10 % VAT on holiday lets: start date uncertain · outer limit July 2028. On 2 October 2026 Congress voted down Royal Decree-law 26/2026, which had set 1 December 2026, so that date no longer stands. The outer limit comes from Directive (EU) 2025/516: July 2028. We have it ready for whenever it comes in. Meanwhile we keep handling what is already compulsory today: Form 303 for the reverse-charge VAT on Airbnb and Booking fees, the EU VAT number (ROI) and Form 349.
The decree-law of 29 September 2026 would have applied VAT at the reduced rate of 10 % to furnished homes let to the same tenant for 30 nights or fewer, from 1 December 2026. Congress rejected it on 2 October and it lapsed before reaching a single stay, so a short let without hotel services is still exempt. The rule is expected back, because Directive (EU) 2025/516 treats short lets like hotels from July 2028 at the latest; from then on, this comparison will matter only for lets of more than 30 nights. See preparing for the 10 % VAT.
Start by accepting that it is usually not a choice
Spanish VAT exempts residential letting unless the landlord undertakes to provide services proper to the hotel trade. Cleaning during the stay, changing linen mid-stay, reception, meals: those are the services that break the exemption. Preparing the property between guests does not. So the regime follows what you actually supply, and the test is set out service by service in working out whether you provide hotel services.
Where there is room to decide is at the design stage: a new property, a refurbishment, a change of operating model. Then the question is genuinely open, and worth an hour with a spreadsheet.
The two positions as the law stands today
| Exempt letting | Taxable, hotel services | |
|---|---|---|
| VAT charged to the guest | None | Yes, at the reduced rate for accommodation |
| VAT on your costs | Not recoverable. It is part of the cost | Recoverable, subject to the ordinary rules |
| Quarterly VAT return for the rent | No | Yes |
| Registers | Light | Full registers of invoices issued, received and capital assets |
| Invoicing | Simple | An invoice per stay, with the VAT stated |
| Platform commission | Reverse charge due, and not recoverable | Reverse charge due, and recoverable |
| Price shown to the guest | One number | A number that has to be explained |
| Staffing | None required | Somebody has to actually provide the services |
Where the arithmetic tips
Being taxable is worth having when the VAT on your costs exceeds the VAT you would have to charge and hand over. That happens in one recognisable situation: a heavy investment year.
Take a flat being refurbished and furnished from scratch. Building work of 45,000 € and furniture of 15,000 € carry standard-rate VAT of roughly 12,600 €. Against that, a property letting for 28,000 € a year would charge accommodation VAT of about 2,800 € a year on its rents, less the recoverable VAT on running costs, say 900 € a year. So the annual cost of being taxable is around 1,900 €, and the one-off benefit is 12,600 €.
On those figures the investment is recovered in roughly six or seven years of operating as a taxable business — and the comparison is only honest if you also price the extra bookkeeping, the invoicing per stay and, above all, the cost of actually employing somebody to provide the services that make the position genuine in the first place. Add a part-time housekeeper and the arithmetic changes completely.
VAT recovered on capital assets is subject to adjustment if the use of the asset changes within the adjustment period, which runs for a number of years and is longer for immovable property than for other assets. Recover the VAT on a renovation, then stop providing hotel services two years later, and a proportion of what was recovered has to be repaid. Any plan built around recovering a large input VAT bill has to survive the whole of that period, not just the first summer.
What the guest sees, which is not a footnote
For short stays the question will disappear the day every holiday let on the platform carries the same 10 %; until then it is live for all of them, and for long lets it will remain. A serviced operator quoting 1,650 € a month is competing against an exempt neighbour quoting 1,650 € and keeping all of it. Either you charge more and lose the tenant, or you charge the same and absorb the difference. For a property with no real investment programme, that is a permanent margin reduction traded for a recovery you do not need.
The obligation that applies whichever side you are on
Platform commission carries Spanish VAT accounted for by you under the reverse charge, exempt or not. The difference is that an exempt landlord bears it as a cost and a taxable one recovers it. On 25,000 € of annual bookings at a 16 % commission, that is roughly 840 € of irrecoverable VAT a year for an owner whose lets are exempt, which today includes the ordinary holiday let; once short stays carry 10 % it will be recovered. It belongs in the comparison, and the registration it requires is described in joining the EU VAT register.
What a review looks at
If the question is ever raised, the examination is factual and it is not subtle. The listing as it was published, including the archived version. The contract with the management company and what it obliges them to do for guests. The cleaning invoices and their dates, compared with the arrival and departure dates of the bookings. Whether anybody is employed, and to do what. Guest reviews, which describe the service in the guests' own words and are public.
All of that is evidence about what actually happened during the stays, which is exactly the test. An owner whose listing, contracts and invoices tell one consistent story has very little to fear from the enquiry. An owner whose listing advertises a service that the invoices show was never supplied — or the reverse — has a problem that no argument about the law will solve.
