Spain considers new 21% VAT on short-tourism rentals, double the hotel rate
[MADRID] The Spanish government is seeking parliamentary approval for a new 21 per cent value added tax (VAT) on short-term tourism rentals – double the tax paid for hotel rooms – as it seeks to address a housing crisis.
The maximum tax rate would apply to all rentals under 30 days and affect around a third of the 94 million annual visitors to Spain last year who opted to rent a home over a hotel room. At present, there is no VAT on short-term rentals in mainland Spain, while hotel visitors pay a 10 per cent tax on rooms.
The measure is contained in a wider bill that the minority, Socialist-led government may struggle to get through a deeply polarised parliament.
'Homes are for living in (...) the measures seek to guarantee the right to rental housing for families,' Housing Minister Isabel Rodriguez said on Friday (May 23) about the bill's unveiling.
Spain is trying to balance maintaining tourism as its economic engine while addressing popular concern over high housing costs as landlords opt for more lucrative tourist rentals.
A Bank of Spain report last week said that the country has a deficit of 450,000 homes. Half the housing stock in the Canary and Balearic islands is either tourist accommodation or homes owned by non-residents, it said.
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Apartur, an association of tourism apartment owners in Spain's second city Barcelona, argues that shorter-term rentals should pay the same VAT as hotels and calls the proposed 21 per cent VAT rate discriminatory.
The bill under consideration also includes a controversial measure first announced in January to tax non-European Union citizens up to 100 per cent on property purchases unless it will be their primary home, as well as increasing taxes payable by owners of empty properties, including second homes.
'The sole objective is to put an end to these activities and leave (tourism) in the hands of hoteliers,' said Javier Penate, legal adviser to a holiday homeowners association in the Canary Islands, where short-term rentals already pay 7 per cent VAT, as do hotels.
Local and regional authorities are also capping new licences for tourist rentals in Malaga and Madrid, while banning them entirely in Barcelona by 2028. REUTERS
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