development, Mr Woolley recommends applying for a licence immediately, even if you do not intend to let your property out. It is likely to improve its saleability at the least.
In Andalucia it is free to apply for a licence, but you can expect to pay up to €800 for legal services if you are not a Spanish speaker and need help navigating the system.