The new measures were announced this week by the left-wing coalition council of Manuela Carmena in a bid to tackle mass tourism which residents complain is responsible for driving up rent and pushing out locals.
The raft of regulations are designed "to preserve residential use of buildings, putting a stop to permanent use (by tourists) and replace it with temporary, thus preventing housing from becoming accommodation exclusively for tourists", according to the plans announced on Wednesday by José Manuel Calvo, secretary for sustainable urban planning.
Different restrictions will be applied to four different zones of the city, with the most restrictive places on the Centro district that includes the areas of Malasaña, Chueca, Sol, La Latina and Lavapiés.
The new regulations will prohibit tourist flats from being rented out more than 90 days a year.
They will also prevent entire apartment buildings being converted into tourist accommodation unless they have the same licencing as a hotel and a moratorium will be placed on issuing such licences for at least a year.
Tourist flats in the Central zone will require a separate entrance to the street from permanent residents in the block, effectively ruling out all but a few ground floor properties.
Madrid is just the latest city to introduce measures to combat the rising number of apartments converted into tourist accommodation.
Barcelona has led the fight against tourism, cracking down on unlicensed hotel rentals and imposing steep fines.
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Anti-tourism graffiti in Madrid's Plaza Dos de Mayo. Photo: Fiona Govan
Residents complain that the proliferation of tourist flats advertised through portals such as Airbnb and HomeAway are driving up rent in the city.
They also complain of anti-social behaviour by tourists and annoyance with continual turnover of visitors dragging suitcases.
Madrid City Hall insisted that the capital was not yet overrun with tourists and that in fact only 0.54 percent of all residences in the city were dedicated to tourism. But in the popular central district that rises to 6 percent.