When a company relocates an executive to Madrid for one or several months, housing stops being a purely logistical matter. It becomes a legal and tax decision affecting the contract, the invoice received by the company and the provider’s obligations.
The average advertised rental price in the city of Madrid reached €23.70 per square metre in June 2026, representing a 7.6% year-on-year increase (idealista, 2026).
Choosing between a hotel, a private or platform-based rental and a professional mid-term housing solution—often referred to as corporate housing—is not just a matter of comfort. The cost, flexibility, risk and tax treatment of the arrangement can all change.
This guide explains what an HR department should check before arranging accommodation. To delegate the process, you can explore Nestic’s corporate housing service for companies in Madrid.
This guide provides general information and does not constitute legal or tax advice. Each arrangement should be reviewed according to its particular circumstances.
Key takeaways
- A seasonal lease governed by Article 3 of Spain’s Urban Leases Act, the LAU, may be used for a temporary work assignment. What matters is not a specific number of months, but that the temporary purpose and expected duration are properly documented (BOE, Law 29/1994).
- When the employee occupying the property is identified specifically and concretely and the other requirements are met, renting the property to the company may be exempt from VAT and subject to Transfer Tax, known in Spain as ITP (Spanish Tax Agency).
- When the accommodation falls within the scope of Spain’s Single Rental Registry, its rental registration number must appear in listings published on the relevant platforms (Royal Decree 1312/2024).
- For leases classified as being for a use other than permanent housing, the minimum statutory deposit is two months’ rent. Additional guarantees may also be agreed (Article 36 of the LAU).
What is a seasonal lease for a relocating executive?
A seasonal lease is a type of tenancy covered by Article 3 of Spain’s Urban Leases Act. It is classified as a lease for a use other than permanent housing and expressly includes properties rented on a seasonal basis (BOE).
It is not the same as a nightly tourist rental or a standard residential lease that has simply been given a shorter duration.
A seasonal lease is defined not only by its duration, but by the existence of a genuine temporary purpose. A documented professional assignment with a start date and an expected duration may fall within this category whether it lasts three months or six.
By contrast, a lease intended to meet a permanent housing need does not automatically become a seasonal lease simply because the contract specifies a shorter term.
In practice, the contract should clearly identify:
- The reason for the temporary assignment.
- The expected duration.
- The person who will occupy the property.
- The conditions for extending or ending the stay.
- Any restrictions on assignment or subletting.
Renting a property generally to a company is also not necessarily treated in the same way for tax purposes as renting it to house a specifically identified employee. This distinction can determine whether the lease is subject to or exempt from VAT.
Hotel, private rental or professional corporate housing: which option suits the company?
A hotel offers considerable immediate flexibility, but the nightly cost can become high when an assignment lasts several weeks or months.
A private rental or accommodation booked through a platform may be competitive, although the level of professional management can vary considerably. Before booking it, the company should verify the applicable legal framework, documentation, invoicing and the provider’s contractual terms.
Professional corporate housing usually costs more than a conventional residential rental because it may include full furniture, active utilities, equipment, maintenance and management services.
Madrid’s average advertised residential rent of €23.70 per square metre provides a general market reference, but it does not directly represent the price of a furnished mid-term apartment. The final cost will depend on the neighbourhood, size, duration, equipment and services included (idealista, 2026).
Hotel
Cost: High nightly cost for longer stays.
Invoice: Usually includes hotel VAT.
Deposit: Usually not required in the same way as under a lease.
Extension: Flexible, but usually expensive.
Legal risk: Generally low.
Services: Cleaning, reception and other hotel services.
Private or platform-based rental
Cost: Variable.
Invoice: Depends on the provider and the tax treatment of the arrangement.
Deposit: Depends on the applicable contract.
Extension: Subject to availability and the agreed terms.
Legal risk: Variable depending on the provider and documentation.
Services: Variable depending on the accommodation and provider.
Professional corporate housing
Cost: Usually predictable and agreed for the duration of the stay.
Invoice: May be VAT-exempt and subject to Transfer Tax when the relevant requirements are met.
Deposit: Two months’ rent as the minimum statutory deposit for a seasonal lease.
Extension: Can be governed by a contractual extension clause.
Legal risk: Low when the contract, applicable registration and tax treatment are correct.
Services: Furniture, utilities, maintenance and management depending on the provider.
There is no single option that suits every assignment. The company should assess the total cost, length of stay, required services and contractual security together.
VAT or Transfer Tax? How accommodation may be invoiced to the company
Renting a residential property to a company may be exempt from VAT when it is used exclusively to house employees identified specifically and concretely in the contract.
The Spanish Tax Agency expressly states that when the tenant is a company that provides the property for its employees, the lease is exempt if the people using the property are specified concretely and individually in the contract (Spanish Tax Agency).
In addition to identifying the occupant, it is important that:
- The property is used exclusively for residential purposes.
- The tenant cannot freely designate different occupants after signing.
- Assignment and subletting to anyone other than the agreed occupant are restricted or prohibited.
- The provider does not supply services associated with the hotel industry.
When the arrangement is exempt from VAT, it is subject to Transfer Tax, or ITP, which is administered by Spain’s regional governments.
This does not mean that any property rented by a company is automatically VAT-exempt. The wording of the contract, the actual use of the property, the identity of the occupant and the services provided must be considered together.
The reduced VAT rate of 10% may apply when the accommodation includes services associated with the hotel industry, such as reception or regular cleaning during the stay. A one-off cleaning service at check-in and check-out does not necessarily amount to the continuous provision of hotel-style services.
What does Spain’s Single Rental Registry require?
Royal Decree 1312/2024 regulates Spain’s Single Rental Registry procedure and establishes obligations for short-term accommodation rental services marketed through online platforms (BOE).
