If you own a property in Spain or are considering purchasing one as a short-term rental investment, a significant tax change is on the horizon—and now is the time to prepare.
As of 1 July 2028, Spain will apply VAT (IVA) to all short-term tourist rentals (30 nights or fewer), regardless of whether any additional services are offered. This marks a sharp departure from current tax rules, and it will have important implications for holiday homeowners, landlords, and real estate investors alike.
This blog post explains:
When and how VAT applies to rental income,
What changes in 2028,
How to prepare to stay compliant and profitable,
And how this affects your rental income strategy as a property investor.
Under existing Spanish tax rules, short-term rentals are generally exempt from VAT unless you offer “extra-hotel services”, such as:
Daily cleaning during the guest’s stay
Reception or concierge services
Breakfast or other meals
Laundry service
Change of linens or towels during the stay
If your rental activity includes these services, the Tax Agency (Agencia Tributaria) considers it similar to a hotel business. In that case, you must charge 10% VAT on each rental invoice and register as a business activity.
If, however, you rent out a furnished property without offering these services—only providing cleaning before/after the stay, basic maintenance, and handing over keys—then no VAT applies under current rules.
This regime has been particularly favorable for private owners and small investors who wish to rent out their properties through platforms like Airbnb or Booking.com without becoming full-time business operators.
The change comes from a new EU directive aimed at modernising the VAT system across all member states: the “VAT in the Digital Age” (ViDA) reform.
Starting 1 July 2028, Spain will be required to charge VAT on all short-term rentals of 30 days or fewer, whether or not services are provided.
VAT will apply automatically to every short stay (30 nights or less).
Even passive rentals with no extra services must include VAT.
The standard rate is expected to be 10%, but discussions are ongoing—it could be revised up or down.
Long-term rentals (more than 30 days) will continue to be VAT exempt.
This reform aims to:
Create a level playing field between short-term rentals and hotels, which already apply VAT.
Harmonize taxation across the EU, making digital platforms and cross-border rentals easier to monitor.
Boost public revenue by capturing income from the growing short-stay rental market.
From 2028, owners who rent out properties for short stays will need to formalise their rental activity, including:
You’ll need to register with the Spanish Tax Agency using model 036 or 037, declaring your activity as a business operation subject to VAT.
You must charge 10% VAT on every short-term reservation (even if you don't provide extra services) and include it on a properly issued invoice.
You’ll be required to submit:
Model 303: VAT returns (usually quarterly)
Model 390: Annual VAT summary
Additional income tax returns depending on whether you're resident or non-resident
This includes:
Formal books of income and expenses
A digital registry of invoices
Proper accounting systems
If you work with an accountant or gestoría, this process can be streamlined—but it’s important to choose a firm experienced in non-resident property investors and short-term rentals.
Yes! Once you’re registered and charging VAT, you may also be entitled to deduct input VAT paid on expenses related to the rental activity, such as:
Renovations or refurbishments
Furniture and appliances
Utility bills (water, electricity, internet)
Property management and cleaning services
Professional fees (legal, tax advisory, etc.)
This can help you maintain or even boost your net rental income despite the 10% VAT obligation.
If you continue renting without charging VAT after July 2028—even by mistake—you could face:
Fines and interest for undeclared tax
Backdated VAT payments
Loss of the ability to deduct input VAT
Increased scrutiny from tax authorities
Additionally, digital rental platforms like Airbnb and Booking.com will likely be required to report your transactions and may even withhold VAT if you don’t register properly. Staying compliant will become unavoidable.
If you own or are planning to purchase an investment property for short-term rental in Spain, here are some proactive steps to take:
Will you continue with short stays post-2028? Or shift to 30-day+ rentals that remain VAT exempt?
Will you include VAT in your advertised rates or add it on top? If absorbed, it will reduce your margin—if passed on, it may affect demand.
Ensure that all invoices for property-related expenses include VAT and are correctly accounted for—so you can maximise deductions later.
Engaging a qualified tax advisor or gestoría will save you time, money, and potential compliance headaches. We can introduce you to trusted experts in Spain.
While this reform may feel like a burden, it’s also an opportunity: by preparing early, you can stay compliant, avoid penalties, and run your rental business more profitably. In fact, the ability to deduct VAT on expenses can significantly improve your overall tax efficiency.
At La Boutique Luxury Real Estate, we don’t just sell homes—we provide long-term value to our clients. If you're purchasing a property as a rental investment, we’re here to advise you on:
Where and what to buy for optimal ROI
Local licensing and tax requirements
The best legal and accounting support for managing your rental income
ROI stands for Return on Investment. It’s how you measure how profitable your property is compared to what you spent buying and maintaining it.
ROI (%) = (Net Annual Income / Total Investment) × 100
If you invest €300,000 and earn €24,000 per year net, your ROI = 8%.
Understanding ROI helps you compare potential purchases, weigh risks, and optimise for long-term profitability.
At La Boutique Luxury Real Estate, we help investors find properties with maximum earning potential. Here are our top tips:
Coastal hotspots like Moraira, Altea, Jávea, Denia, and Ibiza
Towns with high year-round tourism
Areas with existing tourist license frameworks
2-3 bedroom apartments or villas near the sea
Homes with pools, terraces, or sea views
Turnkey or newly renovated homes to reduce setup costs
We also guide you through licensing, legal checks, and property management to help you succeed.
By 2028, platforms like Airbnb will likely be obligated to report your income or withhold VAT on your behalf. If you haven’t registered or started collecting VAT, you risk:
Tax audits and fines
Back payments with interest
Account restrictions or suspension
Avoiding this will mean getting professional advice and acting early.
This VAT reform is not the end of rental profitability in Spain—it just changes the rules. With the right strategy, location, and tax planning, you can still generate excellent returns.
La Boutique Luxury Real Estate is here to help you adapt and thrive. Whether you’re buying your first rental property or scaling your portfolio, we provide:
Market insights
Legal coordination
Exclusive investment listings
Turnkey property management contacts
Let us help you stay compliant and successful long before 2028.
Ready to invest smart in the Spanish property market?
Contact us today for expert advice and tailored opportunities across the Costa Blanca and Balearic Islands.
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