Tourist Rental Rules and Property Use
If rental income is part of your plan, the licensing question comes first, not after completion.
Legal holiday rentals in the Balearics are governed by the ETV licence. Two facts about it shape every purchase where rental income matters. First, the licence is property-specific: it attaches to a particular property, not to an owner, so it cannot be assumed that a licence transfers with a sale or that a new one will be granted for a property that lacks one. Second, issuance is limited, which is precisely what makes licensed properties sought after. A listing that mentions rental potential is not the same as a property with a verified, current licence, and the difference is one your lawyer confirms in writing during due diligence, before the contrato de arras is signed.
Holiday letting and long-term letting are different things
Spanish law treats short holiday stays and long-term residential lets as entirely separate regimes. The ETV licence concerns holiday letting: short stays marketed to tourists. Long-term residential letting is governed by ordinary tenancy law and does not require an ETV licence, though it brings its own obligations and a very different income profile. Letting to tourists without a licence is not a grey area: it is unlicensed activity, it is enforced, and fines exist. For an owner an ocean away, that is not a risk worth carrying, and there is no need to carry it when the question can be settled before you buy.
Buy with the use in mind
Intended use should shape the search from day one. A buyer who wants meaningful holiday rental income should search among licensed properties from the start, and price the licence into what they pay. A buyer planning long-term lets, or purely private use, has a wider field and different priorities. Hoy Hoy Ibiza asks the use question at the first conversation, verifies ETV status as part of every relevant due diligence, and coordinates the rest for US clients remotely: video walk-throughs, English-speaking lawyers, power of attorney for signings, and currency exchange specialists for the USD to EUR transfers. Rental income also has a US dimension, since the IRS taxes worldwide income, so we encourage clients to involve a US tax adviser early. Spain's double taxation treaty with the United States exists so that income is not taxed twice, but the planning belongs before the purchase, not after it.
Talk it through with an advisor
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