10% VAT on Holiday Rentals: Will Balearic Villas Cost More?

From 1 December 2026, a furnished home let to the same guest for no more than 30 nights is taxed at 10% VAT in Spain, under Real Decreto-ley 29/2026. Whether your villa costs more depends on the operator, and nobody can yet say how much Balearic prices will move.

Quick answer

• The 10% VAT applies to stays of 30 nights or fewer in furnished homes, from 1 December 2026 (RDL 29/2026, art. 7).
• The owner or operator charges and pays the VAT. Whether they add it to your price or absorb it is not set by the decree.
• There is no official price data yet, so any forecast is a guess.
• If you booked before 1 December, the law gives no clear answer on whether VAT can be added. Read your confirmation and ask in writing.
• A message asking you to "pay the extra 10% now" to a new account is a red flag.

What is the new 10% VAT on holiday rentals in Spain?

Until now, letting a furnished home in Spain without hotel-type services was generally exempt from VAT as a residential letting. Real Decreto-ley 29/2026, of 6 October 2026, changes that. Article 7 amends article 20.Uno.23 of the VAT law (Ley 37/1992) so that the exemption no longer covers furnished apartments or homes let for 30 nights or fewer to the same tenant. The rate comes from article 91 of the same law, which already taxes hotel services at 10% and now names these lettings too. The text is in the Boletín Oficial del Estado, and the government's own plain-language page says the same: a 10% VAT charge.

What is covered, and what is excluded?

For a guest, the practical test has three parts.

• Furnished home. A villa, apartment or house that is furnished.
• 30 nights or fewer. The decree counts nights, and per tenant. It is not a limit of 30 nights per year, although some press reports have said so. The BOE text says "noches" and "un mismo arrendatario".
• Not the owner's habitual residence. If the owner lives there, the let stays exempt.

Stays over 30 nights without hotel-type services stay exempt. Lettings that come with hotel-type services (the complementary services typical of the hotel industry) were already taxed at 10%, so nothing changes for them.

How back-to-back or split bookings by one guest are counted is not covered by the decree text, and we found no official guidance.

Hotels already charge 10% VAT on accommodation, so the measure puts short lets on the same rate.

Will Balearic rental prices go up?

Nobody can say yet. We found no official data on holiday-rental prices in Ibiza, Mallorca, Menorca or Formentera since the measure was announced, and the rule starts on 1 December. Any percentage increase quoted is a forecast.

What can be said is how the mechanics work.

• VAT is charged by the business, not paid by you to the state. The owner or operator is the VAT taxpayer and, under article 88 of the VAT law, must pass the tax on in the invoice, with the VAT shown separately.
• The price you see may or may not change. Either the owner adds 10% to a net price or the VAT is treated as part of the price. If an owner adds 10%, a EUR 2,000 stay becomes EUR 2,200. If the owner keeps the guest price at EUR 2,000 and treats it as VAT-inclusive, about EUR 1,818 is left as the net revenue.
• Owners can now deduct input VAT. VAT paid on costs such as cleaning or commissions can in principle be deducted (article 94). The Habtur president has said this partly offsets the cost.

On supply, the Balearic Government's Decreto Ley 4/2025 bans new tourist places in multi-family buildings across the islands, with new places allowed only through swaps and a transitional pool. Villas are single-family houses and are not covered by that flats ban. The ban mainly limits flats, so it is context rather than a forecast for villa prices.

For scale, the National Statistics Institute counted 21,304 tourist dwellings in the Balearics for May 2026.

An industry view, attributed: the president of the Habtur holiday-home association said in the Balearic press on 9 October that owners will have to absorb the 10% on prices already agreed.

I already booked a villa for 2026 or 2027: can the price go up?

The answer is unclear, and VillaVerify cannot tell you whether you must pay.

