Renting · · 9 min read
10% VAT on Holiday Lets in Spain from 1 December 2026: Who It Affects and What Happens If the Decree Is Not Ratified on 12 November
From 1 December 2026, holiday lets and short stays of 30 nights or fewer in Spain will be subject to 10% VAT (IVA) under Royal Decree-Law 29/2026. But it all depends on the vote expected on 12 November in the Standing Committee of the Spanish Congress. We explain which lettings are affected and which are not, what owners have to do, a worked example for a holiday flat in Madrid and what happens if the decree is ratified or lapses.
As of 20 October 2026, anyone who lets a flat to tourists or for short stays in Spain has a date circled in the calendar: 1 December. On that day, unless something changes, lettings of furnished homes for 30 nights or fewer will no longer be exempt from IVA (Spanish VAT) and will be taxed at 10%, the rate hotels already pay. This is set out in Royal Decree-Law 29/2026 of 6 October, published in the BOE (Spain's Official State Gazette) on 7 October.
But there is another date first: 12 November, the day on which the Diputación Permanente (Standing Committee) of the Spanish Congress is expected to vote on whether to ratify the decree. If it is ratified, VAT arrives on 1 December; if not, the decree lapses and the measure never comes into force. We explain what the law says, what is still unclear and what to prepare in each case.
What Royal Decree-Law 29/2026 says about VAT
Until now, the Spanish VAT Act (Law 37/1992) has exempted the letting of homes, furnished ones included, unless the owner provides hotel-type services. That is why holiday flats offering accommodation only do not charge VAT. Article 7 of Royal Decree-Law 29/2026 changes the rule: it amends article 20 of the Act, which governs the exemption, and article 91, which sets the reduced rates.
As regards VAT, taxation at the reduced rate of 10 per cent is established for lettings of furnished apartments or homes.
Royal Decree-Law 29/2026, preamble
According to the Agencia Tributaria (Spanish Tax Agency), from 1 December 2026 lettings of furnished apartments or homes cease to be exempt when two conditions are met at the same time: the stay does not exceed thirty nights, counted per guest, and the accommodation is not the owner's own main home. These lettings move to the reduced rate of 10%.
When the conditions relating to a stay of no more than thirty nights are met jointly.
Agencia Tributaria, 2026 VAT legislative changes
Which lettings the 10% VAT applies to, and which it does not
This is how each type of letting stands from 1 December, if the decree is ratified:
| Type of letting | VAT until 30/11/2026 | VAT from 1/12/2026 (if ratified) |
|---|---|---|
| Holiday or short-stay flat, 30 nights or fewer, no hotel-type services | Exempt | 10% |
| Letting with hotel-type services (regular cleaning, change of linen, reception), any length | 10% | 10% (no change) |
| Rooms or short stays in the owner's own main home | Exempt | Exempt |
| Seasonal letting (alquiler de temporada) of more than 30 nights, no hotel-type services | Exempt | Exempt |
| Long-term letting of the tenant's main home | Exempt | Exempt |
Sources: Royal Decree-Law 29/2026 (BOE), Agencia Tributaria, Escura and Notaría Jaime Calvo (October 2026). In the Canary Islands, Ceuta and Melilla VAT does not apply; they have their own indirect taxes.
Two points to note. The main-home exception only covers the home the owner actually lives in, for example if they let out a room; according to Escura, it does not extend to second homes or to other properties of the same owner. And nothing changes for long-term lettings: the tenant's main home remains exempt, as do lettings of more than 30 nights without hotel-type services.
Hotel-type services: what was already taxed at 10%
Owners who already provided services typical of the hotel industry, such as regular cleaning during the stay, a change of bed linen or reception, were already outside the exemption and paid 10%, like hotels. The decree's preamble makes clear that these lettings continue to be taxed as before.
According to Escura, cleaning only at the guest's arrival and departure is not, on its own, enough to count as a hotel-type service. What is new is that these services will no longer be needed for VAT to apply: it will be enough for the stay to be 30 nights or fewer and for the property not to be the owner's main home.
What owners have to do from 1 December
Owners who let their holiday flat without VAT will become, for the purposes of this tax, a business that charges VAT to guests and pays it over to the Tax Agency, whether they are individuals or companies and whether or not they live in Spain. These are the steps set out in the published analyses:
- Notify the Tax Agency that you are starting VAT-able activity before you begin, using the census declaration (modelo 036), the form used to register as a business or update your details.
- Issue an invoice for every stay, with VAT shown separately, and keep the VAT record books.
- File the modelo 303 VAT return, generally every quarter, and the annual summary (modelo 390). The first would be the return for the fourth quarter of 2026, due in January 2027.
- If your prices already include VAT, divide the total by 1.10 to get the taxable amount: of €1,000, €909.09 is the base and €90.91 VAT. Simply taking 10% off the total gives the wrong figure.
- Deduct the VAT on your letting-related costs (cleaning, maintenance, utilities, furniture, platform commissions), provided you hold an invoice and meet the general requirements. While the letting was exempt, that VAT could not be recovered.
- Check with the platforms you use how they display the price and how they invoice their commissions.
