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Long Term Rental

Long-Term vs. Holiday Lets in Manilva & Casares: Tax Benefits & Cost Comparison for Landlords in 2025

11th June 2025 by 2020admin

Owning a rental property on Andalucía’s Costa del Sol — whether in Manilva or Casares — is an attractive investment. But should you choose the steady income of a long-term rental or the potentially higher gross returns of holiday lets? Taxes, running costs, and the amount of work involved make a big difference to your final net result.
Spain’s 2023 Housing Law (Ley 12/2023) introduced important IRPF reductions for long-term rentals of properties used as the tenant’s habitual residence. Andalucía has not declared any national “stressed housing areas” (zonas de mercado residencial tensionado). Instead, the region works with its own framework under Ley 5/2025 de Vivienda de Andalucía, which includes “áreas prioritarias”. As a result, the higher 70–90% reductions that apply only in stressed zones are not available in Manilva or Casares.
In this article we compare the tax treatment and net income for a typical Manilva apartment rented long-term at €1,000 per month versus as a holiday let at €1,000 per week with 35% occupancy. Meet Javier, a Spanish tax resident, as we look at the numbers to help you plan your 2026 rental strategy.

Long-Term vs. Holiday Lets: What’s the Deal?

Andalucía’s rental market continues to attract strong demand from local residents, expats and tourists. Long-term rentals offer greater stability and access to IRPF reductions under the Housing Law. Holiday lets can generate higher gross income in peak season but come with higher costs, more management time, and stricter regulatory requirements under Andalucía’s tourist rental rules (Decree 28/2016 and subsequent updates).
Manilva introduced a three-year suspension of new tourist licences starting in December 2025 to help address local housing pressure. This makes existing licensed properties more valuable but also increases the importance of weighing long-term options carefully.

Tax Benefits for Long-Term Rentals

When a property is rented as the tenant’s habitual residence, Spanish tax residents can reduce the net rental income (gross rent minus deductible expenses) under Article 23.2 of the IRPF Law, as amended by Ley 12/2023:
  • Contracts signed up to 26 May 2023: Transitional 60% reduction.
  • Contracts signed from 26 May 2023 onwards:
    • 50% reduction in the general case (no extra conditions required).
    • 60% reduction if the property has undergone qualifying rehabilitation works completed in the two years before the contract.
    • 70% or 90% reductions — only available in officially declared stressed zones and subject to strict extra conditions (significant rent reduction, first-time rental to young tenants aged 18–35, social housing, etc.). These higher rates do not apply in Manilva or the rest of Andalucía, as no stressed zones have been declared under the national law.
These reductions apply only to the positive net rental income and only when the property is used as the tenant’s permanent home. They do not apply to tourist or short-term holiday rentals.
Long-term tenants normally pay their own utilities, which reduces the landlord’s costs.

Tax and Costs for Holiday Lets

Holiday (short-term/tourist) rentals are also taxed under IRPF for Spanish tax residents, but without the Housing Law reductions. The full net rental income is taxable.
On VAT (IVA):
  • Pure accommodation rental (no hotel-like services) is generally exempt from IVA or subject to different treatment.
  • When hotel-like services are provided (regular cleaning during the stay, linen changes, reception, etc.), the reduced 10% IVA rate has traditionally applied to those services.
  • As of mid-2026 the Spanish government has announced plans to raise IVA on tourist apartments (pisos turísticos) to 21%. The measure formed part of a wider housing package discussed for approval in summer 2026. Landlords should verify the exact status and application rules with their tax advisor, as the final text and entry-into-force date may still be subject to confirmation.
Holiday lets also require a tourist licence, occupancy certificate and compliance with Andalusian regulations. The landlord usually covers utilities, laundry, cleaning and often pays management fees.
Non-residents face different rules under IRNR (generally 19% for EU/EEA residents and 24% for non-EU residents on net income). They cannot claim the Housing Law IRPF reductions.

Cost Comparison: Long-Term vs. Holiday Lets

Assumptions for Javier’s Manilva apartment (Spanish tax resident):
  • Long-term: €1,000/month (€12,000/year), tenants pay utilities.
  • Holiday let: €1,000/week at 35% occupancy ≈ 18.2 weeks/year (mainly June–September).
  • Illustrative IRPF rate of 19% (lowest state bracket), assuming this is the landlord’s only or main income. In reality the marginal rate depends on total taxable income and Andalusian regional rates.

