No, VAT on Holiday Lets Did Not Go Up to 21% — What Actually Happened on 27 July 2026

Status as of publication: still 10%. The 21% proposal has not been approved.

The housing package that would have raised IVA on tourist lets from 10% to 21% was pulled from the Council of Ministers agenda on 27 July 2026, the day before it was due to be approved, for lack of parliamentary support. An earlier attempt was rejected by Congress in April. It has now been pushed to a Council of Ministers meeting in September 2026, without a confirmed date, and as of the time of writing that meeting hasn't happened and the proposal remains unapproved. The date that actually matters longer-term is 1 July 2028, under EU rules — though even that date comes with a caveat worth knowing.

If you saw the headlines in June and July and quietly wrote off your rental figures, you can put them back — for now.

This has now failed twice in four months, and the thing people should actually be planning around is two years away and comes from Brussels rather than Madrid.

What Happened, In Order

The Spanish government's housing package included a proposal to raise IVA on tourist rentals from the current 10% to 21%, alongside other measures on residential tenancies and seasonal lets.

An earlier version, Royal Decree-Law 8/2026 of 20 March, was rejected by Congress on 28 April 2026.

The revised package was scheduled for Council of Ministers approval on 28 July 2026 and was pulled from the agenda the day before, on 27 July, for lack of parliamentary support — reportedly from Junts, Podemos and the PNV. It was postponed to September 2026, once the parliamentary term resumes, though no firm date had been set as of when this was written.

So the position today is that the rate has not changed. It remains 10%.

Will It Come Back?

Possibly. It's been postponed rather than abandoned, and Spanish housing policy is an active area with a government that keeps returning to it.

But it has now failed to secure support twice, which tells you something about the parliamentary arithmetic. I wouldn't budget on the basis that it passes in the next twelve months, and I wouldn't budget on the basis that it never does either.

Put a date in the diary to check rather than assuming either way.

The Date That Actually Matters

Council Directive (EU) 2025/516, adopted by the EU Council on 11 March 2025 and published in the Official Journal on 25 March 2025, is part of the EU's "VAT in the Digital Age" (ViDA) reform. It introduces a "deemed supplier" rule that makes booking platforms responsible for collecting and remitting VAT on short-term accommodation rentals (up to 30 consecutive nights to the same guest) where the host hasn't provided a valid VAT registration — effectively closing the gap that currently lets many private lets escape VAT altogether.

That mechanism becomes available to Member States from 1 July 2028, and becomes mandatory across the EU from 1 January 2030 — Spain, like other states, can choose to apply it early from 2028 or wait until it's compulsory in 2030. Most commentary treats 1 July 2028 as the date that matters, since it's the earliest point at which platform-collected VAT on short lets could start applying in practice, and that's a reasonable planning assumption — but the true backstop, if Spain doesn't move early, is 1 January 2030.

That EU timeline is worth planning around regardless of what Madrid does domestically: it's further out, it doesn't depend on the current parliamentary arithmetic, and it comes from a direction most owners aren't watching.

If you're modelling rental returns over a ten-year hold, 2028–2030 is the window to build in — not a Spanish domestic proposal that has already failed twice.

What This Means For Your Numbers

At the current 10%, IVA is a real but manageable line in a holiday-let calculation. At 21% it would materially change the arithmetic on a marginal letting proposition.

Which is a good argument for not buying on a marginal letting proposition in the first place. If your purchase only works at today's tax rates and today's occupancy, it doesn't really work.

The honest gross yield on a Murcia resort property is 5–6%, and the net lands nearer 2.5–4%. A tax change of this size is exactly the sort of thing that turns a thin margin into no margin.

The Honest Things To Check

• Check the date on anything you read about this. Coverage from June and July 2026 was written before the package was pulled.
• Don't confuse this with the tourist-rental registry. That was a separate matter, decided by the Supreme Court in May 2026, and it went the other way.
• Model your returns at both rates if letting income is central to your purchase.
• Diarise a check in September and again in the new year.
• Take Spanish tax advice on your own position rather than relying on any general article, including this one.

FAQ

Did Spain raise VAT on holiday lets to 21%?

No. The proposal was pulled from the Council of Ministers agenda on 27 July 2026, the day before it was due to be approved, for lack of parliamentary support. An earlier version was rejected by Congress on 28 April 2026. The rate remains 10%.

Is VAT on Spanish tourist rentals going up?

Not currently, and the domestic proposal has failed twice in 2026. Separately, Council Directive (EU) 2025/516 will let platforms be made responsible for collecting VAT on short-term rentals from 1 July 2028, becoming mandatory across the EU by 1 January 2030, once transposed into Spanish law.

What is the VAT rate on holiday rentals in Spain in 2026?

10%, where VAT applies at all (a simple rental with no hotel-type services is generally VAT-exempt). The domestic proposal to move short-term lets to the general 21% rate has not been enacted.

When will VAT apply to short-term rentals under EU rules?

Platforms can be required to collect VAT on short-term accommodation bookings from 1 July 2028 under Council Directive (EU) 2025/516, with that becoming mandatory EU-wide by 1 January 2030, subject to transposition into Spanish law.

Is this the same as the tourist rental registry that was cancelled?

No. Those are separate matters. The national single rental registry was annulled by Spain's Supreme Court on 19 May 2026, while the VAT increase was a government proposal that was pulled in July.

If rental income is part of your case for buying, it's worth running the numbers at both rates before you commit. Happy to go through it with you — Get in touch.