Draft housing reforms target short-term rentals, booking platforms and landlord obligations—but approval remains uncertain.
The Spanish Government has unveiled one of its most ambitious proposals yet to reshape the country’s short-term rental market, with plans that would significantly increase taxes on holiday lets while imposing strict new rules on landlords and booking platforms.
The proposed decree, agreed by Spain’s governing coalition of PSOE and Sumar, is designed to encourage more properties back into the long-term rental market amid ongoing housing shortages in many parts of the country.
However, the legislation has not yet been approved. The parliamentary vote has been postponed until after the summer recess as the minority government currently lacks sufficient support to pass the measures.
What Is Being Proposed?
If approved, the reforms would dramatically alter the economics of operating holiday rental properties across Spain.
21% IVA for Short-Term Rentals
One of the biggest changes would see many holiday rentals lose their current VAT exemption.
Under the proposal:
- Short-term rentals of 30 days or fewer
- Located in municipalities with more than 10,000 residents
would become subject to Spain’s standard 21% IVA (VAT) rate.
This represents a significant increase from the current framework and would remove the reduced treatment enjoyed by much of the tourism accommodation sector.
Property Tax Could Double
The proposal would also give local councils new powers to increase annual property taxes on holiday rentals.
In designated high-demand housing areas:
- Holiday rental properties could face an IBI surcharge of up to 50%
- Owners with four or more tourist properties could see that surcharge increase to 100%
The aim is to discourage large-scale investment in short-term accommodation where housing supply is under pressure.
31-Day Maximum Holiday Let
The decree would also establish a maximum duration of 31 consecutive days for holiday rental stays.
Longer occupancies would instead fall under residential tenancy regulations.
Major Fines for Airbnb and Booking Platforms
The reforms extend beyond landlords, placing significant new obligations on digital booking platforms including Airbnb and Booking.com.
Platforms would be required to provide rental information to Spain’s Ventanilla Única Digital (Single Digital Window)registry.
Failure to comply could result in substantial penalties:
- Up to €1 million or 2% of global annual turnover for very serious breaches.
- Up to €500,000 or 1% of global annual turnover for serious infringements.
- €100,000 for minor administrative failures such as late submissions.
New Rules for Residential Tenancies
The proposed legislation also introduces several measures aimed at strengthening tenant protections.
Seasonal Rental Contracts
Landlords would be required to clearly justify why a tenancy is temporary.
If sufficient evidence is not provided, the agreement would automatically convert into a standard primary residence tenancy, with full legal protections applying retrospectively.
Property Repairs
If landlords fail to carry out essential repairs within 15 days of receiving a written request and reasonable quotation, tenants would be allowed to complete the work themselves and deduct the cost from future rent.
Rent Freeze
Existing residential leases expiring before 30 June 2028 would benefit from a proposed two-year rent freeze.
Insurance Costs
Landlords would no longer be permitted to pass tenant default insurance costs onto renters.
Higher Taxes for Residential Socimis
The package also affects institutional investors.
Residential Socimis (Spanish REITs) would see the tax rate on undistributed profits rise from 15% to 25%.
Companies allocating at least 80% of their residential portfolio to affordable housing would qualify for a 50% reduction in that tax.
Political Uncertainty Remains
Despite the breadth of the proposed reforms, none of the measures are currently law.
The government’s parliamentary majority remains fragile, with several key parties opposing the package in its current form.
- Junts has criticised the proposals as overly interventionist, calling instead for tax relief for small landlords and stronger anti-squatting measures.
- Podemos has raised concerns that elements of the accompanying land reforms could unintentionally encourage property speculation.
As a result, the legislation has been delayed until Parliament returns after the summer recess, where its future will depend on securing enough political support.
What This Means for the Property Market
If ultimately approved, these reforms would represent one of the most significant regulatory changes to Spain’s holiday rental market in recent years.
For property owners, investors and agencies operating in the short-term rental sector, the proposals could substantially increase operating costs while introducing tighter compliance requirements.
For now, however, the measures remain proposals rather than law, and the final legislation could change considerably during the parliamentary process.
