New limitations on Tourist Housing in Madrid

This initiative is motivated by the remarkable increase experienced by this type of accommodation in recent years. Since 2017, the supply of Tourist Housing in Madrid has increased by 41%, representing 65% of the total number of tourist places (including hotels, pensions, etc.) implemented in the same period, being, most of Tourist Housing, in irregular situation.

According to an impact report promoted by the City Council, this growth has several consequences, including the reduction of the residential housing stock and the problems of coexistence that the proliferation of this type of housing generates with other residents, particularly in the Central district of the capital, where Tourist Housing represent 7.36% of the available housing, that is, 8.5 times more than the average for the rest of the city. It should be noted that, according to City Council estimates, out of 13,502 existing Tourist Housing, only 941 operate with the corresponding activity license.

Although the autonomous government led by Manuela Carmena tried to alleviate these deficiencies through the Special Plan for Accommodation approved in March 2019, the Council qualifies the same as ineffective, not having solved the alleged problems. Due to the above, from the Madrid City Council has announced the implementation of the following measures:

1. Suspending the granting of new licenses for Tourist Housing until the approval of the modification of the General Urban Development Plan, which will establish greater regulation for them. Final approval of the General Plan is scheduled for the first quarter of 2025. Until then, the granting of new licenses is suspended in the following cases:

• Properties with residential use, in the case of scattered tourist dwellings.
• Premises located in the commercial axes of the downtown district that intend to change their use to convert them into housing.
• Properties located on the first floor with a use other than residential.

 

2. Reinforce the inspection activity with the incorporation of 10 new inspectors to the Sub-Directorate General of Inspection and Discipline, which up to now has 65 inspectors, representing an increase of 15% of the corps.

3. Create an official list of the Tourist Housing that have a municipal license and their actual location, accessible from the City Council's web portal.

Penalties:
Until the approval of new measures regulating the granting of licenses for Tourist Housing, the applicable sanctioning regime will be the existing one according to Law 9/2001, of the Land of the Community of Madrid, whose article 204.3 b) establishes that the implantation and development of uses incompatible with the applicable urban planning is a serious infraction, whose fines range between 30,001 and 600,000 €, according to art. 207 of the aforementioned Law. Based on these precepts, the City Council has announced that it will carry out the following procedure against Tourist Housing without a license:

• First notice of cease and desist order and restoration of legality.
• In case of non-compliance, a firm penalty of 30,001
  euros.
• Second final sanction of 60,001 euros if the irregular
  activity continues.
• Third firm sanction of 100,001 euros if the operation
  persists.

Penalties are cumulative in the event of continued noncompliance with the law.

The Eversheds-Sutherland Hospitality team remains at your disposal to further discuss any questions you may have.