What tips the balance on your holiday let
Not the rate. What decides it is whether you are running a property or running a business. If there is a person on the payroll, a reception of some kind and a real service during the stay, you are in the taxable world and the recoverable VAT is a consequence of a decision already made for commercial reasons. If there is no such person and no intention of hiring one, then declaring hotel services in order to recover VAT is not a plan: it is a statement that will not survive a review, and the signature on the return is yours.
The second thing that tips it is time. A 10 % VAT on every stay of up to 30 nights is on its way, on a date that is uncertain today and no later than July 2028. From then, a property let by the night or the week will recover its input VAT without adding any service, and the choice described here will only survive for lets of more than 30 nights, so staff hired purely to get there early have to pay for themselves in that window. What getting ready looks like in practice is set out in preparing for the 10 % VAT.
If you are within a year of a refurbishment decision, this is worth modelling with your own figures before the first invoice is issued, because the input VAT on work already done under the wrong regime is difficult to rescue afterwards, and VAT borne while the let is exempt is rarely recovered in full when the regime changes later. Tell us the numbers through the contact form. The background on the exemption itself is on our holiday let tax page.
Carmen's flat in central Málaga, over ten years
Royal Decree-law 26/2026 would have put stays of up to 30 nights at 10 % from 1 December 2026, with or without hotel services, and Congress voted it down on 2 October. So the case below is the law as it stands: to charge 10 % and deduct the VAT on works and running costs, Carmen has to provide and pay for genuine hotel services, and the exempt column A is open to her. When the short-stay VAT does start, on a date that is uncertain and no later than July 2028, a flat let by the night will reach the VAT position of columns B and C without that cost, and the choice will survive only for lets of more than 30 nights.
Carmen has just bought an old flat in the centre of Málaga to run as a tourist let. Before opening she has to refurbish and furnish it, and the budget contains about 9,000 € of VAT. An acquaintance offers an idea that sounds excellent: «provide hotel services, charge guests 10 % VAT, deduct all the VAT on the works, and the tax office gives you the 9,000 € back». The first part is true, with nuances. The second, in most cases, is not. We run it over ten years, because that is the period during which VAT deducted on a property may have to be adjusted if its use changes.
Her assumptions: 26,000 € a year charged to guests; 9,000 € of VAT on the works and furniture, paid in year one; 700 € a year of VAT on running costs (utilities, maintenance, replacements); and, to provide genuine hotel services — cleaning during stays, mid-stay linen change, guest attention — about 3,500 € a year plus 735 € of VAT.
Option A, exempt. She charges no VAT and deducts none. The 9,000 € and the 700 € a year are simply costs: 16,000 € over ten years. Of the 260,000 € collected, 244,000 € remains before the costs common to all options.
Option B, hotel services at the same price. Keeping 26,000 € with VAT inside, she charges 2,364 € of VAT a year, 23,636 € over ten years. She deducts all input VAT — 9,000 € of works, 7,000 € of running costs, 7,350 € on the hotel services — but pays for the services: 35,000 € over ten years. What remains: 260,000 − 23,636 − 35,000 = 201,364 €.
Option C, hotel services with a 10 % price rise. If she passes the VAT on and occupancy holds, she charges 28,600 € a year and keeps the same 26,000 € base, still paying for the services: 286,000 − 26,000 − 35,000 = 225,000 €.
| Ten years | A. Exempt | B. Hotel, same price | C. Hotel, price +10 % |
|---|---|---|---|
| Charged to guests | 260,000 € | 260,000 € | 286,000 € |
| Output VAT | 0 € | 23,636 € | 26,000 € |
| Input VAT deducted | 0 € | 23,350 € | 23,350 € |
| Input VAT borne as a cost | 16,000 € | 0 € | 0 € |
| Cost of the hotel services | 0 € | 35,000 € | 35,000 € |
| Left before common costs | 244,000 € | 201,364 € | 225,000 € |
| VAT result in year one | Nothing to declare on the rent | About 8,071 € in her favour | About 7,835 € in her favour |
The last row explains the appeal: in year one the hotel route shows thousands in her favour. The row above explains why it rarely pays: the service that earns the refund costs money every year, and so does the output VAT. Even if the services were free, which is roughly what the coming short-stay VAT will mean, option B would stop at 236,364 €, below the exempt route, and only a price rise that holds would beat it. Adding roughly 790 € a year of irrecoverable VAT on a 15 % platform commission over 25,000 € of bookings to column A leaves it around 236,000 €, still above both hotel options.
When the refund actually arrives
Unless you are on the monthly refund register, a credit balance is recovered at the end of the year, in the last return of the year, not when the builders leave. And a refund claim of several thousand euros from a newly opened tourist flat is exactly what gets reviewed.
When staying exempt is plainly better
When the flat runs without staff and nobody attends to guests during their stay. When the investment is already made and paid: VAT on old works, borne while exempt, is not recovered by switching now. When you compete on price with exempt neighbours for the same guests. And when the family uses the flat part of the year or it alternates with seasonal lets, because mixed use complicates both the deduction and its later adjustment. The comparison is summarised in hotel services or not, and a design-stage case can be sent through the holiday let form.