VAT (IVA) on tourist rentals in Spain: the 21% proposal, the current 10% regime and what short-let landlords need to know

The current rules, the proposed change, and where income tax fits in for owners letting property to holidaymakers on the Costa del Sol and beyond.

Short-term tourist rentals in Spain sit at a VAT crossroads. Under the law in force today, most private landlords who let a furnished apartment to holidaymakers without providing hotel-style services are exempt from IVA (VAT). The Spanish government announced on 29 June 2026 a plan to raise IVA on pisos turisticos to the standard 21% rate via a real decreto-ley, but that measure requires Congressional convalidation and is not yet law. This guide explains the current IVA treatment, the proposed change, and how IVA interacts with the income tax obligations that every landlord, resident or non-resident, already faces.

What IVA rate applies to tourist rentals in Spain today?

Under current law, the IVA treatment of a tourist rental depends on whether the landlord provides hotel-style complementary services. Article 20.Uno.23.b of Ley 37/1992 (the Spanish IVA law) exempts the leasing of buildings or parts of buildings destined exclusively for housing, including garages and furnishings let with them. Tourist lets fall under this exemption when no hotel services are offered.

Article 20.Uno.23.e’ of the same law removes the exemption for furnished apartments when the landlord provides complementary hotel services such as restaurant service, cleaning, laundry or similar amenities. Those rentals are taxed at the reduced 10% IVA rate under Article 91.Uno.2.2 of Ley 37/1992, which covers hosteleria services. The standard 21% general rate in Article 90 applies only if the activity is reclassified as a non-hotel service.

The Agencia Tributaria’s own guidance on tourist apartment taxation draws the line clearly: cleaning only at entry and exit, linen changes only at entry and exit, and maintenance for repairs are not hotel services, so the rental stays IVA-exempt. Reception staffed continuously, periodic cleaning during the stay, regular linen changes, or food and restaurant services are hotel services, triggering the 10% IVA obligation.

What did the government announce on 29 June 2026?

On 29 June 2026, following a Council of Ministers press conference, government spokesperson Elma Saiz announced a broad housing reform package structured in two blocks. The first aims to lower rents, stabilise contracts and combat fraud. The second focuses on mobilising affordable housing and includes the proposal to raise IVA on pisos turisticos from the current exempt or 10% bracket to the standard 21% rate, as reported by El Independiente.

The package will be enacted through a real decreto-ley (a royal decree-law) that the government expects to approve in July 2026. It must then be convalidated by the Congress of Deputies, a process required for decree-laws under the Spanish Constitution. No date for Congressional approval has been confirmed, and until the decree is published in the BOE, the current IVA treatment under Ley 37/1992 remains fully in force.

The proposal, as described in reporting from BDO and other tax advisory firms, would apply the 21% IVA rate to short-term leases under 30 nights in municipalities with more than 10,000 inhabitants, regardless of whether hotel services are provided. It would also remove the 10% reduced rate for tourist rentals that currently qualify for it through hotel services, pushing all short-term tourist accommodation to the 21% general rate.

How does the current IVA treatment work in practice?

The Agencia Tributaria classifies tourist apartment income based on the nature and extent of services provided. The distinction matters because it determines not only the IVA treatment but also whether rental income is classed as capital income (rendimientos del capital inmobiliario) or as economic activity income (rendimientos de actividades economicas).

Rental type	IVA treatment	Income classification	AEAT guidance
Long-term residential (LAU habitual)	Exempt (Art 20.Uno.23.b)	Capital income	Standard residential letting
Short-term tourist, no hotel services	Exempt (Art 20.Uno.23.b)	Capital income	Tourist let, entry/exit cleaning only
Short-term tourist, with hotel services	10% reduced rate (Art 91)	Economic activity	Hotel services trigger IVA
Tourist let, full-time employee	Exempt or 10% as above	Economic activity	Employee shifts to economic activity
Proposed: short-term under 30 nights	21% standard rate (not yet law)	Depends on services	Pending Congressional approval

The AEAT guidance specifies that when a landlord employs at least one full-time worker to manage the tourist rental activity, the income is automatically classified as rendimientos de actividades economicas, regardless of whether hotel services are provided. This classification affects how the landlord deducts expenses and files returns, though it does not change the IVA rate applied to the rental itself.