Bookings already made for stays after 1 December
This is the most frequent question: what happens to a booking made in October for a stay in December? The decree contains no transitional regime, a special rule for moving from one system to the other, and neither the Tax Agency nor the analyses we consulted give a definitive answer.
According to Escura, it will depend on the general rules on devengo (the moment at which the tax becomes chargeable) and on advance payments, such as deposits or prepayments, so whatever has already been collected needs to be reviewed case by case. It is wise to list all bookings with check-in from 1 December, how much was collected and when, and to consult an adviser before invoicing them.
Example: a holiday flat in Madrid before and after 1 December
Take a holiday flat in the city of Madrid that is not the owner's main home, with no hotel-type services, let at €120 a night for four-night stays. These are assumed figures to show the calculation, not an average price. The owner can either raise the price to pass the VAT on to the guest or keep it and absorb the tax.
| Item | Until 30/11/2026 | From 1/12: price raised | From 1/12: price kept |
|---|---|---|---|
| Price per night paid by the guest | €120.00 | €132.00 | €120.00 |
| Part of the nightly price that is VAT (10%) | €0.00 (exempt) | €12.00 | €10.91 |
| What the owner keeps per night, excluding VAT | €120.00 | €120.00 | €109.09 |
| 4-night stay: guest pays | €480.00 | €528.00 | €480.00 |
| 4-night stay: VAT paid over to the Tax Agency | €0.00 | €48.00 | €43.64 |
| 4-night stay: owner's income excluding VAT | €480.00 | €480.00 | €436.36 |
Illustrative example; VAT-inclusive calculation follows the method explained by Escura (15/10/2026). VAT paid over is shown before deducting VAT on costs.
For the guest, the change can mean paying up to 10% more if the owner passes the tax on: €48 more for four nights. For an owner who keeps the price, income excluding VAT falls by 9.1%, although they can deduct the VAT on their costs. This is how a month with 20 nights booked would look, with the price raised:
| Monthly item | Amount |
|---|---|
| Income excluding VAT (20 nights × €120) | €2,400.00 |
| VAT charged to guests (10%) | €240.00 |
| VAT on cleaning between stays (€400 + 21%) | −€84.00 |
| VAT on repairs and maintenance (€100 + 21%) | −€21.00 |
| VAT payable on the modelo 303 return | €135.00 |
Illustrative example, with costs invoiced by Spanish businesses at the standard 21% rate. Platform commissions may also be deductible, depending on how they are invoiced.
The real impact depends on whether you raise the price, how much you spend on costs that carry VAT and how many nights you fill. There are also new obligations (invoices, record books, quarterly returns) that many small owners will prefer to leave to a gestor (an administrative and tax agent).
Tourist homes in Madrid in figures
According to the INE's experimental statistics, which count tourist homes advertised on the major platforms, there were 341,001 in Spain in May 2026, 10.7% fewer than a year earlier, with 1,714,702 bed places: 1.28% of all registered dwellings. In the municipality of Madrid there were 10,836.
They are the kind of accommodation targeted by the change, provided they are let for 30 nights or fewer and the decree is ratified. The same text also allows town halls to apply a surcharge on the IBI (Spanish property tax) for tourist accommodation in stressed housing areas, if they approve it in their bylaws.
12 November: what happens if the decree is ratified and what happens if not
A royal decree-law is a rule with the force of law that the Consejo de Ministros (Council of Ministers) approves on grounds of urgency and that comes into force before going through Congress. Decree-Law 29/2026 has been in force since 8 October, but it must be ratified. With Parliament dissolved, that vote falls to the Standing Committee of Congress, which has 69 members, and is expected on 12 November.
| Scenario | What happens to the decree | What happens to VAT on holiday lets |
|---|---|---|
| Ratified | Remains in force | 10% VAT from 1 December on stays of 30 nights or fewer in homes that are not the owner's main home |
| Not ratified | Lapses and ceases to apply | Never comes into force: holiday flats without hotel-type services remain exempt |
Sources: La Región (16/10/2026), Moncloa.com (17/10/2026), Escura, Economist & Jurist and Notaría Jaime Calvo (15/10/2026). If the decree lapses, the effects already produced by its other measures, in force since 8 October, are preserved.
If it is ratified, there will be less than three weeks until 1 December to complete the formalities. That is why Escura recommends preparing now, but waiting for ratification before changing prices or filing anything with the Tax Agency.
What to do before 12 November
- List all bookings with check-in from 1 December: dates, nights, amounts and what has already been collected.
- Decide whether, if it comes to it, you would raise the price or absorb the VAT, and check how each platform displays it.
- Gather the invoices for your costs to see how much VAT you could deduct.
- Talk to your gestor so that the modelo 036 and the modelo 303 calendar are ready.
- On 12 November, check whether the Standing Committee ratifies Royal Decree-Law 29/2026.
- If you let rooms in your own main home, or let for more than 30 nights without hotel-type services, the change does not affect you: keep the documents that prove it.
