10% VAT on holiday lets from 1 December

In short

Spain's Royal Decree-law 29/2026 of 6 October (Official State Gazette, BOE, 7 October) changes the VAT Act: from 1 December 2026, renting out a furnished flat or house for 30 nights or fewer to the same tenant is no longer exempt and is taxed at the reduced rate used for hotels: 10%. It is article 7 of the decree, amending articles 20.Uno.23.º e') and 91.Uno.2.2.º of Law 37/1992.

What the law actually says

The new letter e') of article 20.Uno.23.º says that rentals of furnished flats or houses are not exempt when either of these applies:

1. The landlord undertakes to provide any of the ancillary services typical of the hotel trade: restaurant, cleaning, laundry or similar. This was already the case.
2. New: the stay for the same tenant does not exceed 30 nights, unless it is in the home where the landlord has their habitual residence, which stays exempt.

Article 91 then places these rentals under the reduced rate. The limit counts nights, per tenant: exactly 30 nights is taxed at 10%; 31 is not.

Who it affects in Mallorca

In practice the change hits holiday homes let by the week without hotel-type services: most of the villas and flats on Airbnb, Booking or booked direct. Hotels and agroturismos already charged VAT and see no change.

What it does to your prices: two examples

If you keep the final price. A week at €1,400 including VAT: the net price is 1,400 / 1.10 = €1,272.73 and the VAT €127.27, which you pay to the tax office. Same price for the guest, 9.1% less for you.

If you raise the price. To keep €1,400 net, the guest pays 1,400 × 1.10 = €1,540.

Low season, a house at €180 a night for 5 nights: €900 net plus €90 VAT, €990 in total.

The upside: once you charge VAT, you can deduct the VAT you pay on what you need for the rental (outsourced cleaning, laundry, repairs, utilities in the business's name, management fees…), under the general rules. While exempt, that VAT was simply a cost.

Bookings you already have for December onwards

The decree has no transitional rule for bookings made before 1 December. The general VAT rule applies: tax arises when the service is provided, but advance payments trigger it when collected, for the amount collected (article 75.Dos of Law 37/1992). Under that rule, a deposit taken in November for a January stay would follow the November rules and the balance the January ones. Check this point with your tax adviser before invoicing.

Also look at the 2027 prices you have already published: if the decree is ratified, a rate set without VAT on your website or the platforms may lose you 10%.

What to do if it is ratified

1. Register for VAT with the Spanish tax agency (census return, form 036/037) if you were not, under the right activity heading.
2. Invoices showing the 10% separately for each stay.
3. Quarterly VAT return (form 303) and the annual summary (form 390), unless your scheme exempts you from it.
4. Check your contract with your management company: who invoices the guest and who pays the VAT.
5. Update prices and wording on your website and the platforms, so guests can see whether VAT is included.

The tourist tax does not change

The Balearic tourist tax (impuesto sobre estancias turísticas, the "ecotasa") is a separate regional tax: its rates and low-season discount stay the same. See our article on the 2026 Mallorca tourist tax.

The rest of the decree that touches holiday homes

• Tenancy Act (LAU): letting a furnished home marketed through tourist channels and subject to tourism rules falls outside the LAU and may not exceed 31 days (new article 5.e). Anything longer is a seasonal or residential tenancy.
• Property tax (IBI): town halls in areas declared stressed residential markets may add a surcharge of up to 50% of the bill on properties used as tourist accommodation, 100% if the owner has two or more, and 150% with four or more (new article 72.4 ter of the Local Finance Act). It depends on each town hall and on the municipality being declared stressed.
• Platforms: fines of up to one million euros for short-term rental platforms that break the data rules of the Single Digital Rental Window (VUDA).

How to explain it to guests

• If you raise prices, say it plainly: "from 1 December 2026, holiday rentals in Spain carry 10% VAT".
• Keep it apart from the tourist tax: they are two different things and appear separately on the invoice.
• German and British guests know it as "Mehrwertsteuer" or "VAT" from home.