VAT regulations for tourist and short term rentals in Spain
1. The legal framework for VAT on rents in Spain
The rental of real estate in Spain is regulated by Law 37/1992 and its implementation in Royal Decree 1624/1992. This legislation distinguishes between residential rentals, which are generally exempt from VAT, and rentals with hotel-type services, which are subject to VAT, normally at 10%.
Applicable VAT rates
2.1. Rental with hotel-type services - 10% VAT.
If the rental (overnight stay) includes services such as regular cleaning, change of bed linen and towels, or hotel-like care, a reduced VAT rate of 10% applies. This includes short-term tourist rentals.
2.2. Renting without hotel services
Short-term or long-term rentals without additional services are generally exempt from VAT, provided that they do not include hotel-like services.
3. Practical examples
- Final cleaning only: Exempt from VAT for long stays; 10% may be applied in tourist cases.
- Weekly cleaning and change of sheets: 10% VAT.
- Extended services (breakfast, excursions): 21% VAT may apply.
4. For further information
- Visit the: Tax Agency's website.
- See legal texts such as Law 37/1992 and Royal Decree 1624/1992.
- Review binding rulings of the Directorate General for Taxation.
Summary
- Hotel services: 10% VAT.
- Without additional services: Generally exempt.
- Extended services: If additional included services are provided that are not directly related to the overnight stay, a VAT rate of 21% will be applied.
- For commercial purposes without services: When the accommodation is offered through a company that sub-rents it to third parties for commercial purposes, a VAT of 21% is applied.
Always consult a tax advisor to ensure compliance and avoid future problems.