Spain set to raise VAT on holiday homes to 21% under new housing plan

Tourist rental tax could jump considerably as Spain struggles to tackle the housing crisis 

The Spanish government is set to bring a new package of housing measures before the Council of Ministers in July, with one change likely to catch the attention of holiday home owners: a rise in VAT on tourist accommodation to 21%.

According to government spokesperson Elma Saiz, the plan is designed to tackle Spain's housing access problem from two angles. One strand focuses on keeping rental prices under control, with measures such as regulating temporary contracts, extending leases, requiring written agreements and offering income tax breaks to landlords who lower their rents.

The other strand aims to boost the supply of affordable housing, and it's here that the VAT increase on tourist lets comes in.

For anyone renting out a property to holidaymakers in Spain, this means the cost of doing business could be about to rise considerably, as the higher VAT rate would apply directly to tourist accommodation rather than long-term rentals.

The decree hasn't been finalised yet, and the government is still in talks with parliamentary groups to secure enough support for it to pass. Minister for Culture Ernest Urtasun explained that there's still room for negotiation in the coming weeks, though no exact date in July has been confirmed for when the decree might be approved.

For now, anyone with a holiday let in Spain would be wise to keep an eye on developments over the summer, as the final shape of the rules, and exactly when they'd come into force, is still being worked out.

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