26/04/’26: by Domundos
A wave of articles has been circulating about a “new 10% VAT” coming for Spanish tourist rentals, and most of them are quietly mixing up two completely different pieces of legislation. One is a real, dated EU reform that every villa owner in Spain needs to plan for. The other is a domestic political proposal that hasn’t passed and may never reach the rate everyone keeps quoting. A recent piece from MAM Solicitors laid out the EU side well, so it’s worth using that as the starting point and then separating fact from speculation properly.
What’s actually law today
Start with the baseline, because most of the confusion online ignores it. Under current Spanish VAT rules, short-term tourist rentals are exempt from VAT unless the owner provides services typical of the hotel trade, such as a concierge desk, daily housekeeping, linen changes during the stay, or meal service. Cleaning and a linen change at the start and end of a booking don’t count. If hotel-style services are part of the package, the rental is already taxed at the reduced 10% rate, exactly like a hotel room. This is the Agencia Tributaria’s own published guidance, and it hasn’t changed. Anyone running a managed villa with full housekeeping and guest services has likely been inside the 10% bracket for years, whether or not their accountant has flagged it.
The EU reform that’s genuinely coming: Directive (EU) 2025/516
The confirmed change is the EU’s “VAT in the Digital Age” package, adopted by the Council on 11 March 2025 and entering into force for short-term accommodation and passenger transport platforms from 1 July 2028 (member states, Spain included, can defer this to 1 January 2030). Under the new rules, platforms like Airbnb, Booking.com and Vrbo become the deemed supplier of the rental for VAT purposes in certain circumstances, meaning the platform collects and remits the VAT rather than leaving it entirely to the host. The practical effect for owners: short-term rentals lose the automatic exemption that exists today, even when no hotel-type services are offered. Anyone renting short-term will need to register as a business for VAT purposes (via Modelo 036) and issue electronic invoices. The directive itself is on EUR-Lex and summarised by the European Commission, and BDO has a clear breakdown of why they describe the exemption as having an expiry date rather than disappearing overnight.
Here’s the part most coverage gets wrong: the directive does not fix a VAT rate. It changes who has to charge VAT and when, not how much. The 10% figure being repeated everywhere is an assumption, based on the idea that short-term rentals will simply be taxed the same way as hotels once they’re brought into the system. That’s the most likely outcome, but it isn’t written into the text. Avantio, a vacation rental management platform that has dug into the legal detail more carefully than most, points out that the new wording could just as easily exclude short-term lets from the reduced rate altogether, which would mean 21% rather than 10%. Their analysis is worth reading in full if you want the case for both outcomes. Until Spain transposes the directive into domestic law and Hacienda confirms the applicable rate, anyone telling you with certainty which number applies is guessing.
The separate, domestic proposal: 21% on short lets, and it isn’t EU-driven
The second source of confusion is a Spanish “Proposición de Ley” filed by the PSOE in May 2025, part of a broader affordable housing package. It would push short-term rentals under 30 nights, in towns over 10,000 residents, to the standard 21% rate, alongside a new tax on property purchases by non-resident non-EU buyers and a hike in SOCIMI taxation. Newtral has tracked the bill’s progress since it was registered, and as of now it remains stuck in the parliamentary process. It’s worth noting this isn’t the government’s first attempt at something similar: a near-identical measure was voted down in Congress in November 2024. Spain still hasn’t passed a 2026 budget, which means the country is operating under an extension of the 2023 budget, and a measure of this scale typically needs a budget law as its vehicle. None of this is connected to the EU directive. It’s a domestic, politically contested proposal that could change again before it ever becomes law, and conflating it with the 2028 EU reform, as several SEO-driven sites have done, produces headlines claiming a 21% rate is already coming for everyone. It isn’t, at least not yet, and not through that route.
What this means if you own a villa in Ibiza
The first thing to check is whether you’re already inside the 10% bracket without realising it. If your villa is rented out through a management company that handles cleaning, turnover, concierge and guest services as part of the package, that bundle likely already meets the hotel-services threshold the Agencia Tributaria sets out, which means VAT at 10% may already apply to your rental income today, regardless of what happens in 2028. Ask your gestor or your management company to confirm this directly rather than assuming either way. Owners renting out a property casually themselves, without that level of service, are more likely still sitting inside the exemption, which is exactly the group the 2028 reform is aimed at.
If you’re already in that 10% bracket, the 2028 deadline changes far less for you than the headlines suggest. The invoicing, the registration, the paperwork: a good management company will already have this sorted. If you’re not sure where you stand, now is the time to find out, well before 2028 forces the issue. The sensible move isn’t to panic about a number that isn’t fixed yet, on either the EU or the domestic front. It’s to get clarity on your own VAT position today, make sure whoever manages your villa is ready for e-invoicing and Modelo 036 registration, and treat 2028 as a deadline to plan for rather than a surprise to react to. The owners who get caught out won’t be the ones with proper management in place. They’ll be the ones who assumed the exemption was permanent.
