Short-term rental housing (in Spanish, vivienda de uso turístico or VUT) in Madrid today sits under three overlapping layers of regulation that have to be read together: the Special Hospitality Plan (PEH) of 2019, the licence suspension the City Council approved in April 2024 covering the so-called "rings 1, 2 and 3", and the regional reform of Decree 79/2014 introduced by Decree 27/2026. On top of that, since April 2025, a three-fifths majority is required from the homeowners' association. This guide brings together the full, up-to-date framework and explains what it means for owners, buyers and investors.

What is the PEH, and why does it still matter?

The PEH — the Special Plan for the Regulation of Tertiary Hospitality Use — was approved by the full City Council on 27 March 2019 with the declared aim of stopping the conversion of homes in the centre into temporary tourist accommodation and redistributing the activity to other parts of the city. It defines a territorial area split into three concentric rings around the historic centre and sets, for each one, different conditions on independent access, ground-floor use and compatibility with residential use.

The City Council itself has acknowledged that the PEH proved ineffective at containing the growth of short-term rentals: between 2017 and 2024 alone, tourist bed capacity in flats rose by 41%. That is why, since 2024, the plan has coexisted with a package of precautionary measures — the licence suspension — and with an amendment to the General Plan, still going through the approval process, that will replace the PEH.

The PEH rings and the future zoning

Any feasibility analysis of a short-term rental in Madrid starts by checking which PEH ring the property sits in, because that determines whether a licence can be processed today and what regime will apply once the amendment to the General Plan is approved.

Ring 1 — Centro district

This is the most restrictive area and the one with the highest density of short-term rentals in the city. Since April 2024, it has had the granting of licences suspended for scattered short-term rentals in residential use and, specifically along the district's commercial axes, for converting commercial units into homes in a way that could create new tourist units.

Ring 2 — Chamberí, Arganzuela and parts of Salamanca, Retiro and Argüelles

Covers most of Chamberí, Arganzuela and neighbouring areas of Salamanca, Retiro and the Argüelles neighbourhood. The regime is also restrictive, with the same suspension of licences for scattered short-term rentals in residential use in place since 2024.

Ring 3 — Rest of the central almond and the Príncipe Pío area

Includes the rest of the area bounded by the M-30 ring road, as well as parts of Puerta del Ángel, Príncipe Pío and Chamartín. It is also subject to the licence suspension for scattered short-term rentals while the new zoning is pending.

Rest of the city — outside the PEH area

Districts and neighbourhoods not included in the three rings are not subject to the suspension on scattered licences, although they still have to meet every other urban planning, regional and habitability requirement applicable to any short-term rental.

Important:

The draft of the future amendment to the General Plan works with a four-zone model with increasing requirements for independent access and maximum density, but it is still planning in progress, not the regime currently in force. The zoning that applies today is still that of the 2019 PEH and its ring 1, 2 and 3 area, and it should always be checked against the official municipal map.

Requirements to legally operate a short-term rental in Madrid

Setting aside planning feasibility, a legal short-term rental in Madrid has to meet a set of formal obligations:

  • Filing the responsible declaration under Decree 79/2014, as amended by Decree 29/2019 and, more recently, by Decree 27/2026 of the Governing Council of the Community of Madrid.
  • A municipal use/activity licence when the property sits within the PEH area and, in rings 1 to 3, independent access to the residential building unless the whole flat is being let.
  • Registration in the Community of Madrid's Register of Tourism Businesses.
  • A Unique Registration Number for short-term lets (NRUA), required across Spain under Royal Decree 933/2021 in order to advertise on platforms.
  • A minimum five-night stay, subject to the exceptions set out in regional rules.
  • A visible identification plate at the entrance to the property, and the registration number shown in all advertising and on platform listings.
  • Prior notice to the homeowners' association and, since April 2025, express authorisation where required (see below).

The absence of any of these elements — not only the lack of a planning licence — can trigger an independent sanctioning file, so compliance is worth reviewing as a whole, not just by checking that an NRUA number exists.

The regional reform: Decree 27/2026

Decree 27/2026, of 25 March, of the Governing Council of the Community of Madrid, amended Decree 79/2014, which regulates tourist apartments and short-term rentals. Among the most relevant changes are the creation of the Suitability Certificate for Short-Term Rental Housing (CIVUT), the possibility for homeowners' association bylaws to include an express ban on short-term rentals in the building, and the express extension of the Tourism Law's penalty regime to rental platforms when they fail to meet basic community-living or information obligations, including a failure to register the property with the regional register.

The temporary licence suspension in rings 1, 2 and 3

By an Agreement of the Governing Board published in the BOCM on 26 April 2024, the City Council suspended, as a precautionary measure under Article 70 of Law 9/2001 on Land of the Community of Madrid (LSCM), the granting of new licences in two cases within the PEH area:

  • Licences for scattered short-term rentals in residential use, and for converting commercial units into homes along the Centro district's commercial axes.
  • Licences for short-term rentals in non-residential buildings located on the ground floor, across the whole city.

