Spain Targets Tourist Housing: 21% VAT and 100% Purchase Tax for Non-EU Buyers

The Spanish government is taking bold steps in 2025 to curb speculative investment and housing stress in tourist-heavy cities. A newly proposed reform combines two aggressive measures: a 21% VAT on short-term tourist rentals and a 100% property purchase tax for non-EU, non-resident buyers. These changes could drastically reshape the Spanish real estate and vacation rental market.

In this post, we explore both proposals and their potential impact on owners, investors, and the broader housing economy.

1. VAT on Short-Term Tourist Rentals: 21% Tax to Level the Playing Field

Currently, short-term rentals are generally exempt from VAT in Spain unless specific hotel-style services are provided. The new measure aims to:

• Apply 21% VAT on all short-term tourist rentals
• Cover stays of less than 30 days
• Apply regardless of whether services like cleaning or linen changes are offered

Who is affected?

• Private owners using platforms like Airbnb, Booking.com
• Real estate investors offering vacation rentals
• Properties in urban and coastal municipalities, especially in “tensioned areas”

This measure is part of the government’s strategy to regulate tourist housing and reduce its pressure on residential supply.

2. 100% Property Purchase Tax for Non-EU Buyers

The second, even more controversial, measure is the proposed 100% purchase tax on non-EU buyers who are not resident in Spain. This means:

• Buying a €300,000 property would come with an additional €300,000 in tax
• The rule targets investment purchases, not primary residences
• Aims to reduce speculation and free up local housing stock

Key concerns:

• Drastic drop in international investment, especially from the UK and US
• Potential legal challenges based on EU trade principles
• Impact on coastal and tourist regions heavily reliant on foreign buyers

Why These Measures Now?

These proposals follow intense political pressure to make housing more affordable. Key motivations include:

• Soaring rents in cities like Barcelona, Valencia, Málaga
• A surge in tourist apartment listings competing with residential housing
• Growing local protests against mass tourism and housing gentrification

By taxing short-term rentals and foreign speculative purchases, the government hopes to:

• Increase long-term rental supply
• Cool off inflated property prices
• Generate revenue to invest in public housing

 What This Means for Property Owners and Investors

If you rent short-term:

• You’ll need to register for VAT
• Charge and remit 21% VAT quarterly
• Consider switching to long-term rental contracts (which remain VAT-exempt)

If you plan to buy property as a non-EU national:

• Wait for the final law details and exemptions
• Explore possible residency pathways to avoid the 100% surcharge
• Consider investing through EU-based entities

How Taxadora Can Help

At Taxadora, we support non-residents and investors by:

• Assessing the tax impact of new property rules
• Helping owners transition from tourist to long-term rentals
• Managing VAT registration and returns
• Filing rental income and property ownership taxes (Modelo 210)

Final Thoughts

Spain’s proposed 2025 reforms are some of the most aggressive yet in regulating tourist housing and foreign real estate investment. If passed, they will fundamentally change the cost and structure of owning and renting property in Spain.

To stay ahead of the changes, visit our blog or contact the Taxadora team for strategic tax planning and compliance support tailored to non-residents and international property owners.