The Spanish property sector is undergoing a major legal shake‑up. Labour inspectors are cracking down on agencies that classify full‑time agents as “autónomos falsos” — fake self‑employed workers.
This rings particularly true for us in Granada. Walking through the city centre looking into other estate agent’s offices I have frequently been amazed at the spacious brightly-lit spaces containing an array of four or five desks and a window full of properties selling at prices substantially lower than our typical properties. They are either selling vast numbers of properties (which they aren’t), charging much higher commissions, or they’re doing something I’m not.
And then it was explained to me. Those smartly dressed agents were “self-employed”, paid nothing unless they both take on a property and then sell it. Fair enough, but only if the agency pays them a salary and a share of the commission. That way they enjoy the same rights as other workerswho are required to come into the workplace on a daily basis, use the company systems, and follow company instructions.
Because, in theory they are self employed, the agency avoids paying the high social charges on top of their salary, which in Spain is approximately 35% of total emoluments (salary and commission). Not only are such agencies depriving the tax authorities of revenue, they are also depriving the agents of their rights to holiday and sick pay, pension contributions, and a final payment at the end of service (finiquito).
It is a moral as well as an economic issue.If an employee can show (say) three years of permanent employment with a real estate agency, even though their net salary varies according to each month’s commission, they are much more likely to be able to access a mortgage loan than a person who relies on a sub-contract arrangement that can be terminated at a moment’s notice with no consequence, or expense, for the employer.
That is the reason why at Another Way Of Life we have only ever employed people on a full permanent contract (contrato indefinido).
All across Spain, but particularly in the cities and on the coast, agents work under freelance contracts but operate under full control of their agency. Fortunately, inspectors say that’s no longer acceptable.
Why It Matters
If an agent is required to be in the office, they are legally employees — no matter what their contract says. Agencies found misclassifying staff face fines of €3,750 to €12,000 per worker plus four years of unpaid social security contributions.
The most visible example is Engel & Völkers, fined €6.4 million in Valencia and €16 million in Barcelona for 969 misclassified agents. The scale of these penalties has sent shockwaves through the sector.
For smaller firms in southern Spain, the message is clear: either give genuine independence to freelance collaborators, which is impossible to do if the team is small, or hire them properly. Those that don’t risk ruinous sanctions.
A Chance for Professionalisation
While some agencies resist change, others see an opportunity. Firms that employ agents fairly gain stability, loyalty, and credibility with both clients and staff. It also helps raise the bar for service quality and ethics — long‑standing issues in Spain’s unregulated property market. The reason we, at Another Way Of Life, have never joined one of the MLS (Multiple Listing Systems) for properties, collaborating with dozens of other agencies who share properties, is that in our limited experience so many were either incompetent or unprofessional. Better to have fewer listings but know the product.
Andalucía still lacks a regional licensing system like Catalunya’s, so this national crackdown may become the main driver of professionalisation. Let’s hope so. As inspectors increase audits and funding, the safest path forward is compliance.
For international buyers and investors, a more regulated, transparent property industry is good news. It builds confidence in Spanish real estate — particularly in Andalucía, where the market’s reputation depends on trust as much as sunshine.