The suspension is initially valid for one year, extendable for a further year if the public information stage of the new planning process has been completed within that period. It is a precautionary measure, designed to stop licences being granted under a regime that is about to be replaced, not an outright ban on the activity.

What this means in practice:

If your property is within ring 1, 2 or 3 and does not yet hold a licence or responsible declaration, in practice you will not be able to process one until the amendment to the General Plan is resolved, unless your case falls outside the two suspended scenarios. It is worth checking case by case, since the suspension does not cover the whole of the hospitality activity, nor short-term rentals that are already authorised.

Buying, selling or transferring an already-authorised short-term rental

A short-term rental that already held a valid licence or responsible declaration before the 2024 suspension keeps its authorisation, and there is still a market for these properties. Any purchase of a flat "with a short-term rental included" in Madrid should verify, on a documentary basis:

  • That the responsible declaration or licence is still valid and matches that exact address.
  • That there is no open sanctioning or verification file on the property.
  • That the property meets the requirements introduced by Decree 27/2026, particularly with a view to any future CIVUT application.
  • That the homeowners' association has not approved — and cannot, by the three-fifths majority, approve — an express ban on the activity in its bylaws.

Fines for operating without a licence or breaching the rules

Madrid has two separate sanctioning routes, which can end up overlapping on the same property.

Tourism route: Law 1/1999 on the Regulation of Tourism in the Community of Madrid

This governs fines for irregular tourist activity, with the following scale:

  • Minor infringements: up to 3,000 euros.
  • Serious infringements: from 3,001 to 30,000 euros.
  • Very serious infringements: from 30,001 to 300,000 euros, with suspension or closure of up to five years, cancellation of registration in the Register of Tourism Businesses and permanent closure of the establishment as additional penalties.

Planning route: Article 204 of the Community of Madrid Land Law (LSCM)

The City Council applies this when it finds that a property is operating as a short-term rental without the required planning authorisation. After a cease-and-desist order is not complied with, the coercive fines were toughened, rising from 1,000, 2,000 and 3,000 euros to 30,000, 60,000 and 100,000 euros on the first, second and third final penalty respectively, if the irregular activity continues.

Important:

Correct legal classification of the infringement matters: in February 2026 the High Court of Justice of Madrid (TSJM) overturned a 30,001-euro fine issued under Article 204.3.b of the LSCM because the infringement had been incorrectly classified. A notified fine should not be assumed to be legally sound without first reviewing the file.

Homeowners' association: the three-fifths majority

Since 3 April 2025, Organic Law 1/2025 amended Article 17.12 of the Horizontal Property Law and reversed the general rule across all of Spain, Madrid included: tourist activity in a property under the horizontal property regime is now banned unless expressly authorised by the homeowners' association. That authorisation requires a favourable vote from three-fifths (3/5) of the total number of owners, who in turn must represent three-fifths of the participation quotas.

The same majority allows the association to limit, condition or ban the activity — and, following Decree 27/2026, to write that expressly into its own bylaws — as well as to approve a surcharge of up to 20% on common-expense contributions for short-term rental units.

The reform is not retroactive: anyone already carrying out the activity legally before 3 April 2025 keeps that right, although the association can still use the same majority to introduce limits or surcharges going forward.

If you are refused a licence or receive a fine

Facing a refusal, a cease-and-desist notice or a sanctioning file linked to a short-term rental in Madrid, it is worth distinguishing between several lines of defence depending on the stage of the proceedings:

  • Submissions during the investigation stage, to challenge the facts alleged or provide evidence in your defence.
  • An appeal (alzada or reposición) against the sanctioning decision, within the applicable legal deadline.
  • A judicial review appeal once the administrative route has been exhausted without a favourable outcome, including a challenge to the correct legal classification of the infringement applied.
  • In certain cases, challenging a licence refusal where there is reasonable doubt about whether the 2024 suspension actually applies to the specific case.

Deadlines are strict and missing one can close off a line of defence, so it is worth acting as soon as the notification is received.

Frequently asked questions

Can you still get a new short-term rental licence in Madrid in 2026?

Not in practice within rings 1, 2 and 3: since April 2024, the granting of licences for scattered short-term rentals in residential use and for ground-floor hospitality use in non-residential buildings has been suspended, pending the amendment to the General Plan.

What happens to my short-term rental if I already have a licence in force?

It keeps its authorisation. The suspension affects new applications, not existing ones, although it is worth checking that it meets the requirements introduced by Decree 27/2026.

Do I need authorisation from the homeowners' association?

Since 3 April 2025, yes, unless the activity was already being carried out legally before that date. A three-fifths majority of owners and quotas is required.

How high can a fine be for operating without a licence?

Between 3,001 and 30,000 euros for serious infringements and between 30,001 and 300,000 euros for very serious infringements under the tourism route; and up to 30,000, 60,000 or 100,000 euros in successive coercive fines under the municipal planning route.

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