Spain’s government has proposed a 21% value-added tax (VAT) on short-term tourist rentals, doubling the current 10% VAT rate applied to hotel stays. The move is aimed at addressing the country’s escalating housing crisis, which has been exacerbated by the surge in short-term rental demand.
The new tax, which would apply to rentals under 30 days, seeks to discourage property owners from prioritizing lucrative short-term lets over long-term housing. With nearly one-third of Spain’s 94 million annual visitors opting for short-term rentals, this sector has grown substantially, often at the expense of affordable housing for residents.
“Homes are for living in,” said Housing Minister Isabel Rodriguez. “These measures aim to ensure families have access to rental housing.”
The housing shortage is particularly acute in the Canary and Balearic Islands, where nearly half of all properties are tourist accommodations or owned by non-residents. A Bank of Spain report estimates the country faces a housing deficit of 450,000 homes.
Tourism apartment associations have criticized the proposed tax as discriminatory, arguing that hotels and short-term rentals should face equal VAT rates. Meanwhile, local governments are imposing stricter regulations, including caps on new tourist rental licenses and bans in cities like Barcelona by 2028.