When a property falls within its scope, the landlord must obtain a rental registration number before marketing it through the relevant platforms.
The number must be included in the listing published on the platform. It is also advisable to identify it in the contractual documentation and retain information demonstrating that the property complies with the applicable requirements.
It should not be assumed that every temporary lease is automatically subject to the Single Rental Registry. The following should be checked:
- How the property is marketed.
- Whether an online platform is involved.
- The purpose and duration of the lease.
- The type of accommodation.
- The applicable regional, municipal and civil regulations.
Spain’s Ministry of Housing provides specific information about temporary-use accommodation.
Deposits and additional guarantees
Article 36 of the LAU establishes a deposit equivalent to two months’ rent for leases classified as being for a use other than permanent housing, which includes seasonal leases.
This amount is the minimum statutory deposit. The parties may also agree additional guarantees, such as supplementary deposits or bank guarantees, within the limits of the applicable legislation.
The landlord must also comply with the relevant obligation to lodge the deposit with the competent regional authority.
Before signing a contract in Madrid, the company should clearly distinguish between:
- The monthly rent.
- The statutory deposit.
- Any additional guarantees.
- Utilities and services included.
- The conditions for returning the deposit.
- Any deductions for damage or outstanding amounts.
Why does accommodation affect an executive’s productivity?
In addition to reviewing the contract and invoice, HR should assess whether the apartment allows the employee to work and live normally from the first day.
Five particularly relevant factors are:
- A stable internet connection.
- A suitable workspace.
- Utilities active from the date of arrival.
- A functional kitchen and appropriate equipment.
- Maintenance with a clear response procedure for incidents.
An employee who arrives at a property without stable internet, a suitable desk or working utilities will need more time to adjust. This cost may not appear directly on the accommodation invoice, but it can affect the project that prompted the relocation.
At Nestic, we apply these criteria as part of the standard for our mid-term apartments, so the accommodation is ready for both living and working from the first day.
HR checklist before arranging accommodation
The LAU, Royal Decree 1312/2024 and the criteria published by the Spanish Tax Agency provide a basis for several essential checks before signing.
1. Documented temporary purpose
The contract should explain why the employee needs the accommodation and state the expected duration of the assignment.
2. Identification of the occupant
When the VAT exemption is intended to apply, the employee must be identified specifically and concretely in the contract.
3. Exclusively residential use
The property should not be used as a professional office, business premises or for other purposes incompatible with the exemption.
4. Assignment and subletting
The contract should regulate or prohibit replacing the occupant or assigning the property to third parties without authorisation.
5. Rental registration number where applicable
When the property falls within the scope of the Single Rental Registry, the number must appear in the listing published on the relevant platform.
6. Invoice and tax treatment
The company should determine whether the arrangement is VAT-exempt and subject to Transfer Tax or whether it includes VAT because hotel-style services are being provided.
7. Deposit and guarantees
The statutory deposit of two months’ rent should be clearly distinguished from any additional guarantee requested by the provider.
8. Contractual flexibility
The conditions for extending, shortening or cancelling the stay should be agreed in writing.
9. Services included
Internet, utilities, maintenance, cleaning and other services should be clearly stated in the contract or commercial proposal.
10. Municipal registration
When municipal registration is required, the company should confirm with the relevant town hall whether the employee can register at the property and what documents will be needed.
To delegate these checks and the management of the accommodation, you can explore Nestic’s corporate housing service for companies.
Frequently asked questions about housing relocating executives
Is a seasonal lease the same as a tourist rental?
No. A seasonal lease is governed by Article 3 of the LAU and responds to a specific temporary need.
Tourist rentals are governed by different regulations and normally involve a different purpose, marketing model and range of services.
How long can a seasonal lease last?
The LAU does not establish a general maximum number of months that, on its own, determines whether a contract qualifies as a seasonal lease.
What matters is that the housing need is genuinely temporary, that the reason is documented and that the contract does not conceal a permanent residential need.
Can the company recover VAT on the rental?
When the lease is exempt from VAT, there is no input VAT amount for the company to recover.
When the accommodation includes hotel-style services and the invoice includes VAT, the company will need to assess whether that VAT can be recovered through its VAT return, subject to the applicable tax and documentary requirements.
What deposit applies to a seasonal lease?
The minimum statutory deposit is two months’ rent under Article 36 of the LAU for leases classified as being for a use other than permanent housing.
The contract may include additional guarantees, which should be clearly distinguished from the statutory deposit.
What happens if the accommodation has no rental registration number?
The first step is to determine whether the accommodation falls within the scope of the Single Rental Registry.
When registration is required and the accommodation is marketed through a platform, the number must appear in the listing. If it does not, HR should ask the provider to clarify the situation before signing.
Can the relocating executive register at the property with the local council?
It may be possible when the employee genuinely resides at the property, even under a temporary contract.
The procedure and required documentation may vary, so they should be confirmed with the relevant town hall before promising this option to the employee.
What HR should take away from this guide
Housing a relocating executive in Madrid should not be arranged solely on the basis of the monthly price.
A properly documented seasonal lease should explain the temporary purpose, identify the occupant and clearly establish the duration, guarantees, services and conditions for extending or cancelling the stay.
The company should also verify the tax treatment of the arrangement and, where applicable, the existence of a rental registration number.
Before arranging the next assignment:
- Confirm the type of contract.
- Identify the employee who will occupy the property.
- Check whether the invoice should include VAT.
- Verify the registration where applicable.
- Distinguish the statutory deposit from additional guarantees.
- Confirm which services are included.
- Document the extension and cancellation conditions.
To choose the most suitable location, you can also read our guide to the best Madrid neighbourhoods for every lifestyle.