As part of its ongoing efforts to regulate tourism and protect local communities, Spain is considering introducing a new 21% value-added tax (VAT) on short-term rentals, which is twice the current rate applied to hotels.
The proposed tax, which would apply to all units rented for less than 30 days, could directly impact a third of the annual visitors to Spain – 94 million last year and more expected this year – who prefer short-term rentals via platforms such as Airbnb or Booking.
This could in turn translate into a shift away from holiday rentals or generate substantial new revenues for the state to invest in alleviating the crisis by reducing speculative investment, and redirect housing supply toward long-term rentals for residents.
Tourists staying in hotels across Spain currently pay a 10% tax on rooms. In the Canary Islands, both hotels and short-term rentals are taxed at a lower rate of 7%.
The 21% tax proposal is part of a broader housing and tourism reform bill introduced by Spain’s minority Socialist-led government. However, deep divisions within the government may pose challenges to its passage.
💬 Spain calls to block over 65k Airbnb ads for being considered 'illicit'
— Catalan News (@catalannews) May 19, 2025
"Residents are now being evicted from their neighborhoods and watching their cities become theme parks," minister Pablo Bustinduy said
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As frustration grows among the population, the country is under pressure to balance the economic benefits of tourism – a key pillar of the national economy – with the legitimate concerns of residents. These range from a severe housing shortage and soaring rental prices to water scarcity and ecological degradation.
According to a report published by the Bank of Spain, there is currently a shortage of 450,000 homes. This situation has been exacerbated by short-term rentals, with the report noting that half of the housing in the Canary and Balearic Islands is either used for tourism or owned by non-residents.
Last Friday, Isabel Rodriguez, the Housing Minister, defended the bill, saying: ‘Homes are for living in (…). The measures seek to guarantee the right to rental housing for families’.
If the bill is passed, the hope is that it will make short-term rentals less attractive to owners and will be accompanied by the additional measure announced in January of a tax of up to 100% on property purchases by non-EU residents, unless it is their primary residence, as well as a tax increase on owners of empty houses, including secondary residences.
"No vamos a parar hasta solucionar el problema de la vivienda y vamos a poner todos los recursos que sean necesarios para abordarlo".
— PSOE (@PSOE) May 25, 2025
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Javier Peñate, legal advisor to a holiday homeowners’ association in the Canary Islands, says, ‘The sole objective is to put an end to these activities and leave (tourism) in the hands of hoteliers’.
However, the measure has attracted criticism from within the sector, with Apartur, an association of apartment owners in Barcelona, calling it discriminatory and arguing that the rate paid by short-term rentals should be the same as that applied to hotels.
The government removed 65,000 unregulated Airbnb listings as part of a wider enforcement push to ‘return balance’ to communities impacted by tourism. The strictest measures regarding tourist accommodation have been introduced in Barcelona. While Málaga and Madrid will cap new licences, Barcelona will ban them altogether.
These measures have been introduced in response to growing unrest and a wave of protests in Spain against overtourism, which has affected the country. Other measures include capping visitor numbers in tourist hotspots, creating designated tourist areas near iconic monuments, suspending agreements with influencers, requiring tourists to present booking confirmation at the border or when checking in, and introducing heavier fines for misconduct ranging from inappropriate dress to public urination.
