Spain to Make VAT Mandatory on All Tourist Rentals by 2028: What Property Owners Need to Know

Spain has announced a major shift in tax policy that will impact thousands of property owners operating short-term tourist rentals. Starting in 2028, Value Added Tax (VAT or IVA) will become mandatory on all tourist rental activities, even if the owner does not offer hotel-like services. This marks a significant departure from the current regime, where many private hosts are exempt from VAT.

The reform is part of the Spanish government’s broader effort to regulate the housing market, level the playing field with hotels, and increase tax compliance in the booming short-term rental sector.

What’s Changing in 2028?

Under current rules, tourist rentals in Spain are only subject to VAT if they include hotel-style services (e.g. reception, cleaning, laundry, catering). This exemption has allowed many private owners to operate VAT-free.

The 2028 reform will:

• Make 21% VAT mandatory on all short-term tourist rentals, regardless of services offered
• Apply to stays of less than 30 days
• Affect both resident and non-resident landlords

Why Is Spain Making This Change?

The government aims to:

• Align Spain with EU VAT directives
• Generate additional tax revenue from a high-demand sector
• Create fair competition between private landlords and traditional accommodation providers
• Discourage excessive touristification of residential neighborhoods

According to the Finance Ministry, the reform could bring in hundreds of millions of euros in annual revenue.

Who Will Be Affected?

• Private individuals offering short-term rentals via platforms like Airbnb or Booking
• Non-resident owners who use their property as a vacation rental
• Professional landlords and real estate investors with tourist-focused portfolios

Financial Impact of the VAT Reform

The new VAT obligation will:

• Add 21% VAT to the rental price, potentially making listings less competitive
• Require landlords to register for VAT and file quarterly returns
• Increase accounting and administrative burden, especially for casual landlords

Failure to comply could result in fines, audits, and backdated VAT payments.

Example Scenario

Sarah, a British non-resident, rents her holiday apartment in Málaga to tourists for €120 per night.

• Under the new law, she will need to charge €145.20 (including 21% VAT)
• She must file VAT returns in Spain even if she has no other Spanish income

This may force many owners to reconsider whether tourist rentals are still financially viable.

Alternatives and Planning Ahead

Owners might consider:

• Switching to long-term rentals, which remain VAT-exempt
• Renting for more than 30 days per stay to avoid the tourist classification
• Professionalizing operations to justify prices with added services

Planning ahead will be essential to maintain profitability and legal compliance.

How Taxadora Can Help

At Taxadora, we help non-residents and property investors navigate Spanish tax law:

• VAT registration and quarterly filing
• Tourist license compliance
• Comparison of short-term vs. long-term rental tax efficiency
• End-to-end tax and legal support for holiday home owners

 Final Thoughts

Spain’s plan to make VAT mandatory on all tourist rentals by 2028 is a major development for property owners. While it may add costs and complexity, early planning and professional guidance can help you adapt without losing income.

Stay updated on rental tax changes and get personalized support at Taxadora—your expert guide for Spanish tax matters.