Spain: The Spanish government has unveiled a proposal to impose a 21 per cent value-added tax (VAT) on short-term tourist rentals, aiming to address the nation’s escalating housing shortage and the impact of mass tourism.
The proposed rate – more than double the 10 per cent currently applied to hotel stays – would apply to stays of fewer than 30 days, a common duration for holiday lets. At present, short-term rentals in mainland Spain are exempt from VAT, creating a significant disparity with the hotel sector.
The initiative forms part of a wider housing reform bill introduced by Spain’s Socialist-led minority government. It follows growing concerns that the proliferation of short-term rentals is reducing housing availability for local residents, particularly in high-demand areas such as the Balearic and Canary Islands.
Housing Minister Isabel Rodríguez said: “Homes are for living in… the measures seek to guarantee the right to rental housing for families.”
The Bank of Spain estimates a shortfall of around 450,000 homes nationwide. In some tourist-heavy regions, up to half of the housing stock is now used for short-term stays or owned by foreign investors.
The proposed bill also includes new taxes on vacant and second homes, as well as a clause to tax non-EU citizens up to 100 per cent on property purchases unless the property is their main residence.
The move has drawn criticism from industry groups. Barcelona-based association Apartur warned that applying a 21 per cent VAT to short-term lets is “discriminatory” and could seriously impact the sector.
Meanwhile, several regional governments are already taking independent action. Barcelona, for example, has pledged to eliminate all short-term rental licences by 2028.
As Spain continues to grapple with the balance between tourism and housing access, the proposed VAT reform marks a significant policy shift – one that could have ripple effects across Europe’s short-term rental landscape. The move follows Spain’s recent decision to remove almost 66,000 Airbnb listings that reportedly violate tourist accommodation regulations.
