BREAKING NEWS | Spain ratifies housing decree introducing 10% VAT on short-term rentals

Spain has ratified a major housing decree introducing new tax and regulatory measures affecting short-term rental accommodation, following a nationwide general strike over housing affordability and wider economic concerns.

On Thursday 12 November, the Diputación Permanente, the parliamentary body exercising Congress’s functions ahead of the 29 November general election, voted 35 to 34 to ratify Royal Decree-Law 29/2026.

The decree has been in force since 8 October, but its new VAT provisions will take effect on 1 December 2026.

The vote came just 24 hours after nationwide demonstrations calling for greater access to affordable housing, placing Spain’s housing crisis at the centre of the political debate.

A separate decree proposing automatic extensions to residential rental contracts was rejected by the same narrow margin, with 34 votes in favour and 35 against.

What has been approved?

The legislation introduces several measures affecting property owners and the rental market, but the most significant development for short-term rental operators is the change to VAT.

From 1 December 2026, furnished apartments and homes rented to the same guest for no more than 30 nights will generally be subject to 10% VAT, where the accommodation is not the landlord’s habitual residence.

Previously, many tourist rentals were exempt from VAT unless hotel-style services were provided.

The new measure therefore represents a substantial change for operators whose accommodation has historically fallen outside the VAT system.

The legislation also introduces tighter controls on seasonal and room rentals, intended to prevent temporary contracts from being used to circumvent protections for residential tenants.

Another significant provision allows municipalities in officially designated housing-pressure areas to introduce higher property-tax charges (Impuesto sobre Bienes Inmuebles, or IBI) on tourist accommodation.

These surcharges may reach 50%, increasing to 100% for owners of two or more tourist properties and 150% for owners of four or more.

However, they are not automatically applied nationwide and would depend on decisions by individual municipalities.

The wider decree also includes measures to protect vulnerable tenants, extend certain residential rental contracts and encourage affordable housing provision.

According to idealista’s reporting on the parliamentary vote, the principal decree has now been ratified, while the separate proposal for automatic rental-contract renewals has been rejected.

What does this mean for professional property managers?

The immediate concern for Spain’s STR sector is how the new VAT requirements will affect pricing, existing reservations and relationships with property owners.

Operators managing properties that have previously been VAT-exempt will need to establish how the legislation applies to their businesses, including whether they are responsible for collecting and accounting for the tax.

The timing is particularly challenging, with the new VAT provisions scheduled to take effect in less than three weeks.

Property managers may need to review advertised prices, booking conditions and agreements with owners, particularly where accommodation is sold through multiple distribution channels.

There are also questions about the treatment of reservations made before 1 December for stays taking place after that date, and how the new rules interact with existing tax arrangements.

These are matters that operators should clarify with their tax advisers rather than assume that the same treatment applies to every property or management structure.

Beyond the immediate financial implications, the legislation reflects the growing political pressure surrounding short-term rentals in Spain.

Housing affordability has become a central issue in many destinations, and the government’s approach increasingly links tourist accommodation to the wider availability of residential housing.

For professional property managers, the challenge will be adapting to the new requirements while demonstrating the economic contribution of their businesses and the distinction between professionally managed accommodation and other forms of property investment.

What happens next?

With the new VAT provisions scheduled to take effect on 1 December, Spanish property managers have little time to assess how the changes could affect their businesses.

Questions remain around existing reservations, pricing, owner agreements and the practical application of the new rules across different accommodation and management models.

Next week on SCALE Wire, we’ll take a closer look at the implications for Spain’s short-term rental sector, including feedback from professional property management companies on how they expect the legislation to affect their operations and the wider industry.