Holiday rentals
Spain’s new 10pc VAT on holiday lets: What owners need to know
Spain has introduced a new 10% VAT on short-term property lettings that could affect thousands of holiday-home owners, including those who only rent out their properties occasionally.
The legislation is already in force, but parliamentary approval is still pending and important practical questions remain unanswered.
What do the new rules say?
The measure forms part of Royal Decree-law 29/2026, published on 7 October, which introduces a range of housing measures. Although the decree came into force on 8 October, the new VAT rules are scheduled to apply from 1 December 2026.
Under the legislation, furnished properties rented to the same tenant for 30 nights or fewer will attract VAT at 10%, even when no hotel-style services are provided.
An exception applies to accommodation in the landlord’s habitual residence. Longer lettings generally remain exempt unless hotel-style services are provided, in which case 10% VAT already applies.
Importantly, the new rule is based on the duration of the letting, not whether the property is officially registered as tourist accommodation.
What does this mean for property owners?
Until now, owners letting holiday accommodation without hotel-style services have generally been exempt from VAT. The new rules would change that.
An owner currently charging €1,000 for a week’s accommodation could have to charge €1,100 including VAT, or absorb the tax and accept lower net income.
But the implications go beyond pricing. Private individuals can charge VAT without setting up a company, but owners affected by the new rules would generally have to register for VAT purposes with the Spanish Tax Agency, normally using Form 036, and submit periodic VAT returns using Form 303.
That means more paperwork, record-keeping and potentially accountancy costs, even for foreign owners who only rent out their Spanish holiday homes for a few weeks each year.
On the positive side, owners charging VAT may be entitled to reclaim VAT on qualifying expenses, subject to the normal restrictions, particularly where properties are also used privately.
What remains unclear?
Although the basic tax obligation is established, several practical questions remain, particularly for occasional and non-resident landlords.
How will the new rules apply to bookings made, or deposits collected, before December? How will rental platforms and property managers handle VAT collection and invoicing? What specific guidance will the Tax Agency provide for private owners who have never had to deal with VAT before?
Further clarification would be welcome before owners are expected to comply.
Will the new VAT rules survive?
Nobody knows. The decree is currently in force but must be ratified by the Permanent Deputation of Congress, which is expected to vote on 12 November, ahead of Spain’s general election on 29 November.
An earlier version of the housing legislation was rejected by Congress on 2 October, so approval cannot be taken for granted.
If the decree is rejected again, the new VAT measures will fall away before their scheduled introduction on 1 December. And if the decree is passed but the Socialist party running the country in coalition with the hard left lose the next General Election due to be held on 29 November, an incoming rightwing government would probably repeal the decree.
For now, holiday-home owners should be aware of the potential changes and their implications, but there is still considerable uncertainty about what will actually happen.
We should know more after the parliamentary vote, assuming the Government’s latest housing legislation survives.
Spain has introduced a new 10% VAT on short-term property lettings that could affect thousands of holiday-home owners, including those who only rent out their properties occasionally.
The legislation is already in force, but parliamentary approval is still pending and important practical questions remain unanswered.
What do the new rules say?
The measure forms part of Royal Decree-law 29/2026, published on 7 October, which introduces a range of housing measures. Although the decree came into force on 8 October, the new VAT rules are scheduled to apply from 1 December 2026.
Under the legislation, furnished properties rented to the same tenant for 30 nights or fewer will attract VAT at 10%, even when no hotel-style services are provided.
An exception applies to accommodation in the landlord’s habitual residence. Longer lettings generally remain exempt unless hotel-style services are provided, in which case 10% VAT already applies.
Importantly, the new rule is based on the duration of the letting, not whether the property is officially registered as tourist accommodation.
What does this mean for property owners?
Until now, owners letting holiday accommodation without hotel-style services have generally been exempt from VAT. The new rules would change that.
An owner currently charging €1,000 for a week’s accommodation could have to charge €1,100 including VAT, or absorb the tax and accept lower net income.
But the implications go beyond pricing. Private individuals can charge VAT without setting up a company, but owners affected by the new rules would generally have to register for VAT purposes with the Spanish Tax Agency, normally using Form 036, and submit periodic VAT returns using Form 303.
That means more paperwork, record-keeping and potentially accountancy costs, even for foreign owners who only rent out their Spanish holiday homes for a few weeks each year.
On the positive side, owners charging VAT may be entitled to reclaim VAT on qualifying expenses, subject to the normal restrictions, particularly where properties are also used privately.
What remains unclear?
Although the basic tax obligation is established, several practical questions remain, particularly for occasional and non-resident landlords.
How will the new rules apply to bookings made, or deposits collected, before December? How will rental platforms and property managers handle VAT collection and invoicing? What specific guidance will the Tax Agency provide for private owners who have never had to deal with VAT before?
Further clarification would be welcome before owners are expected to comply.
Will the new VAT rules survive?
Nobody knows. The decree is currently in force but must be ratified by the Permanent Deputation of Congress, which is expected to vote on 12 November, ahead of Spain’s general election on 29 November.
An earlier version of the housing legislation was rejected by Congress on 2 October, so approval cannot be taken for granted.
If the decree is rejected again, the new VAT measures will fall away before their scheduled introduction on 1 December. And if the decree is passed but the Socialist party running the country in coalition with the hard left lose the next General Election due to be held on 29 November, an incoming rightwing government would probably repeal the decree.
