Spain has a new plan to limit the spread of short-term vacation rentals, raise revenue and encourage landlords to rent on a long-term basis to local residents. The plan, to be debated in the Congress this summer, would impose VAT (value-added tax) on rentals that don’t include hotel services.
Rentals that do provide services such as breakfast, cleaning and linen changes during the stay, receptionist, etc. are already subject to a 10% VAT that also applies to hotel rooms. Apartment rentals that don’t include services are exempt from VAT, but that would now change and the tax, at a 21% rate, would apply to rentals of less than 30 days.
In Madrid, meantime, local legislation is being prepared that would limit in what parts of the city new short-term rentals could be licensed, ban tourist apartments scattered in residential buildings, and end the conversion of ground-floor stores into tourist apartments. It would, however, in parts of the city, allow conversion of buildings to all-tourist, with a 15-year term, after which they would revert to regular housing.
Vacation rentals have become an increasing issue in Madrid because they have been largely uncontrolled; a recent study indicated that 86.5% of tourist apartments in Madrid either lack the proper license or fail to include it, as required, in their listing.
