MADRID — The Spanish government is seeking parliamentary approval for a new 21 percent value added tax on short-term tourism rentals – double the tax paid for hotel rooms – as it seeks to address a housing crisis.
The maximum tax rate would apply to all rentals under 30 days and affect around a third of the 94 million annual visitors to Spain last year who opted to rent a home over a hotel room.
At present there is no VAT on short-term rentals in mainland Spain, while hotel visitors pay a 10 percent tax on rooms.
The measure is contained in a wider bill that the minority, Socialist-led government may struggle to get through a deeply polarised parliament.
“Homes are for living in (…) the measures seek to guarantee the right to rental housing for families,” Housing Minister Isabel Rodriguez said about the bill’s unveiling.
High housing costs
Spain is trying to balance maintaining tourism as its economic engine while addressing popular concern over high housing costs as landlords opt for more lucrative tourist rentals.
A Bank of Spain report this week said the country has a deficit of 450,000 homes. Half the housing stock in the Canary and Balearic islands is either tourist accommodation or homes owned by non-residents, it said.
Apartur, an association of tourism apartment owners in Spain’s second city Barcelona, argues that shorter-term rentals should pay the same VAT as hotels and calls the proposed 21 percent VAT rate discriminatory.
The bill under consideration also includes a controversial measure first announced in January to tax non-European Union citizens up to 100 percent on property purchases unless it will be their primary home, as well as increasing taxes payable by owners of empty properties, including second homes.
“The sole objective is to put an end to these activities and leave (tourism) in the hands of hoteliers,” said Javier Peñate, legal advisor to a holiday homeowners association in the Canary Islands, where short-term rentals already pay 7 percent VAT, as do hotels.
Local and regional authorities are also capping new licences for tourist rentals in Malaga and Madrid, while banning them entirely in Barcelona by 2028.
Airbnb listings
Earlier, Spain ordered Airbnb to withdraw more than 65,000 listings for holiday rentals which it said violated existing rules from its platform as part of a general crackdown on a business blamed for contributing to the housing crisis in the country.
Most of the Airbnb listings to be blocked do not include their licence number, while others do not specify whether the owner was an individual or a corporation, the Consumer Rights Ministry said in a statement.
Consumer Rights Minister Pablo Bustinduy said his goal was to end the general “lack of control” and “illegality” in the holiday rental business.
“No more excuses. Enough with protecting those who make a business out of the right to housing in our country,” he told reporters.
Bustinduy said Madrid’s high court is backing the request to withdraw as many as 5,800 listings.
Airbnb will appeal the decision, a spokesperson said on Monday. The company believes the ministry does not have the authority to make rulings over short-term rentals and failed to provide an evidence-based list of non-compliant accommodation. Some of the incriminated listings are non-touristic seasonal ones, the spokesperson said.
Excess tourism
The Spanish government, as well as city councils and regional authorities, have launched a general crackdown on tourism rentals via sites such as Airbnb and Booking.com, which many Spaniards say are creating excess tourism, reducing the housing supply and making renting unaffordable for many locals.
Housing has become a major issue in Spain as construction has failed to keep pace with demand since a real estate bubble burst more than 15 years ago.
According to official data, there were about 321,000 homes with holiday rental licences in Spain as of November last year, 15 percent more than in 2020. Many more operate without official licences.
The Consumer Rights Ministry opened a probe into Airbnb in December and in January, Prime Minister Pedro Sanchez unveiled a plan to raise taxes on income from holiday rentals through platforms.
Barcelona Mayor Jaume Collboni took Spain’s toughest move so far in June last year when he ordered a total ban on tourism rentals by 2028.
Other European countries such as Croatia and Italy have also acted to slow down the holiday rental business.
More tourists seen
Spain expects even more tourists to flock to the country in 2025 after an estimated record 94 million foreigners visited last year, 10 percent more than in 2023, Tourism Minister Jordi Hereu said on Wednesday, helping to drive economic growth amid a wider European slowdown,
Foreign tourists spent some 126 billion euros ($130 billion) during their stays in 2024, up 16 percent from the previous year, the minister said. He predicted they would spend 36 billion euros in the first four months of 2025, also 16 percent higher than in the same period of 2024, while visitor numbers should rise by 9 percent.