What the law does say:

• The advertised price must include taxes. The consumer law (Real Decreto Legislativo 1/2007, TRLGDCU) requires the final complete price including taxes in the commercial offer (art. 20.1.c), the total price including all taxes before contracting (art. 60.2.c), and, for distance contracts such as online bookings, the total price including taxes and fees (art. 97.1.e).
• Price-increase clauses are policed. Article 85.10 lists as abusive clauses that let a business raise the final price above the agreed one without objective reasons and without giving the consumer a right to cancel if the final price turns out much higher.
• The VAT law pulls the other way. Article 88 of Ley 37/1992 says a taxpayer must pass VAT on and that the recipient must bear it whatever the contract says, as long as the pass-on follows the VAT law. It also says the recipient need not bear the tax before it falls due.

The decree has no transitional rule for bookings made before 1 December, and we found no official guidance, court ruling or consumer-authority statement on whether VAT can be added to a price agreed earlier. Whether a quote of, say, EUR 5,000 for summer 2027 counts as VAT-inclusive depends on the wording of your contract and confirmation. We cannot say you may refuse an extra charge, and we cannot say you must pay it.

What you can do:

1. Read your contract and confirmation for words such as "taxes included" or "VAT".
2. Ask the operator in writing what the price includes and whether VAT will be added.
3. Ask for an invoice with the VAT shown separately.
4. Keep the answer and every message.

If the operator insists, use the platform's dispute process or a consumer authority.

Could a "pay the extra 10% VAT" message be a scam?

This section is VillaVerify's own advice. We found no official warning from police, consumer bodies or the cybersecurity agency tying fraud to this tax change, and we are not suggesting one exists.

The change is real and widely reported, so a genuine operator may ask about VAT, and a fraudster can imitate that message just as easily. Treat these as red flags:

• A message telling you to "pay the extra 10% now" or the booking will be cancelled.
• A request to transfer money to a new or different account from the one in your contract.

Before paying anything, check that the message really comes from the business you booked with, using the contact details in your original confirmation rather than the message. Pay only to an account in that business's name, or through the platform. Check the operator on VillaVerify through the operators directory or the home page checker, and read our guide on how to avoid getting scammed. If something looks wrong, report it to VillaVerify.

VillaVerify's automated checks can be wrong, so treat a result as one input, not a verdict.

Is the 10% VAT law final?

The decree is in force and the VAT applies from 1 December. It was published on 7 October 2026 and Congress's Diputación Permanente convalidated it on 12 November 2026, as shown in the BOE resolution of 13 November. Press reports put the vote at 35 to 34.

The Cortes were dissolved, a general election is set for 29 November 2026, and the new chambers meet on 23 December. Press reports say the leader of the Partido Popular, Alberto Núñez Feijóo, has said the housing decree would be repealed if the party forms a government; we found no statement singling out the tourist-rental VAT. A future government could change the rule.

Does the Balearic tourist tax (ecotasa) change?

The ecotasa is a separate tax, and RDL 29/2026 does not mention it. The Balearic Government's official calculator lists the ecotasa rates as "+10% VAT (not included)". We found no tax ruling specific to the Balearics on whether VAT applies to the ecotasa on a villa stay, so ask for the breakdown in writing. The decree itself does not change the ecotasa.

Questions people ask

Is there VAT on holiday rentals in Spain?

From 1 December 2026, yes, for most villa and apartment lets of 30 nights or fewer: 10% VAT under RDL 29/2026. Stays over 30 nights and the owner's own home stay outside the rule.

Will the 10% VAT make Balearic holiday rentals more expensive?

It may, but there is no official data yet. The operator can add the 10% or absorb it. Compare the total price including taxes before you book.

Do I have to pay VAT on a villa I booked before 1 December?

There is no official guidance. The decree has no transitional rule. Check your contract and ask the operator in writing what the price includes.

Does the 10% VAT apply in Ibiza and Mallorca?

Yes. It is a Spanish national VAT rule, so it applies across the Balearics (Ibiza, Mallorca, Menorca and Formentera) from 1 December 2026.

Do stays longer than 30 nights pay VAT?

No, under the decree a let of more than 30 nights to the same tenant without hotel-type services stays exempt.

Is the 30-night limit per year or per stay?

Per stay. The BOE text refers to nights for the same tenant, not nights per year.

Before you send any money

Our automated checks can be wrong, so use them alongside your own checks, such as the steps in 5 steps before you rent. This guide is not tax or legal advice. The charter explains how VillaVerify works.