Real Estate Market Intelligence & Investment Advisor
Costa Blanca · Spain
Residential properties with a tourist licence and purpose-built tourist accommodation may look similar. From an investment perspective, they are anything but.
For most international buyers, the search begins the same way: find an apartment near the Mediterranean, run the numbers on expected rental income, compare it against the asking price. Only later (often during the viewings) do they discover that two properties which look almost identical can sit under completely different legal, financial and operational rules.
That distinction matters more every year on the Costa Blanca, where demand keeps rising while regulation keeps tightening.
Since April 2025, new tourist registrations in a building under horizontal property require the agreement of three-fifths of owners and quotas, on top of municipal planning compatibility.
So the first question, for an investor or for a developer preparing to market a project, is no longer “how much rental income can this generate”. It is “what type of asset is this, exactly”.
Two products, one confusing label
The market often files both under the same broad heading: holiday rental property. In practice, they are different assets, with different risks and different buyers.
Residential property with a tourist licence
A conventional dwelling, residential by planning designation, which has since obtained the tourist registration needed to operate as short-term accommodation.
Its strength is flexibility. If holiday rentals become less attractive, the owner can usually switch to long-term letting or sell to a broader pool of buyers, subject to the regulations in force at that time.
Its trade-off is regulatory exposure. In the Comunitat Valenciana, the Autonomous Regional Community to which Alicante and Costa Blanca belong, registration as a Vivienda de Uso Turístico is valid for five years and must be renewed, generally with fresh planning compatibility. Since April 2025, the owners’ community can also block new registrations if the required majority isn’t reached. The rules may not identical in every municipality, so due diligence before purchase is highly recommended.
Purpose-built tourist accommodation
Conceived, designed and authorised from the outset as tourist accommodation. Tourism isn’t added later; it’s built into the planning, the design and often the operating model.
This gives certainty straight away about permitted use. It also tends to come with management contracts, limits on personal occupation and specific resale conditions.
None of this makes it a worse investment. It makes it suited to a different investor.
Some of this product goes a step further. When it is built on suelo terciario (land zoned for commercial or hotel use rather than residential use), the tourist licence isn’t requested afterwards, unit by unit. It is already attached to the land itself, and the whole building typically operates under a single management company from the outset. That removes the owners’ community vote described above as a risk altogether: there is no residential majority to persuade, or to lose, because the building was never a conventional residential community to begin with.
| Residential property with tourist licence | Purpose-built tourist accommodation | |
| Original planning use | Residential | Tourist accommodation |
| Operational flexibility | Generally higher | Usually more restricted |
| Personal use | Typically unrestricted (subject to regulation) | May be limited by the management agreement |
| Regulatory exposure in terms of holiday rental | Higher, and subject to changes | Lower, as it is meant for tourist use since conception |
| Owners’ community influence | Significant | Usually limited, as it is managed by an operator |
| Financing | Often assessed as a second home | May be assessed as an investment asset |
| Purchase taxation | ITP (9%-11%) on resale; IVA (10%) + AJD (1.4%) if new-build, no VAT recovery for private buyers | Often IVA (10%) + AJD (1.4%) from origin; VAT may be recoverable via a company running a taxable tourist activity |
| Exit route | Broader resale market | More specialised buyer profile |
| Best suited to | Flexible investors | Income-focused investors |
Is any of the two types of tourist rental properties more profitable?
Not necessarily. Professional management, occupancy, running costs and location usually weigh more on profitability than the legal nature of the property itself.
Across the Costa Blanca, well-managed licensed rentals commonly report gross yields around 5% to 6%, while professionally managed purpose-built product is marketed at 6% to 9% under favourable operating assumptions (sector operator estimates, 2025).
Experienced investors rarely stop at the gross figure. The more useful question is what remains after management fees (commonly 10% to 20% of rental income), maintenance, vacancy, insurance, taxation and future capital expenditure. That is where the real return sits.
Financing is not always the same
Lenders don’t treat every property the same way. A residential property with a tourist licence is often assessed as a second home: 60% to 70% loan-to-value, shorter terms, somewhat higher rates than a primary residence.
