VAT Increase to 21% on Tourist Rentals: Government Announcement

The Government of Spain has announced, as part of a housing package of measures from June 2026, its intention to raise the VAT on tourist apartments that provide hotel-type services from the current 10% to 21%. This is a proposal under processing, not an approved law. It only affects tourist rentals that include services typical of the hotel industry (reception, cleaning during the stay, periodic linen change, etc.); rentals without these services remain exempt from VAT.

 

1. The Government’s Announcement

Following the Council of Ministers meeting at the end of June 2026, the Government presented a housing package of measures with two blocks: stability of residential rentals and mobilization of affordable housing.

Measures for rental stability

• Regulation of seasonal rentals and room rentals
• Extraordinary extension of rentals
• Mandatory written contracts
• Personal income tax (IRPF) rebates for those who lower rental prices

Measures to mobilize affordable housing

• VAT increase to 21% for tourist rentals
• Administrative streamlining measures

According to official data cited by the Government, Spain reached a historic high of approximately 400,000 tourist apartments in 2024. The stated goal is to curb their growth and free up housing for permanent rental.

 

2. How are tourist rentals taxed today? (before any increase)

According to the Spanish Tax Agency, VAT treatment depends on whether the landlord provides or does not provide services typical of the hotel industry:

Type	Current VAT treatment
Without hotel services	Exempt from VAT (subject to ITP transfer tax)
With hotel services	Reduced VAT of 10%

Official source: Tax Agency, Article 5.one.c LIVA, electronic office — query on VAT for tourist apartment rentals

It is precisely this second category —the one already taxed at 10%— that the Government proposes to raise to 21%.

 

3. What counts as a “hotel service” for VAT purposes?

A hospitality service exists when customer attention goes beyond simply making a property available, and includes ongoing reception, periodic cleaning during the stay, and regular changes of bed and bath linen.

✅ YES considered a hotel service (taxed at 10% VAT; if the measure is approved, it would rise to 21%)

• Permanent and ongoing reception and customer service
• Periodic cleaning during the stay (not only at check-in/check-out)
• Periodic change of bed and bath linen
• Additional services: laundry, luggage storage, newspapers, reservation management, food and catering.

❌ NOT considered a hotel service (the rental remains exempt from VAT)

• Cleaning only at the start and end of the contracted period
• Linen change only at the start and end
• Cleaning of common areas of the building (entrance, stairs, elevators) or the residential development
• Technical assistance and maintenance (plumbing, electricity, locksmith, appliances)

 

4. Potential Impact if the Increase is Approved

Tax impact: an 11 percentage point increase in VAT payable, going from 10% to 21%

Commercial impact: pressure on margins. Agencies and owners would have to choose between passing on the full increase to the final price or absorbing part of the cost by reducing their margin.

 

5. Frequently Asked Questions

Is the VAT increase to 21% on tourist rentals already in force? No. As of July 2026, it is a proposal announced by the Government as part of a housing package of measures. Therefore, it is not an approved law, so its processing, final timeline, and definitive wording may change. That is why it is always important to consult a lawyer and tax specialist, such as Imont Legal & Taxes.

Who would be affected by the VAT increase if approved? Only tourist rentals that provide services typical of the hotel industry (those currently taxed at 10%). Tourist rentals without these services would remain exempt from VAT.

What is the difference between VAT-exempt tourist rental and VAT-liable tourist rental? The difference is not the type of property, but the services provided. If there is only check-in/check-out cleaning and maintenance, the rental is exempt. If there is ongoing customer attention, cleaning during the stay, and periodic linen changes, it is considered hotel activity and is subject to VAT.

How much would the VAT increase exactly be? From 10% (current reduced rate) to 21% (general rate), that is, 11 percentage points, for tourist rentals with hotel services.

What should real estate agencies do in the meantime? Review which part of their portfolio is currently taxed at 10% or exempt, consult a tax advisor about their specific case, monitor the legislative process, and review contracts with owners and pricing policies in view of a possible change.

 

6. Practical Recommendations

1. Review your current position: identify which part of your tourist rentals is currently taxed at 10% and which is exempt.
2. Consult a tax advisor about the specific impact according to your business model.
3. Monitor the process: a proposal does not guarantee approval on the same terms.
4. Update management systems if the measure is approved, to reflect the new tax rate.
5. Review contracts: study how the VAT increase would affect your contracts with owners and your pricing policies with clients.

Legal notice: This content is for informational purposes only and does not constitute legal or tax advice.

At Imont Legal & Taxes we help you review your current tax situation and prepare for this regulatory change. Contact us at info@imontlegal.com

Official source cited: Spanish Tax Agency. Last updated: July 2026.