Spain’s new package of housing measures brings changes for short-term rentals. From 1 December 2026, tourist accommodation will be subject to a 10% VAT rate. At the same time, municipalities in areas under severe housing pressure will be able to impose substantially higher property taxes on homes used for tourist accommodation.
The new legislative framework, which has entered into force in Spain, includes a broad range of measures affecting property owners, tenants, large landlords and, to a particularly significant extent, the tourist and short-term rental market.
The most important change for the sector is the introduction of 10% VAT on tourist rentals from 1 December 2026. The measure is expected to increase the tax cost of operating such properties and affect both owners and the final price paid by guests.
Up to 150% additional property tax on tourist accommodation
Municipalities located in officially designated housing pressure zones will also be able to impose a surcharge of up to 50% on property tax (IBI) for homes used as tourist accommodation.
The surcharge may rise further depending on the number of tourist properties owned. For owners with two or more such properties, it may reach 100%, while for those with four or more, it may rise to 150%.
In this way, the Spanish government aims to make the use of homes for tourist accommodation less attractive in areas where the housing market is under pressure.
Large landlords face tighter rules
The new framework also introduces stricter rules for so-called “large landlords.” This category includes those who own more than 10 homes, with the threshold falling to five homes in officially designated housing pressure zones.
Until the end of 2030, large landlords will not be able to acquire homes for less than 70% of their market value, subject to certain exceptions concerning social and affordable housing providers.
Lease extensions and caps on rent increases
The legislative package also extends a series of tenant protections.
Leases ending by 31 December 2028 may, under specific conditions, be extended for up to two years in annual increments. Tenants must request the extension and be up to date with their obligations.
The existing cap on annual rent increases will also remain in place until the end of 2027, with increases limited to 2% in cases covered by the relevant rules.
Stricter rules for temporary rentals
Significant changes are also coming to temporary rentals. These contracts must run for 31 days to 12 months, and landlords must be able to demonstrate that the rental is genuinely temporary.
If this cannot be established, the property may be treated as a primary residence and become subject to the corresponding tenant protections.
The framework also introduces rent controls for the rental of individual rooms.
Protection for vulnerable tenants facing eviction
The new framework extends protection until 2030 for vulnerable tenants facing eviction who have no alternative accommodation.
Where the landlord is a company operating in the property market for speculative purposes, the suspension of eviction may continue until the end of 2030. For other landlords, suspensions will be reviewed annually and may last for up to three years.
Regional governments will also be able to provide alternative accommodation for vulnerable tenants or cover unpaid rent and legal costs, with the Spanish state reimbursing the regions for the associated expenditure.
Tax incentives for landlords who reduce rents
The package includes tax incentives as well as restrictions.
Landlords who are not classified as “large landlords” and reduce the rent by more than 5% compared with the previous contract may benefit from tax relief ranging from 15% to 100%, depending on the conditions in each case.
Tenants with an annual income below €33,007.20 may also claim a 10% tax deduction for rent paid on their primary residence, with the maximum deduction depending on their income.
Support for first-time homebuyers
The government is also promoting interest-free loans through the ICO of up to €50,000 to cover the deposit required to buy a first home. €10 billion has been allocated to fund the programme.
New charges for property companies and vacant homes
Another measure of interest to the property market is the introduction of a special 25% tax rate on certain undistributed rental profits of SOCIMIs, Spain’s listed real estate investment companies. The measure also covers profits from tourist and short-term accommodation.
Municipalities will also gain greater tax flexibility in relation to homes left unjustifiably vacant for more than two or three years. The IBI property tax may be increased by up to 50% or 100%, with even higher surcharges possible in some circumstances.
Greater transparency in property listings
The rules on how rental homes are advertised are also changing. Listings will have to state the applicable rent reference index, any legal rent ceiling and, where required, whether the landlord is classified as a large landlord.
Spain is also establishing a new definition of “affordable housing”: housing whose purchase price or rent, together with associated costs, does not exceed 30% of the median household income in the municipality where the property is located.
The changes reflect a clear attempt by Spain to return more homes to the long-term rental market and ease the pressure created by tourist demand in areas where housing has become particularly expensive.
For the short-term rental sector, the combination of 10% VAT, higher property taxes and stricter rental rules creates a considerably tougher business environment.
The question now is whether the measures will actually shift homes from short-term to conventional long-term rentals, or whether some of the additional tax cost will be passed on to tourists through higher prices.
The new decree must be approved within a month by the Permanent Deputation of the Spanish Parliament. The government, however, has the parliamentary support needed to secure its approval.
