Government plans 21% VAT on short-term tourist rentals

Summary

• The Spanish government is seeking parliamentary agreement to apply the standard 21% VAT rate to short-term tourist rentals of under 30 days, replacing the current regime where most such lets are VAT-exempt (where no hotel-style services are provided) or pay a reduced 10% rate. Contained in a wider housing decree-law package presented as a “bold and cross-cutting” response to the housing crisis, the measure would make tourist flats pay more VAT than hotels. [vatupdate.com], [europesays.com]
• The reform targets around a third of Spain’s roughly 94 million annual visitors who rent private homes rather than hotels, aiming to curb over-tourism and address a Bank of Spain-estimated shortage of about 450,000 housing units amid resident protests. The wider package also includes a proposed 100% property-acquisition tax on non-EU non-resident buyers, higher levies on vacant homes, mandatory written tenancy agreements, longer contract durations, and IRPF tax incentives for landlords who lower rents. [vatupdate.com], [idealista.com]
• The change would significantly alter cost structures for platforms such as Airbnb, Booking.com and Vrbo, especially in high-demand Balearic and Canary Islands and cities like Barcelona, Valencia and Málaga. Affected owners would need to register for VAT, charge 21% and file quarterly Modelo 303 returns—though they could deduct input VAT on property purchase, renovations and furnishings. The proposal is not yet law; commentators expect it may again draw EU scrutiny and hotel-lobby controversy. [taxadora.com], [taxadora.com]

• VATupdate.com
• idealista/news
• Majorca Daily Bulletin