Horizontal Property Law

Spain's Ley de Propiedad Horizontal (Horizontal Property Law) governs the internal governance of multi-owner residential buildings. An April 2025 reform to the law, passed as part of Spain's short-term-rental regulatory package, gave residents' communities (comunidades de propietarios) the power to veto the registration of new tourist lets in their building by a three-fifths majority vote. Before the reform, individual apartment owners could register tourist lets freely as long as they met zoning and licensing requirements; the reform inserted a collective consent step at building level, allowing the majority of owners to block conversions even if the unit itself met all other criteria.

The law operates in combination with the national Unique Registration Number (URN) requirement, which obliged every legally operating short-let listing to display a valid national licence code. Together the two instruments drove the largest recorded annual contraction in Spain's short-let supply: INE data showed a drop from roughly 377,000 to 329,764 tourist dwellings in the year to November 2025, with approximately 52,000 listings removed in the six months when both instruments were simultaneously in force. The Tribunal Supremo's STS 620/2026 judgment voided the URN on federalism grounds in May 2026, but the Horizontal Property Law amendment, operating at building rather than national level, was not the subject of that ruling and remains in force.

The reform's wider significance lies in the supply-side mechanism it demonstrates. Short-let supply contraction in Spain represents the first scaled evidence from a major European market that co-ordinated regulation can return tourist flats to the residential pool. The Horizontal Property Law amendment was the demand-side enforcement complement to the URN's supply-side deterrent; with the URN gone, the committee-veto mechanism is now the primary lever still intact in Spain's regulatory toolkit.