Spain to regulate seasonal rentals and raise VAT on tourist flats to 21% in new housing package

The announcement

Government spokesperson Elma Saiz confirmed on Monday that the Council of Ministers will approve a new housing decree "in the coming weeks," before the August break. The package revives measures that Congress rejected in April, including an extraordinary extension of rental contracts, and adds a VAT increase on tourist flats to 21%.

“It is an ambitious and cross-cutting text that tackles the problem of access to housing in a comprehensive way.”

Two blocks of measures

The decree is structured in two parts. The first aims to lower rents, stabilise contracts and combat fraud. It includes regulation of seasonal and room rentals, mandatory written contracts, and IRPF tax bonuses for landlords who reduce rents. The second block focuses on mobilising affordable housing, with the VAT hike on tourist apartments and administrative streamlining measures.

Political context

The initiative comes as the government seeks to regain the political agenda after weeks dominated by corruption cases. La Razón described it as part of a pre-election push, with the housing package positioned as one of the major legislative projects of the final stretch of the legislature. The government intends to incorporate proposals supported by various political forces throughout the term so that "all groups feel represented," Saiz said.

“A problem like housing can only be solved through agreement, and if there is a reason to agree today it is, without a doubt, to respond to the main concern of the citizens.”

Previous rejection

The earlier decree, which included a rental extension until 31 December 2027, was voted down by Congress at the end of April. The new text broadens the scope to attract broader parliamentary backing, though the government’s fragile majority remains a challenge. The decree will first be approved by the Council of Ministers and then submitted to Congress for ratification.

What’s at stake

Housing remains one of the top concerns for Spanish citizens, according to government sources cited by eldiario.es. The measures aim to ease pressure on a market strained by rising inflation and limited affordable supply. The VAT increase on tourist flats is intended to shift properties back into the long-term rental pool, while the IRPF bonuses seek to incentivise rent reductions.