Madrid’s rental market is under extreme pressure, with traditional rental prices now exceeding €22 per square metre. This has confirmed a clear trend in May 2026: more and more landlords are moving their properties into short-term rentals or room rentals, which now represent more than 36% of the rental offer in the city.
However, this shift has opened an important debate: when is this type of rental legal, and when can it be considered an abuse of the law?
Madrid City Council refuses to regulate it — for now
Madrid City Council has recently rejected changes to the city’s urban planning rules that would limit these types of rentals. Its position is that the matter falls under Spain’s national Urban Leasing Law, known as the LAU.
For the moment, this gives landlords some room to continue using short-term rental contracts. But there is also a clear warning: inspections are expected to become stricter.
The danger of the “fake short-term rental”
Many landlords believe that simply writing “6 months” or “11 months” in the contract is enough. This is a serious legal mistake.
Spanish courts are very clear: what matters is not only the length of the contract, but the real reason for the stay. A short-term rental must have a genuine temporary purpose, such as studies, a temporary work assignment, medical treatment, or another clearly justified reason.
If that reason is not clearly stated in the contract, the rental may be treated as a normal residential tenancy. In that case, the tenant may have the right to remain in the property for up to 5 or 7 years, depending on the type of landlord.
The alternative plan: grants of up to €25,000
As an alternative, the State Housing Plan offers direct grants of up to €25,000 to landlords who make empty properties available to the authorities for affordable rental schemes.
This option may give owners more security, including guaranteed rent payments and property maintenance.
Protect your property: get your rental contract reviewed by Beyond the Sun
The rental market in 2026 requires absolute precision. At Beyond the Sun, together with David Carrión’s legal team, we help you navigate this situation 100% online.
If you are a landlord
We prepare strong, clear contracts that properly explain the temporary reason for the rental and help reduce the risk of long mandatory extensions. We can also advise you on the new state grants.
If you are a tenant
We review your contract to check whether it may be using a false short-term rental format, and we help you understand and defend your right to housing stability.
Speak to us:
Do not leave your investment, or your home, in the hands of a template downloaded from the internet.
Book your online consultation with David Carrión today.
info@beyondthesun.es
You have everything to gain!
