Renting Out Your Costa Blanca Home: Holiday Let or Long-Term Tenant?
Holiday let at 6–8% gross or long-term at 4–5% with no licence: real Costa Blanca rental returns for 2026, the tax rule that changes the outcome depending on where you live, and two questions that settle the choice.
Owner’s guide · Rental yield
Renting Out Your Costa Blanca Home: Holiday Let or Long-Term Tenant?
By Sunset Homes · 9 min read · Updated 2026
A well-run holiday let on the Costa Blanca returns around 6–8% gross a year. A long-term rental, 4–5% — with half the work and no licence required. That’s the real decision, and the right answer depends less on the percentage than on three things: how much you want to use the home yourself, how much management you’ll tolerate, and whether your property can actually get a tourist licence.
At a glance
- Holiday let: 6–8% gross, needs a Valencian tourist licence and hands-on management.
- Long-term: 4–5% gross, no licence, one tenant, governed by the LAU rental law.
- Tax can eat the difference: 24% on gross income if you live outside the EU.
Holiday letting: more income, more friction
A well-located two-bed apartment grosses 15,000–20,000 € a year on the platforms; a villa with a pool considerably more. Now subtract: platform commissions (~15%), cleaning and laundry, check-in management (or a management company taking 20–30% of income), and running costs that climb with guest turnover. And the prerequisite that decides everything: the Valencian Community tourist licence, increasingly restricted in several towns. No licence, no legal holiday let — check it before you buy, not after.
Long-term: lower yield, quieter money
A standard residential contract under the LAU gives you twelve months of stable income — no voids between guests, no weekly changeovers. The trade-off is double: you lose the use of the home, and the LAU strongly protects the tenant (extendable minimum terms, capped rent updates). For an owner living abroad who doesn’t want to think about the property, it’s usually the calmest money. The half-way option almost nobody exploits properly: winter lets to northern European retirees from October to May, keeping summer free for you.
Tax decides more than the yield does
EU/EEA residents pay 19% on the profit (expenses deductible). Everyone else — UK owners included — pays 24% on gross income with zero deductions. That single rule turns many apparently profitable holiday lets mediocre for British owners. Run the numbers with the annual taxes guide open before choosing a model.
Two questions that settle it
- Do you want the home in summer? Then holiday-let the weeks you’re away, or do a winter let from October to May.
- Is it pure investment, zero time commitment? Long-term tenant, rent arriving monthly on its own.
Still choosing what to buy as a rental? Property type matters — see new build vs. resale and the current market report.
Want to know what your property would earn?
We’ll estimate your home’s income under both models, with real market figures from your area.
