The Spanish government is seeking parliamentary approval for a new 21% value added tax on short-term tourism rentals - double the tax paid for hotel rooms - as it seeks to address a housing crisis. The maximum tax rate would apply to all rentals under 30 days and affect around a third of the 94 million annual visitors to Spain last year who opted to rent a home over a hotel room. At present there is no VAT on short-term rentals in mainland Spain, while hotel visitors pay a 10% tax on rooms. The measure is contained in a wider bill that the minority, Socialist-led government may struggle to get through a deeply polarised parliament.
"Homes are for living in (...) the measures seek to guarantee the right to rental housing for families," Housing Minister Isabel Rodriguez said on Friday about the bill's unveiling. Spain is trying to balance maintaining tourism as its economic engine while addressing popular concern over high housing costs as landlords opt for more lucrative tourist rentals.
A Bank of Spain report this week said the country has a deficit of 450,000 homes. Half the housing stock in the Canary and Balearic islands is either tourist accommodation or homes owned by non-residents, it said.
Apartur, an association of tourism apartment owners in Spain's second city Barcelona, argues that shorter-term rentals should pay the same VAT as hotels and calls the proposed 21% VAT rate discriminatory. The bill under consideration also includes a controversial measure first announced in January to tax non-European Union citizens up to 100% on property purchases unless it will be their primary home, as well as increasing taxes payable by owners of empty properties, including second homes.
"The sole objective is to put an end to these activities and leave (tourism) in the hands of hoteliers," said Javier Peñate, legal advisor to a holiday homeowners association in the Canary Islands, where short-term rentals already pay 7% VAT, as do hotels. Local and regional authorities are also capping new licences for tourist rentals in Malaga and Madrid, while banning them entirely in Barcelona by 2028.
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Genius! Punish the small legal tourist rental folk … maybe more will become illegal? No one will rent - squatters rights are far too draconian. Wonder who came up with this brilliant idea? Maybe (just a random thought) the fat cat CEO group hotel owners. Yep, those powerful guys and gals who continue to channel funds to multi national companies. And anyone noticed, hotel rooms are now being advertised on Airbnb …. I thought it was illegal to rent signal rooms??? One law for hotel owners and another for the rest of the population. Now there’s a shock.
The housing problem is probably not caused by holiday rentals, it’s because the law punishes home owners in Spain and does not protect them from squatters and bad tenants or at least that is what most home owners think. If owners were really protected and compensated by their government then I imagine Spain would gain 500,000 longterm rental properties in a matter of months. I work with property and probably 90 of the owners of second homes that I meet in Spain that are Spanish and foreigners are totally terrified of longterm renting their property and would never ever do it. Why? because they think that the state does not protect their rights and they think the tenants will stop paying after two months and totally trash the place and get away with it and live free for two or three years. Imagine that you rent a place that you own and after two months the occupants stop paying not only their rent but also their electricity and water and the state says that you now have to pay it for them for the two years it takes to get them out. And when you get your property back it’s completely destroyed and the tenants are laughing because they can get away with it in Spain. If we stop holiday rentals and just have hotels, then we might as well close down thousands of restuarants and bars too, because hotel guests pay for their hotel food and drinks in advance in England or Germany… to the foreign travel agents. Hotel chains and travel agents often make their money outside of Spain, so actually Spain already benefits massively from people staying in private accommodation. It would be a financial disaster for business in Spain employing people in tourist areas if we stop private holiday accommodation. Yes the waiters , cooks, bar men, taxi drivers, shop staff would be able to find a cheaper property to rent, but they will not have a job, unless they work in a hotel. El problema de la vivienda probablemente no sea causado por los alquileres vacacionales, sino porque la ley castiga a los propietarios de viviendas en España y no les protege de los okupantes y los malos inquilinos o al menos eso es lo que piensan la mayoría de propietarios de viviendas. Si el gobierno realmente protegiera y compensara a los propietarios, imagino que España ganaría 500.000 viviendas de alquiler a largo plazo en cuestión de meses. Trabajo con inmobiliaria y probablemente 90 de los propietarios de segundas residencias que conozco en España, tanto españoles como extranjeros, tienen un miedo terrible a alquilar su propiedad a largo plazo y jamás lo harían. ¿Por qué? Porque creen que el Estado no protege sus derechos y que los inquilinos dejarán de pagar a los dos meses, destrozarán la vivienda y se saldrán con la suya, viviendo gratis durante dos o tres años. Imagina que alquilas una vivienda de tu propiedad y, al cabo de dos meses, los ocupantes dejan de pagar no solo el alquiler, sino también la luz y el agua, y el Estado dice que ahora tienes que pagarles durante los dos años que tarde en desalojarlos. Y cuando recuperas tu propiedad, está completamente destruida y los inquilinos se ríen porque pueden salirse con la suya en España. Si eliminamos los alquileres vacacionales y solo tenemos hoteles, entonces también podríamos cerrar miles de restaurantes y bares, porque los huéspedes de los hoteles pagan por adelantado la comida y las bebidas en Inglaterra o Alemania... a las agencias de viajes extranjeras. Las cadenas hoteleras y las agencias de viajes a menudo ganan dinero fuera de España, así que, de hecho, España ya se beneficia enormemente de la gente que se aloja en alojamientos privados. Sería un desastre financiero para las empresas españolas que emplean a personas en zonas turísticas si eliminamos los alojamientos vacacionales privados. Sí, los camareros, cocineros, baristas, taxistas y empleados de tiendas podrían encontrar una propiedad más barata para alquilar, pero no tendrían trabajo, a menos que trabajen en un hotel.
Morgan WilliamsHow about building affordable housing for locals. And pushing up wages. Maybe even diversifying the economy. Rebalancing could be difficult and no doubt resistance from vested interests. But it can’t go on doing nothing and blaming the other.
David HollandI doubt either has a chance. There is a plan C; ban or otherwise make it impossible or impractical for foreigners to buy property (e.g., 100% tax). But that's as unlikely as A and B. So, what to do? Ban artichokes. Or kitchen towels. Or tourism. Or something... at least they'd be doing *something*.
Morgan WilliamsOptions b has the best chance I think.
Well it will raise tax income. Not sure it will fix the housing crisis. It will certainly please the hotel industry.
Ulla JacksonYou don't have to look very far to discover that the problem with the cost of housing isn't tourism. In Hamburg, the average house price is 4879€ per square meter. That would largely apply to virtually any major city in Germany. The average annual salary in Germany is 51876€. Many people make much more than that. In London, the average house price is £8,090 per square meter. The average annual salary is £47500. Again, many make much more than that. Other cities around the world will have similar stats. The average house price in Mallorca is 3300€ per square meter, which, for the average local annual salary of 25500€ is very expensive. Yet, for much of the "rest of the world" house prices here seem very attractive by comparison to their local economies. So, either make worldwide incomes less, or increase local incomes, and that is the only way to solve the problem. Forcing a cut house prices will only make them more attractive to the "rest of the world" and not solve the problem. And no matter what they do with tourism, it will have no impact on house prices, because tourism isn't the driver of house prices. Does that clarify things?
Morgan WilliamsA. How do you find a way to "lower the salaries in rest if the world"? B. There are plenty of people in "in the rest of the world" who also have serious problem to find housing. C. Morgan, I think you must have been too long on the island, when I read your "proposals" and seem to have little understanding about housing in other places.
A tax on illegal rentals.....that's going happen not.
The Spanish people’s psychology has always been that the Govt takes [ actually steals) your money. But illegals are everywhere. It pisses me off, but, I don’t blame them. The governance of this lovely country is crapped by crappy politicians.