Madrid removes over 2,600 tourist rentals after new housing plan targets illegal Airbnb flats.
Credit : Azulblue, Shutterstock
Madrid’s booming short-term rental market is shrinking fast. Since the city council approved its “Plan Reside” to regulate tourist accommodation and protect residential housing, more than 2,600 tourist flats have vanished from the capital’s listings – a drop of 15.7 per cent in just a few months.
According to Madrid City Council, the number of holiday rentals has fallen from 16,959 in July to 14,297 in November, with data compiled by the independent platform Inside Airbnb, which tracks listings on the popular rental site. The trend accelerated after the plan was formally ratified on August 27, showing that the city’s tougher stance is already having a visible impact.
What is the plan Reside – and why it’s changing Madrid’s rental market
The Plan Reside, backed by Mayor José Luis Martínez-Almeida’s administration, is part of a wider effort to preserve residential housing and control the rapid spread of tourist rentals, many of which operate illegally. The measure received final approval from the Community of Madrid in August 2025, and it’s already reshaping the city’s rental landscape.
The plan divides Madrid into two main zones:
- The historic centre (APE 00.01) – which includes districts like Centro, Chamberí, Salamanca, Retiro, and parts of Arganzuela, Moncloa and Chamartín – where new tourist flats inside residential buildings are strictly banned, even on the ground floor. The conversion of commercial premises into tourist apartments is also prohibited.
- Areas beyond the M-30 ring road, where tourist accommodation can still be authorised, but only if the property has a separate, independent entrance at street level.
The aim, according to the city, is to strike a balance between welcoming visitors and ensuring that local residents can still afford to live in the city centre.
Hefty fines for illegal tourist flats
The fall in numbers isn’t just due to tighter zoning laws – it’s also thanks to the tougher sanctions that now apply to illegal holiday rentals.
Since late June, the city council and the College of Property Administrators of Madrid (CAFMadrid) have been working together to identify and warn owners of unlicensed tourist flats. The collaboration includes two main actions:
- Educating residents’ associations on how to report illegal tourist rentals in their buildings.
- Informing landlords about the steep fines they face if they continue operating without a licence.
And those fines are no small matter. The first confirmed penalty is €30,000, the second €60,000, and the third €100,000 – with fines potentially reaching €190,000 if the rules are repeatedly ignored. Previously, penalties ranged from just €1,000 to €3,000, making illegal renting a low-risk business for many.
This crackdown has already produced results. Since the collaboration began, 1,423 unlicensed tourist rentals have been taken off the market. CAFMadrid is now directly contacting owners of suspected illegal properties, explaining both the fines they face and the steps they can take to legalise their activity – if possible.
A City divided over tourism – but seeing results
Madrid’s leadership insists the plan isn’t about pushing tourists away, but about restoring order to neighbourhoods where short-term rentals had exploded in recent years. In some central districts, locals had complained about constant noise, overcrowding, and rising rents driven by platforms like Airbnb.
The latest official report from October 2024 showed that Madrid had 17,360 tourist establishments, of which 16,100 were tourist flats. Shockingly, only 7.45 per cent – around 1,200 units – had a valid licence.
With the new rules now in force, the city hopes to curb illegal rentals, protect long-term housing supply, and make tourist accommodation more professional and accountable.
Inside Airbnb’s latest figures show that between July and November 2025 alone, 2,662 listings disappeared, suggesting that many hosts are choosing to withdraw their properties rather than face penalties or attempt to comply with new regulations.
Balancing Tourism and Housing – Madrid’s Tightrope Walk
The Plan Reside marks a major shift in how Spain’s capital views tourism’s place within its housing system. It’s an attempt to reclaim residential spaces while still keeping Madrid open to visitors.
Critics warn that tighter rules could reduce accommodation options for tourists and hurt local businesses, but supporters argue that unchecked holiday rentals were driving residents out of the city centre.
What’s clear is that the city’s message is firm: tourist rentals will no longer be a free-for-all.
As Madrid prepares for 2026, the effects of the plan are already visible – fewer tourist flats, quieter neighbourhoods, and a renewed effort to protect housing for those who actually live in the city.
Stay tuned with Euro Weekly News for more news from Madrid