Scenario 1: Long-Term Rental (€1,000/month)

Javier rents the property as the tenants’ habitual residence under a contract signed after 26 May 2023. He applies the standard 50% reduction (or 60% if the property qualifies for the rehabilitation reduction).
  • Gross Rental Income: €1,000 × 12 = €12,000/year.
  • Expenses:
    • IBI (property tax): €1,200/year.
    • Community fees: €1,500/year.
    • Maintenance/repairs: €800/year.
    • Total Expenses: €3,500/year (utilities paid by tenant).
  • Net Rental Income: €12,000 – €3,500 = €8,500.
  • 50% Reduction: €8,500 × 50% = €4,250 reduction.
  • Taxable Income: €8,500 – €4,250 = €4,250.
  • Illustrative IRPF (19%): €4,250 × 19% = €808
  • Net Income After Tax: €12,000 – €3,500 – €808 = €7,692/year.
  • Additional Costs: None (no laundry; minimal management).

Scenario 2: Holiday Let (€1,000/week, 35% occupancy)

Javier lists his apartment on Airbnb at €1,000/week, achieving 35% occupancy (18.2 weeks/year, June–September). He covers utilities, laundry (€50/week), and complies with tourist rental regulations.

  • Gross Rental Income: €1,000 × 18.2 weeks = €18,200/year.
  • Expenses:
    • IBI: €1,200/year.
    • Community fees: €1,500/year.
    • Maintenance/repairs: €800/year (slightly higher due to guest turnover).
    • Utilities (electricity, water): €1,500/year (estimated for 18.2 weeks).
    • Laundry: €50 × 18.2 weeks = €910/year.
    • Cleaning fees (between guests): €50 × 18.2 = €910/year.
    • Management fees (20% of income): €18,200 × 20% = €3,640/year.
    • Total Expenses: €1,200 + €1,500 + €800 + €1,500 + €910 + €910 + €3,640 = €10,460/year.
  • Net Rental Income: €18,200 – €10,460 = €7,740.
  • IRPF Tax (19% up to €12,450, assuming no other income): €7,740 × 19% = €1,471/year.
  • VAT (10% on services): Applies to laundry, cleaning, and management (€910 + €910 + €3,640 = €5,460 × 10% = €546/year).
  • Total Tax (IRPF + VAT): €1,471 + €546 = €2,017/year.
  • Net Income After Tax: €18,200 – €10,460 – €2,017 = €5,723/year.
  • Additional Costs: Time managing bookings, guest turnover, and compliance with Decree 28⁄2016.

Javier files IRPF (Form 100) and quarterly VAT (Form 303). The higher revenue is offset by taxes, expenses, and effort, making holiday lets less appealing.

Comparison

  • Long-Term Rental:
    • Gross Income: €12,000/year.
    • Net Income After Tax: €7,692/year.
    • Pros: Stable income, 50% tax reduction, tenants cover utilities, low management.
    • Cons: Lower revenue, less property access.
  • Holiday Let:
    • Gross Income: €18,200/year.
    • Net Income After Tax: €5,723/year.
    • Pros: Higher weekly rates, property access off-season.
    • Cons: Higher taxes (no reductions, VAT), high expenses (€10,460), regulatory burden, and management effort.

Surprisingly, long-term rentals net €1,969 more than holiday lets at 35% occupancy, thanks to tax breaks and lower costs. Higher occupancy (e.g., 50%) could favour holiday lets.

Which Option Looks Better?

In this illustrative example the long-term rental produces higher net income after tax (€7,692 vs €5,723) with far less day-to-day work and lower regulatory risk — especially relevant given Manilva’s three-year suspension of new tourist licences. Of course, actual results depend on:
  • Your occupancy rates and achievable rents
  • Exact deductible expenses
  • Whether the property qualifies for the 60% rehabilitation reduction
  • Your total taxable income (which determines the real IRPF rate)
  • Management costs and personal preference for hands-on involvement
Holiday lets can still outperform in strong peak seasons or with highly optimised management, but the tax and cost advantages currently favour long-term rentals for many landlords in Manilva and Casares.

Final Advice

Long-term rentals currently offer clearer tax advantages and greater stability in this part of the Costa del Sol. However, the best choice depends on your personal goals, the specific property and current market conditions.
If you own (or are considering buying) a property in Manilva, Casares or the surrounding area and would like a personalised comparison of long-term versus holiday rental options, get in touch with the C2C Properties team. We can help you understand the local market and connect you with trusted tax advisors.

Non-Resident Considerations

For non-EU non-residents (e.g., UK), long-term rentals yield €12,000 gross minus €3,500 expenses = €8,500 net × 24% IRNR = €2,040 tax; net after tax €6,460. For holiday lets: €18,200 gross minus €10,460 expenses = €7,740 net × 24% = €1,858 tax (plus any VAT); net €5,882 (assuming no VAT deduction here for simplicity). EU/EEA non-residents pay 19% IRNR on net income but miss the reductions. Spanish tax residency maximizes long-term rental profits.

Always verify the latest rules with the Agencia Tributaria or a professional advisor, as both national and regional housing and tax measures continue to evolve.