British holidaymakers heading to Spain could face higher costs from December 1, when a new 10% VAT charge on furnished holiday rentals takes effect. The tax applies to stays of 30 nights or less, unless the property is the landlord's usual residence.
Properties offering hotel-style services, such as cleaning, laundry, or restaurant facilities, will also be liable for the tax. Around 500,285 short-term rental listings in Spain could become more expensive as a result.
Government aims to tackle housing crisis
The tax forms part of a new housing decree that came into force on Thursday. It is designed to address Spain's housing shortage, which has sparked protests in cities such as Madrid and Barcelona over the number of short-term rentals used solely for tourist accommodation.
The issue intensified after the high-profile eviction of 87-year-old María del Carmen Abascal. Spain is expected to face a deficit of 800,000 homes by 2027.
Additional surcharge and price impact
The new legislation also allows town halls in designated housing pressure zones to impose an additional 50% IBI property tax surcharge on residential properties used for tourist accommodation. Additionally, housing cannot be acquired for less than 70% of its market valuation until December 2030.
Rupert Lee Browne, CEO of UK travel card company Caxton, told Metro how the tax might affect tourists. He said: "If the full 10% VAT is passed on to customers, a £1,000 rental would cost an additional £100, while a £2,000 booking would increase by £200."
He added: "The actual impact will depend on the price of the property and how individual owners respond to the change, so there won't be one universal increase for every traveller."