For now, holiday-home owners should be aware of the potential changes and their implications, but there is still considerable uncertainty about what will actually happen.
We should know more after the parliamentary vote, assuming the Government’s latest housing legislation survives.
Barcelona City Council has approved plans to increase property taxes by up to 150% on owners with multiple tourist rental licences, adding another financial burden to a sector already facing extinction in 2028.
Barcelona City Council’s Economy and Finance Committee has approved a proposal to increase the annual property tax (IBI) on tourist rental properties, with the biggest increases targeting owners and operators holding four or more tourist accommodation licences.
The measure was supported by the Socialists (PSC), Barcelona en Comú and ERC, with Junts abstaining and the PP and Vox voting against.
Under the proposal, the increases would be:
- 150% for holders of four or more tourist rental licences, affecting approximately 6,000 licences, or 60% of the city’s total.
- 100% for holders of two or three licences, affecting around 1,200 licences, or 11% of the total.
- No increase for owners holding just one tourist rental licence.
The proposal is not yet final. It must go through a period for objections before being submitted for approval at the December council meeting.
Another blow to Barcelona’s tourist rental sector
Deputy Mayor for Economic Affairs Jordi Valls explained that the objective is to make tourist rentals less attractive financially until the city’s planned elimination of tourist rental licences takes effect in 2028.
Valls argued that the tax increases primarily target companies operating tourist accommodation as a business, rather than individual owners renting out a single property.
Barcelona currently has around 10,000 licensed tourist flats, all of which are scheduled to lose their tourist rental licences in 2028 under the city’s controversial plan to eliminate this form of accommodation.
The latest tax proposal adds to the growing regulatory and financial pressure on the sector, potentially reducing profitability well before the licences themselves disappear.
Will higher taxes solve Barcelona’s housing shortage?
Supporters of the measure argue that discouraging tourist rentals will help tackle Barcelona’s housing problems. However, there is no guarantee that increasing taxes on tourist accommodation will make more homes available for long-term residential use.
The opposition has questioned both the effectiveness and proportionality of the proposal. Junts warned of growing legal uncertainty, whilst the PP described the increase as a punitive tax measure targeting a particular group of property owners.
Vox argued that the measure does nothing to guarantee more residential housing, suggesting that the council would achieve more by encouraging construction and removing restrictions on development.
The underlying problem remains Barcelona’s chronic shortage of housing supply. Increasing taxes on existing accommodation, or eliminating tourist rentals altogether, does nothing directly to encourage the construction of new homes.
For owners and investors in Barcelona’s tourist rental market, the message from City Hall is increasingly clear: the authorities intend to make the business less attractive long before the planned ban arrives in 2028.
Author: 
Mark Stücklin
Posted on
Barcelona City Council has approved plans to increase property taxes by up to 150% on owners with multiple tourist rental licences, adding another financial burden to a sector already facing extinction in 2028.
Barcelona City Council’s Economy and Finance Committee has approved a proposal to increase the annual property tax (IBI) on tourist rental properties, with the biggest increases targeting owners and operators holding four or more tourist accommodation licences.
The measure was supported by the Socialists (PSC), Barcelona en Comú and ERC, with Junts abstaining and the PP and Vox voting against.
Under the proposal, the increases would be:
- 150% for holders of four or more tourist rental licences, affecting approximately 6,000 licences, or 60% of the city’s total.
- 100% for holders of two or three licences, affecting around 1,200 licences, or 11% of the total.
- No increase for owners holding just one tourist rental licence.
The proposal is not yet final. It must go through a period for objections before being submitted for approval at the December council meeting.
Another blow to Barcelona’s tourist rental sector
Deputy Mayor for Economic Affairs Jordi Valls explained that the objective is to make tourist rentals less attractive financially until the city’s planned elimination of tourist rental licences takes effect in 2028.
Valls argued that the tax increases primarily target companies operating tourist accommodation as a business, rather than individual owners renting out a single property.
Barcelona currently has around 10,000 licensed tourist flats, all of which are scheduled to lose their tourist rental licences in 2028 under the city’s controversial plan to eliminate this form of accommodation.
The latest tax proposal adds to the growing regulatory and financial pressure on the sector, potentially reducing profitability well before the licences themselves disappear.
Will higher taxes solve Barcelona’s housing shortage?
Supporters of the measure argue that discouraging tourist rentals will help tackle Barcelona’s housing problems. However, there is no guarantee that increasing taxes on tourist accommodation will make more homes available for long-term residential use.
The opposition has questioned both the effectiveness and proportionality of the proposal. Junts warned of growing legal uncertainty, whilst the PP described the increase as a punitive tax measure targeting a particular group of property owners.
Vox argued that the measure does nothing to guarantee more residential housing, suggesting that the council would achieve more by encouraging construction and removing restrictions on development.
The underlying problem remains Barcelona’s chronic shortage of housing supply. Increasing taxes on existing accommodation, or eliminating tourist rentals altogether, does nothing directly to encourage the construction of new homes.
For owners and investors in Barcelona’s tourist rental market, the message from City Hall is increasingly clear: the authorities intend to make the business less attractive long before the planned ban arrives in 2028.
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