It’s no secret that Spain faces a huge housing problem, which has only been compounding and aggravated over time, with the laws the government has approved in a continued market interventionism, which is backfiring.
Spain’s property and rental prices have reached all-time highs. In fact, housing has become Spain’s number one problem, followed closely by high unemployment. To that end, the Spanish government approved a batch of laws last year in an attempt to alleviate the situation.
One of the star measures was the creation of the new Registro Único Estatal de Alquileres (national registry for holiday rentals). The goal, on paper, was to exert control over holiday rentals nationwide by weeding out illegal ones, to facilitate accommodation, and increase the security and supply, which would hopefully bring down the price of rentals.
Whilst this sounds good on paper, unfortunately, in reality, it panned out very differently. The road to hell is paved with good intentions.
The issue was that, as explained in multiple articles, Spain’s regional Authorities already had devolved competencies over tourist rentals. In fact, over the past decade, every region in Spain has passed its own set of laws on holiday rentals and has Regional Tourism Authorities that exercise strict control over them, even granting Tourism Licences.
The central government unilaterally decided to invade devolved competencies constitutionally attributed to Spain’s 17 autonomous regions by creating a new central registry, which in effect duplicates and overlaps their competencies. I reported this in this article published by Idealista.
I’ve heavily criticised this in several articles. The European Union also took notice and slapped the wrist of Spain for going out of its way to overcomplicate matters. The European Union heavily criticised Spain's new national short-term rental registry, stating that the duplicate registration requirement violated EU short-term accommodation rules.
The European Commission previously issued warnings to Spain, arguing that the newly introduced national registry created an unnecessary administrative double burden for hosts, conflicting directly with EU Regulation 2024/1028.
Some autonomous regions appealed against this new law from the government to Spain’s Supreme Court.
This week, we’ve learned that Spain’s Supreme Court - the highest court in the land - has overturned the new national holiday registry with its 620/2026 ruling, in effect scrapping it altogether. This affects NRAU code applications, suppressing them.
As a result of the Spanish government purposely ignoring the Rule of Law, the cornerstone of any self-respecting democracy, it has now introduced (even) more legal uncertainty and confusion in the real estate market.
Investors and consumers at large dislike legal uncertainty. Everyone wants to work within a safe, legal framework and play by the rules. Clear laws enable legal security and foster investment and job creation in their wake. Clearly, Spain’s government has overreached by invading legal competencies constitutionally attributed to Spain’s 17 regional autonomous governments. The government must cease to continuously undermine, if not contravene, Spain’s Constitution at every step.
The saddest part is that this legal outcome was entirely foreseeable and avoidable.
Impuesto de Solidaridad a las Grandes Fortunas (ISGF) – National Wealth Tax
On another unrelated taxation matter, I bet my bottom dollar that we are also going to see this same legal outcome as well with Spain’s Impuesto de Solidaridad a las Grandes Fortunas (or ISGF, for short).
This was another ‘star’ measure of the government. Again, because of constitutionally devolved competencies, regional authorities in Spain have competencies over certain taxes, which include the Wealth Tax.
Depending on the political ideology of the regional administration, some of them passed laws which, in effect, suppressed the Wealth Tax, i.e. the regions of Andalusia and Madrid.
Spain’s central government, yet again, decided to step in decisively for electoral reasons and quash this by enacting its own national law to override and supersede the constitutionally regional taxation competencies. As a result, many of these autonomous regions also filed appeals to overturn the government’s new ISGF law.
In my humble opinion, they are right, and their appeals will be upheld over the next couple of years, overturning the ISGF as well.
At Larrain Nesbitt Abogados (LNA) we have over 23 years of experience specialising in property conveyance and taxation. We also assist clients with immigration & residency visas (digital nomad visa), and inheritance procedures (probate). You can contact us by e-mail at info@larrainnesbitt.com, by telephone on our UK line (+44) 0754 3838 218 or Spanish line (+34) 952 19 22 88, or by completing our contact form.
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