What is alquiler de temporada and where does it fit?

Alquiler de temporada is a seasonal lease under Article 3 of Ley 29/1994 (the Ley de Arrendamientos Urbanos, or LAU). It covers temporary housing needs, such as a work assignment, a study period, or a seasonal stay, distinct from the permanent residential letting governed by Article 2 of the LAU. Seasonal leases are treated as arrendamiento para uso distinto de vivienda, which places them in the same IVA category as tourist lets for VAT purposes.

The government’s July 2026 housing package also proposes new regulation of seasonal leases and room rentals. The stated aim is to prevent alquiler de temporada from being used as a workaround to bypass the tenant protections that apply to permanent residential contracts. Landlords using seasonal contracts for short holiday lets should follow this legislation closely, because the new rules could tighten the conditions under which a seasonal designation is valid.

For property owners on the Costa del Sol, the distinction between a genuine seasonal let and a de facto tourist rental matters for both IVA and local licensing. Andalusia requires a VFT (vivienda de uso turistico) registration for any property marketed as a tourist let, and the short-let rules introduced in February 2025 added town-hall authorisation and 60% community-of-owners approval as further conditions.

Does IVA interact with income tax on rental revenue?

IVA and income tax are separate taxes with different bases. IVA is a consumption tax charged on the rental service to the guest. Income tax is levied on the landlord’s net rental profit. The proposed IVA change does not alter income tax obligations.

Non-resident landlords file Modelo 210 under the IRNR regime, paying 19% on gross rent if resident in the EU or Iceland/Norway, or 24% if resident elsewhere. The IRNR income tax regime governs this obligation. Resident landlords declare rental income within their annual IRPF return, where the rental income tax reduction can apply under certain conditions.

For short-let compliance, the Andalusia-specific tax compliance guide covers the combination of Modelo 210 filing, deductible expenses and IVA treatment that applies to tourist lets on the Costa del Sol. Landlords operating through platforms such as Airbnb should also be aware that DAC7 platform reporting means the Agencia Tributaria receives detailed information about rental income directly from the platforms, making accurate IVA and income tax reporting more important than ever.

What happens if the 21% proposal becomes law?

If the real decreto-ley is approved and convalidated, short-term tourist rentals under 30 nights in municipalities with more than 10,000 inhabitants would be subject to the 21% IVA rate. This would apply whether or not the landlord provides hotel-style services, and the 10% reduced rate would no longer be available for tourist lets.

The practical consequences would be significant. Landlords would need to register for IVA, issue invoices with 21% IVA to guests, file quarterly IVA returns (Modelo 303) and an annual summary (Modelo 390). They would gain the right to deduct input IVA on costs directly linked to the rental activity, such as cleaning, maintenance, furniture and utilities, which is not possible under the current exemption.

The measure would also make tourist flats more expensive than hotels on a per-night basis, since hotels currently benefit from the 10% reduced rate. The stated policy goal is to mobilise tourist housing stock back into the residential rental market, though the effectiveness of that approach depends on whether landlords absorb the cost, pass it to guests, or exit the short-let market.

What should landlords do now?

Until the decree is published in the BOE, no change is required. Landlords currently IVA-exempt should continue to file income tax on their rental profits, follow VFT registration rules, and keep records of all rental income. Those already charging 10% IVA for hotel-service rentals should continue under the current rules.

Once a real decreto-ley is published, landlords should consult a tax advisor (gestor or asesor fiscal) to determine whether their activity falls within the new 21% scope, register for IVA if required, and adjust their booking and invoicing systems. The non-resident property holding taxes guide covers the broader tax framework for owners letting from abroad.

The key point is that the 21% rate is a proposal, not a law. Stating it as settled law would mislead readers and could lead to incorrect pricing decisions. The measure could be modified during Congressional debate, withdrawn, or delayed, as has happened with previous housing proposals.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.