New Spain licence laws 'risk suffocating' property investment "Spain is at risk of suffocating any much-needed bounce back in its tourist residential market," he said. The new law targets foreign owners in particular, as it highlights that holiday lets will be deemed illegal without the correct licence and approval by the local authority when advertised online, which is a popular way for non-Spanish residents to market rental homes. As well as scouring the internet for unlicensed property, it's thought that the authorities may also monitor information from electricity companies to look for short-term peaks and troughs in energy use. The licences will typically be available from local town halls. Way explained: "The change is devolution of the law governing holiday lets from Spain's national to its regional governments, so fees and conditions will vary by region. Some regions, notably the Balearics and Canaries, have had their own rules for holiday lets in place for years; now all regions will need to control this market. The change will apply to anyone, foreign resident or non-resident or Spaniard, letting a property on a short-term holiday let. He added: "In many cases, tighter regulation is being driven by hotel owners and hotel companies, who obviously want to discourage tourists staying in private accommodation, and many of whom have powerful positions at town hall and regional government level - hence holidays lets have been strictly controlled in the Balearics, home of Spain's largest hotel groups." Chris Mercer, director of Mercers, Murcia, Costa Calida (www.spanishproperty.co.uk) said: "I think that the main aim of the Spanish government is to raise tax revenue. I don't think they are trying to stop people from renting their property, but instead trying to get an idea of the numbers involved. There is of course a possible positive to this. If they are going to tax the owner then one would presume that any reasonable costs could be claimed or offset against that tax. However, Way fears that additional red tape and admin could make many Brits, especially those who don't speak Spanish confidently, look for property elsewhere. One of the incentives for many British and other foreign buyers in Spain is the opportunity to pay for the upkeep of their property through rental income - without that benefit, buyers could look elsewhere for a second home, in effect making the new legislation counter productive. The news comes after reports that Britons are leaving Spain due to new financial reporting requirements. However, other commentators have speculated that Spanish property will become more attractive to expats this summer, as a new law expected to come into force by July will allow non-EU residents to get Spanish residency automatically if they buy a property worth €500,000 or more.