The 10 % VAT on a holiday let, in your own figures

What you need in front of you

Two figures for a typical quarter: what you bill your guests, and what you spend on costs that carry VAT at 21 % — utilities, cleaning, platform commission, repairs, furniture. The calculator then runs the two possible responses side by side, compared with the exempt position that applies today.

The two outcomes, and there is no third

Raise the price by 10 %. The guest pays more, your own income is unchanged, and the VAT is handed over. The risk is commercial: if your competitors hold their prices, you may lose bookings — although they are subject to the same 10 %.

Hold the price. What you charge becomes a VAT-inclusive amount, so your real income falls: of every 110 € you keep today, 10 € would belong to the tax office. You absorb the tax.

The formula

VAT payable = output VAT − recoverable input VAT. If you raise the price, the output VAT is 10 % of what you used to charge. If you hold it, the output VAT is calculated from the inside: the taxable base is the price ÷ 1.10, and the VAT is the difference. Input VAT on costs taxed at 21 % is the cost minus the cost ÷ 1.21.

Calculating VAT from the inside

This is where arithmetic goes wrong most often. If you charge 110 € inclusive of VAT, the base is 100 € and the tax is 10 €. Subtracting 10 % from 110 gives 99 €, which is wrong and makes you declare too little. The same applies to costs: an invoice for 121 € with VAT at 21 % included carries 21 € of input tax, not 25.41 €.

What your quarter will look like

• Registration for VAT on form 036, and an invoice for every stay.
• Registers of invoices issued and received, with the full details of every transaction.
• Form 303 every quarter, with base and tax separated by rate.
• If letting urban property is your only activity, no form 390 in principle: the year's totals go in the fourth-quarter 303.
• Partial deduction, if you also let for more than 30 nights — a mid-term let or a residential tenancy, which remain exempt. You only recover the share of input VAT attributable to the taxable side.

Deciding between raising and absorbing

The decision is commercial rather than accounting. Three things help settle it:

• What your direct competitors do. The change reaches the whole market, so raising does not put you at a disadvantage — it puts you where everybody else is.
• How much price drives your bookings. A high-season apartment in a sought-after area absorbs an increase far better than one competing on price in November.
• How much input VAT you carry. With high costs, the recovery cushions a meaningful part of the tax and absorbing stops being as expensive as it looks.

Three reactions that go badly

Writing it off because the decree fell is a mistake: the directive sets July 2028 as the outer limit, and once the tax applies it is due whether or not you add it to the price. Incorporating a company in a hurry does not solve VAT at all, since the 10 % applies to companies in exactly the same way, and it adds corporation tax and statutory accounts. And relabelling short stays as 31-night contracts fails, because the exemption follows the real length of the stay.

What applied before, and still does

You must be registered on the census, declare the income in your Spanish income tax return or on form 210, and — if you pay commission to Airbnb or Booking — be on the ROI, the register of intra-EU operators, and file form 349 under the reverse charge. That obligation applies today, with the letting exempt, and generates more non-compliance than anything else on this page; the difference the 10 % VAT will make is that the VAT you self-charge on the commission becomes deductible. See form 349 and platform commission.

Bookings already taken

The question that came up in September, and will again: a booking paid now for a stay after the start date — will it carry VAT? The general rule is that VAT falls due when the service is supplied, but advance payments trigger it when the money is received, which suggests that amounts collected while the letting is exempt carry none. That is a reading, not a settled answer, and it will depend on the new rule; keep those bookings listed by payment date and stay date so they can be reviewed once the date is known.

Why the measure was proposed

Holiday letting sits awkwardly in VAT. For the statute it is residential letting, which is why it is exempt; for the market it functions as accommodation, competing with hotels that charge VAT at 10 %. The decree-law tried to resolve that tension by putting short stays on the same rate as hotels, while leaving lets of more than 30 nights without hotel services, and the landlord's own habitual residence, outside it. Congress voted it down on 2 October 2026; the EU directive points the same way, with July 2028 as the outer limit.

What the calculator cannot tell you

It compares two scenarios with the numbers you type. It does not know whether you also have exempt lettings that drag you into partial deduction, whether some of your costs carry 10 % rather than 21 %, how bookings paid before the start date should be treated, or whether a given stay falls on the exempt side. Read the guide to the 10 % VAT on holiday lets for where things stand, and write to us if you want your own position looked at before deciding anything.

Where the rule stands

There was a date, and there no longer is. Royal Decree-law 26/2026 of 29 September was published in the BOE on 30 September 2026, and its article 7 was to apply from 1 December 2026: a furnished home let to the same tenant for no more than 30 nights would carry VAT at 10 %, with lets of more than 30 nights without hotel services still exempt, as well as the home in which the landlord habitually lives. Congress voted it down on 2 October 2026. The start date is uncertain; the outer limit, July 2028, comes from Directive (EU) 2025/516.

The two responses on a single 110 € night

The bottom row is the part owners forget: under either response, costs will start giving VAT back.

Already at 10 %: the owner who provides hotel services

This calculator compares "exempt" with "taxable at 10 %", which is the change in store for a plain holiday let. There is a third position that already exists: the owner who provides services typical of the hotel trade and has been taxable at 10 % from the first day. That owner already charges VAT, already files a 303 every quarter and already recovers VAT on costs. When the other short lets join the same rate, nothing will change for that owner: the measure touches the letting exemption, and the rate is the hospitality one that hotel-type accommodation is already paying.

Partial deduction, in practice

An owner who also has an exempt letting — a main residence let, or a long seasonal let — has taxable and exempt activity side by side, and only the share of input VAT matching the taxable side can be recovered. In day-to-day terms that means three piles of costs: those that belong wholly to the taxable letting, those that belong to the exempt one, and shared costs that have to be divided between them. It is the part of the change that adds most work to bookkeeping that used to be simple.

Getting ready while there is no date

Three things are worth doing now. Ask for every cost invoice in your own name: once the letting is taxed, each one will be worth its VAT. Review your census entry, because changing registered obligations takes days, not minutes. And keep the booking register in order, since it is what any apportionment will be built from. Alongside those, three decisions are better taken early: your pricing policy (raise, absorb or split the difference, with the listing ready), your profitability floor (if absorbing 10 % leaves you below what a seasonal let would earn, that is a different and better conversation to have in good time), and who will keep the quarterly books, which already exist today if a platform charges you commission.