How we do it at Llavely
Llavely does not work with holiday or short-stay lettings: we focus on long-term lettings of people's main homes, which remain VAT-exempt, with verified tenants. Llavely is renting the other way round: tenants create their verified profile once, with their identity and income checked (if anything doesn’t add up, a member of our team reviews it), and it is landlords and agencies who invite them to view their property.
If you own a holiday flat in the provinces of Madrid or Barcelona and are thinking of switching to long-term letting, you can already list your property for free, also by pasting the text of the listing you already have, and choose among tenants whose profiles have been checked. A member of our team checks every property in under 24 hours before it goes live. It is free for tenants, landlords and agencies, with every feature; for tenants, it is always free. And if you would rather sell a home in the Comunidad de Madrid (Madrid region), you can do it with us for 2.5% + VAT, all included, which you only pay if you sell, on the day of the signing at the notary: start by asking for your free valuation (we reply in English by email, message or phone).
Llavely's rental service is already open in the provinces of Madrid and Barcelona: if you are looking for a home, create your profile for free. In the rest of Spain there is a waiting list: if you are looking for a home or want to let yours long term, sign up with your areas and we will email you when we open there.
Frequently asked questions
From when do holiday lets in Spain have to charge VAT?
From 1 December 2026, under Royal Decree-Law 29/2026, provided the Standing Committee of Congress ratifies it. It applies to lettings of furnished homes for 30 nights or fewer per guest when the property is not the owner's main home. The rate is the reduced rate of 10%.
What happens if the decree is not ratified on 12 November?
If it is not ratified, the decree lapses and ceases to apply. As the VAT change only takes effect from 1 December, it would never come into force and holiday flats without hotel-type services would remain exempt, as now. The vote is expected on 12 November, although the date is not final.
Will long-term rentals of a main home be subject to VAT?
No. Long-term letting of a tenant's main home remains exempt from VAT. The change only affects lettings of furnished homes for 30 nights or fewer that are not the owner's main home.
What about seasonal lettings of more than 30 days?
If the stay lasts more than 30 nights for the same guest and the owner does not provide hotel-type services, such as regular cleaning or a change of linen, it remains VAT-exempt. If those services are provided, it is taxed at 10% as before, whatever the length.
Do I have to register with the Spanish Tax Agency if I let a holiday flat?
If the decree is ratified and your lettings become subject to VAT, you will need to notify the Tax Agency with the census declaration (modelo 036) before you start charging VAT. After that, you must issue an invoice for every stay and file the modelo 303, generally every quarter, plus the annual summary (modelo 390). The first return would be for the fourth quarter of 2026, filed in January 2027.
What about bookings made before 1 December for later stays?
The decree contains no transitional rule for VAT. According to published analyses, it will depend on the general rules on when the tax becomes chargeable (devengo) and on advance payments, so it is wise to review what has already been collected case by case and consult an adviser before invoicing.
Can I deduct the VAT on my costs?
Yes. Once you charge VAT, you can deduct the VAT you pay on letting-related costs such as cleaning, maintenance, utilities, furniture or platform commissions, provided you hold an invoice and meet the general requirements. Some analyses add that VAT on capital goods may also be adjusted where applicable. Until now, with the letting exempt, that VAT could not be recovered.
If I let a room in my own home to tourists, do I have to charge VAT?
No, if it is your main home. The decree keeps the exemption when the accommodation is provided in the owner's main home. The exception does not extend to second homes or to other properties of the same owner.
Sources
- Royal Decree-Law 29/2026 of 6 October, adopting urgent measures to protect the social function of housing and expand the supply of affordable housing, consolidated text (BOE, 7 October 2026)
- 2026 VAT legislative changes: Royal Decree-Law 29/2026 (Agencia Tributaria, updated 16 October 2026)
- Main tax changes introduced by Royal Decree-Law 29/2026 of 6 October (Agencia Tributaria, October 2026)
- Fiscal and tax measures introduced by Royal Decree-Law 29/2026 (Agencia Tributaria, 7 October 2026)
- Holiday and short-stay lettings will be taxed at 10% VAT (Escura Abogados y Economistas, 15 October 2026)
- Tax measures in Royal Decree-Law 29/2026 on housing (Economist & Jurist, RocaJunyent-Gaona, 15 October 2026)
- Royal Decree-Law 29/2026: tax changes on housing, rentals and municipal capital gains tax (Notaría Jaime Calvo, 15 October 2026)
- New tax measures on housing in Royal Decree-Law 29/2026 (Iberley, 7 October 2026)
- Non-residents face VAT on holiday lets and the new Modelo 210 (Capital, 20 October 2026)
- Congress will vote on the housing decrees on 12 November, the day after the general strike (La Región, 16 October 2026)
- Congress will vote on the housing decrees on 12 November: key points of the session (Moncloa.com, 17 October 2026)
- The municipalities with the most tourist homes in Spain, INE data for May 2026 (idealista/news, 24 June 2026)
- The second-largest fall in tourist homes in Spain: 10.7% fewer in May, INE data (Hosteltur, 24 June 2026)
- Tourist homes fall by 10.7%, one of the biggest declines on record, INE data (Forbes España, June 2026)