Madrid [Alex Azabache on Unsplash]

Madrid suspends granting of new holiday rental licences until 2025

Spain: Madrid City Council has announced a temporary suspension on granting new holiday rental licences in the capital with immediate effect – a suspension which looks likely to hold until 2025.

The news was announced at a press conference led by José Luis Martínez-Almeida, the mayor of Madrid, following a government meeting. In the press briefing, Martínez-Almeida said that the suspension would take place “with immediate effect”, while the city works on the approval of a modification to the General Plan of Urban Development of Madrid, which is being led by Borja Carabante, Madrid City Council’s delegate for Urban Planning, Environment and Mobility.

The goal of the General Plan is to “confront” issues around housing in Madrid, while at the same time “balancing the accommodation market in the city” to avoid “residential desertification”.

In the same press conference, the mayor admitted that the previous Special Accommodation Plan, which was approved in 2019, had been “ineffective” in preventing the proliferation of tourist apartments in Madrid and restricting residential housing supply.

Madrid City Council is tightening its stance on housing units that do not comply with the legal requirements of the city, including increasing the number of urban planning inspectors in the city by 15 per cent. Steeper fines will also be introduced from €1,000 to €30,000 in cases of non-compliance when owners have already been issued with a first notice of order of cessation and restoration of the legality, while second sanction will reach €60,001 if the irregular activity continues, and €100,001 if a third sanction needs to be imposed.

The sanctions would also be cumulative, meaning that transgressors could rack up fines of up to €190,000 under article 204 of Law 9/2001 on the Land of the Community of Madrid [LSCM] if they fail to comply with the new laws. According to Carabante, the regional government wants the sanctions to act as a deterrent effect to eliminate illegal activity in the holiday rental sector.

The regional government of Madrid currently defines “tourist accommodation” in the city as flats, apartments or homes that are furnished and equipped for immediate use, sold and promoted through touristic offering channels, for their use in their entirety by third parties for tourist accommodation purposes and in exchange for a price. Property owners / hosts are required to register any tourist accommodation in the city with the Register of Tourism Enterprises.

According to the city’s data, the number of tourist apartments in Madrid has grown by 41 per cent since 2017, in which time 5,564 new holiday homes have been recorded but only 50 tourist establishments, such as hotels, guest houses and hostels, have been established.

The temporary suspension on granting new holiday rental licences in Madrid is expected to last until the first quarter of 2025. The initial approval of the modification of the General Plan will be taken to the regional government in September and the matter will be heard in a Plenary Session early next year.

It comes as part of a wider recent action against perceived “mass tourism” in mainland Spain and the Spanish islands.

A draft law is currently being prepared in the Canary Islands archipelago which would ban new-build properties from the short-term rental market, while mainland cities such as Malaga and Barcelona are also said to be looking at introducing tighter legislation for holiday rentals.

Exceltur, the main Spanish tourism lobby, which endorsed the draft law in the Canary Islands, recently published a study highlighting how short-term rental listings in the 25 biggest cities in Spain increased by a quarter between January and March this year.

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