Purpose-built tourist accommodation is sometimes analysed as an investment asset instead, meaning a different loan-to-value ratio and more equity upfront. Occasionally no standard mortgage is available at all, and the buyer turns to a cash purchase or financing arranged through the developer or operator.
Understanding how a property will be financed belongs in the acquisition strategy, not in the small print discovered afterwards.
Buying through a company: VAT instead of transfer tax
Most resale property in the Comunitat Valenciana is taxed through ITP (transfer tax): 9% up to €1,000,000 and 11% above it, since the rate reduction that took effect in June 2026. New-build property is taxed differently, through Value Added Tax (Impuesto de Valor Añadido – IVA) at 10%, plus, in case financing the purchase is financed, 1.4% Stamp Duty (Actos Jurídicos Documentados – AJD), regardless of who buys it.
For purpose-built tourist accommodation on tertiary land, what happens after the purchase is what sets it apart. Long-term residential letting is generally exempt from IVA; tourist accommodation with hotel-type complementary services generally is not. When a property is bought through a company and the activity is structured as a taxable tourist operation, the IVA paid on the purchase can, in some cases, be deducted or reclaimed.
That detail can materially change the net cost of acquisition, which is why it belongs in the conversation with a tax advisor before signing, not after.
The exit begins on the day you buy
Every investment eventually reaches its exit, and the easiest properties to sell are rarely the ones with the highest advertised yield. They are the ones with legal certainty.
A future buyer will want clear answers: is the tourist use fully compliant, can the registration be renewed, does the owners’ community support tourist activity, will lenders finance the purchase, and are there contractual restrictions that transfer with the property.
The clearer those answers are today, the stronger the property’s liquidity tomorrow.
Which investor does each product suit
A residential property with a tourist licence generally suits investors who value long-term flexibility, may alternate between holiday rentals and residential use or letting, want a broader resale market and prefer maximum control over the asset.
Purpose-built tourist accommodation generally suits investors who prioritise professionally managed income, are comfortable with a structured operating model, need only occasional personal use and want a more passive investment.
The right choice depends less on the property than on the objective behind it.
A note for developers marketing a project
The same distinction that protects an investor is what sells a development faster.
Buyers comparing options across borders ask the same questions before they ask about price: what type of asset is this, is the planning compatibility resolved, under what conditions, and can it be financed.
A project that answers those clearly, before being asked, reaches the right buyer sooner and loses less time to enquiries that were never going to convert.
For product built on tertiary land, that clarity goes further: the tourist licence is already secured at community level, with no owners’ vote to win or lose, and a purchase structured through a company may allow VAT recovery on acquisition. Both are genuine commercial arguments, worth stating plainly rather than leaving a buyer to find them out later.
Due diligence matters more than ever
Location remains essential, but is no longer enough on its own.
Before committing to a purchase, or a listing, it is worth confirming planning compatibility, tourist registration requirements, owners’ community rules, financing, tax treatment, the management structure and the exit strategy.
Buying a holiday rental property today is not only about acquiring real estate. It is about acquiring an asset whose long-term value depends as much on legal certainty as on location.
If you are weighing a Costa Blanca opportunity, as an investor or as a developer thinking through positioning, I’d be glad to talk it through with you.
Not selling. Advising.
Frequently asked questions
Often, yes. But the conditions depend heavily on whether the lender classifies the property as residential or as a purpose-built tourist asset, so loan-to-value ratios, underwriting and rates can differ considerably.
Residential property with a tourist licence usually offers more flexibility, since it can be used or sold as a conventional home, subject to regulation. Purpose-built tourist accommodation tends to operate under more structured management models.
There is no universal answer. Occupancy, location, professional management, running costs and taxation usually influence net profitability more than the legal classification itself.
Beyond condition and location: planning compatibility, tourist registration requirements, owners’ community rules, financing options, real operating costs and the long-term exit strategy.
