Spain plans to raise taxes on holiday rentals so that they pay "like a business", Prime Minister Pedro Sanchez said on Monday, as residents of the country's main cities grapple with soaring rents.

"It isn't fair that those who have three, four or five apartments as short-term rentals pay less tax than hotels or workers," Sanchez said at an event on affordable housing in Madrid.

Housing has become a major issue in Spain as it struggles to balance promoting tourism, a key driver of its economy, and concerns over high rents due to gentrification and landlords shifting to more lucrative, short-term tourist rentals.

Sanchez also promised tougher measures to combat fraud around such rentals, without going into details. Last month, authorities opened an investigation into Airbnb for failing to delete thousands of misleading rental offers from its platform.