Holiday lets in Spain: what the 10% VAT means from 1 December 2026

Published in the BOE on 30 September 2026, decree-law 26/2026 subjects short-term tourist rentals to 10% VAT from 1 December. For a foreign owner letting an apartment in Marbella or Estepona, this is not one more line on a tax return: it is a change of regime, with new obligations and, in return, a right to deduct that did not exist before. The explanation, the arithmetic and what to do next.

Until now, letting a furnished home without hotel services was exempt from VAT in Spain. The owner collected the rent, declared the income, and that was the end of it. Decree-law 26/2026, published in the Boletín Oficial del Estado on 30 September 2026 and in force since 1 October, ends that exemption for short stays. From 1 December 2026, tourist lets of under thirty days fall under the reduced VAT rate of 10%.

This is the first time the activity is treated for tax purposes as an economic activity in its own right rather than as the provision of housing. The text still has to be ratified by the Congress of Deputies, which votes on 2 October 2026: without approval within thirty days of publication, a decree-law lapses. The 1 December deadline therefore depends on that vote.

Who is affected, and who is not

The new rate targets short-term tourist accommodation. Three situations fall outside it, and knowing which one applies matters before changing anything about how you invoice.

• Stays of more than one month: beyond thirty days, the letting remains outside the scope of the new rate
• Homes that are the owner's main residence and are let occasionally
• Homes let with hotel-type ancillary services, which were already subject to VAT and remain so

That third exception deserves a word, because it is often misunderstood. A property offered with daily cleaning, linen changes during the stay, a reception desk or catering already counted as a hotel service and was already taxed. The decree changes nothing for it. What changes is the treatment of a home let bare, without those services: that is the one that moves.

The arithmetic: what 10% really amounts to

Take a common Costa del Sol case. A two-bedroom apartment let twenty weeks a year at €1,400 a week produces €28,000 of gross income. Two scenarios follow.

In the first, the owner passes the tax on to the guest. The advertised price rises from €1,400 to €1,540 a week, the owner's income is unchanged, and it is the competitiveness of the listing that absorbs the shock, in a market where guests compare nightly rates.

In the second, the owner keeps the public price at €1,400. VAT is then included in that price: the owner keeps €1,272.73 and remits €127.27 to the Treasury. Over the year, net income falls from €28,000 to €25,454, a loss of €2,546, slightly over 9% of turnover. In practice most owners will mix the two by season, passing the tax on in high season and absorbing it in low season.

The other side no one mentions: deduction

Coming within the scope of VAT is not all cost, and this is the point most of the recent commentary leaves out. A VAT-registered person charges the tax on income but deducts the tax borne on business expenses: cleaning, laundry, maintenance, management fees, platform commissions, works, furniture and equipment.

On a property whose operating costs commonly run at 25% to 35% of income, that deduction offsets a real share of the burden. An owner incurring €8,000 of expenses bearing VAT at 21% recovers about €1,388 of deductible tax, against the €2,546 of the absorption scenario. The net effect is therefore appreciably smaller than the headline 10%, and it turns clearly favourable in a year of refurbishment or refurnishing.

The cost is administrative: VAT registration, compliant invoicing, periodic returns and record-keeping. For a non-resident this generally means a tax representative or a local firm, whose fees belong in the calculation.

IBI, the second bill

The same decree allows municipalities to apply property-tax (IBI) surcharges. Two mechanisms sit side by side: a surcharge of up to 150% of the assessment on homes left permanently empty, and a surcharge on tourist accommodation located in a declared “stressed market zone”. The maximum coefficients of the municipal capital-gains tax also rise from 1 December.

A point that matters to any Costa del Sol owner: these surcharges do not apply automatically. They require the municipality to adopt them by tax ordinance and the zone to have been declared stressed. In other words the bill will be decided in Marbella, Estepona or Benalmádena, not only in Madrid. The municipal council calendar this autumn is what to watch.

Costa del Sol: a stock that was already shrinking

The text lands on a market that had already begun to turn. According to the INE, Málaga province counted 45,176 tourist dwellings in May 2026 against 48,412 a year earlier: 3,236 fewer, a fall of 6.6% and roughly 26,000 fewer beds. Tourist dwellings fell from 4.86% to 4.53% of the provincial housing stock.

The decline is sharpest on the coast, where regulation and condominium rules have tightened, while inland municipalities grow markedly. The shift is plain: what the coast loses, the interior gains.

Two cautions in reading this. First, these INE figures differ from the Junta de Andalucía register, which listed 88,520 homes: the two sources do not measure the same thing, the register counting declarations and the INE counting listings actually active. Second, fewer homes on offer is not weaker demand: with visitor numbers holding up, a scarcer supply supports rental prices for the properties that remain on the market.

What a foreign owner should do now

• Check the actual length of stays: beyond thirty days the regime does not change
• Establish whether the property is let with or without hotel services, as that single criterion decides everything
• Cost both scenarios, passing on and absorbing, season by season, before changing platform rates
• List the expenses bearing VAT to estimate the right to deduct, particularly if works are planned
• Engage a Spanish tax adviser for registration and, for a non-resident, for fiscal representation
• Follow your municipality's tax ordinance and any stressed-zone declaration, which govern the IBI surcharge
• Wait for the Congress vote to be confirmed before committing irreversible costs

The VINSIX Real Estate Advisory view

This reform does not undo the case for the Costa del Sol, but it moves its centre of gravity. For a decade, the return on a coastal property was built largely on short-term letting that was lightly taxed and lightly regulated. That regime is closing: condominium consent required since April 2025, registers, and now VAT. A property's yield now has to be computed after tax rather than on gross income.

The corollary bears directly on our work. As rental yield tightens, the financing structure weighs more heavily on the final result: with 12-month Euribor at 3.332% on 23 September and the ECB deposit rate at 2.50%, the gap between a properly negotiated financing and one simply accepted often exceeds, over the holding period, the effect of the VAT. That is precisely where Groupe VINSIX S.A. works: putting lenders in competition, structuring the debt and weighing direct ownership against ownership through a company.

For anyone buying today the conclusion is a sober one. A well-located, compliant property whose operating model does not rest on a single tax niche remains a good asset. A property whose economics depended entirely on the VAT exemption deserved a second look in any case.

Key points

• Decree-law 26/2026, published in the BOE on 30 September 2026, in force since 1 October; ratification vote in Congress on 2 October
• 10% VAT on tourist lets of under 30 days from 1 December 2026
• Three exceptions: stays over one month, the owner's main residence, homes with hotel services (already taxed)
• Gross effect of about 9% of income if the tax is absorbed, appreciably reduced by the right to deduct VAT on expenses
• IBI surcharge of up to 150% possible on empty homes and in stressed zones, at each municipality's discretion
• Málaga province: 45,176 tourist dwellings in May 2026, 6.6% fewer than a year earlier; Marbella down 11.9%

This article is a general analysis and is neither personalised tax advice nor a promise of return. Every situation should be reviewed with a qualified adviser.

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