Not necessarily. They can offer more certainty about tourist use, but they usually appeal to a narrower pool of buyers. Residential properties tend to have a broader resale market, though they are more exposed to future regulatory change.
That depends on your objective. If flexibility, personal use and resale potential matter most, a residential property with a tourist licence is usually the better fit. If passive income through professional management is the priority, purpose-built tourist accommodation tends to suit better.
Not automatically. In the Comunitat Valenciana, blocks and complexes of tourist apartments operate under the ‘unidad de explotación’ principle set out in Decreto 10/2021 (Law 15/2018, article 66): a single management company administers the whole building, and that responsibility doesn’t disappear just because an owner also holds title to a unit. Personal use is normally set out, and limited, in the management contract itself, commonly blocked out in advance and capped to a set number of weeks a year, precisely to preserve the building’s tourist classification. It is a contractual limit as much as a regulatory one, so the terms belong in the pre-purchase review, not in an assumption.
Rarely, and never by the owner’s decision alone. Land zoned for tourist or tertiary use generally doesn’t permit residential use at all, since that is precisely the classification that allows the tourist licence to exist in the first place. Converting it to a habitual residence would require the municipal urban plan to reclassify the land or building as residential, a municipal planning decision rather than a private one, and tertiary-zoned parcels are typically structured to avoid that outcome. In practice, this makes purpose-built tourist accommodation on tertiary land a long-term tourist or investment asset, not a fallback home.
In some cases. If a new-build property is bought through a company running a taxable tourist activity rather than exempt long-term letting, the VAT paid on the purchase may be deductible. This depends on the specific structure, the services provided and the company’s registered activity, and should be confirmed with a tax advisor before buying.
Not reliably, and it is worth being cautious about that assumption. Public portals track average price per square metre by location and by new-build versus resale, not by land-use classification, so there is no published dataset that isolates tourist-zoned new-build from residential-zoned new-build in the same town. In Calpe, for instance, resale property averaged around €3,567/m² in June 2026, while new-build listings generally trade at a premium to resale that has far more to do with being new than with tourist versus residential status.
What genuinely differs between the two products usually isn’t the asking price itself. It’s what sits behind it: mandatory single-operator management and limited personal use can narrow the buyer pool for purpose-built product, which sometimes tempers demand; the ability to recover VAT through a company can lower the real net cost without lowering the headline price; and resort-style amenities can push the asking price up rather than down. Comparing two units in the same building, at the same stage of construction, is a far more reliable test than comparing category averages across an entire town.
Sources and further reading
Legislation and official sources
- European Union — Regulation (EU) 2024/1028, on the collection and sharing of data relating to short-term accommodation rental services
- Government of Spain — Ventanilla Única Digital para Arrendamientos de Corta Duración, Ministry of Housing and Urban Agenda
- Royal Decree 1312/2024, establishing the single digital window and the national registration system for short-term rentals
- Law 37/1992, on Value Added Tax, article 20.Uno.23, on the exemption for residential letting and its exceptions for tourist and parahotel accommodation
Comunitat Valenciana
- Turisme Comunitat Valenciana, official regulation of Viviendas de Uso Turístico
- Generalitat Valenciana, Decree 10/2021 and subsequent amendments regulating tourist accommodation, including the ‘unidad de explotación’ principle (article 66 of Law 15/2018, on tourism, leisure and hospitality)
- Generalitat Valenciana, Law 5/2025, on fiscal, administrative and financial measures, setting ITP and AJD rates in force since June 2026
Market statistics
- Idealista
- National Statistics Institute (INE), tourism statistics and accommodation survey
- Colegio de Registradores, Spanish property market statistics
- General Council of Notaries, monthly property transaction statistics
- Bank of Spain, housing finance and mortgage statistics
Disclaimer
This article provides general information to help investors and developers understand the main differences between residential properties licensed for short-term holiday rentals and purpose-built tourist accommodation in Spain. Regulations, planning policies, financing criteria and tax treatment vary by municipality and by individual circumstances, and may change over time. Professional legal, tax and financial advice should always be obtained before making any investment decision.
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