Spain’s Prime Minister Pedro Sanchez has announced plans to hike taxes on holiday rentals in an effort to balance the country’s thriving tourism industry with rising residential rents. The new measures aim to align the tax rates for short-term rentals with those of businesses.
The move follows a European Union directive on value-added tax for digital platforms, which requires that hotels pay a reduced 10% VAT rate. Under the new plan, holiday rental companies will also be subject to this rate, similar to hotels and workers.
Sanchez promised tougher measures to combat fraud around short-term rentals, while also introducing exemptions for landlords who keep rents in line with official price indexes. The government plans to promote social housing construction and cede land to a public housing agency.
The move is part of a broader effort by Sanchez’s minority government to address the country’s rental crisis. However, critics argue that the measures do not go far enough to address the root causes of gentrification and landlords’ abuse of the system.
With several protests already underway, citizens are demanding action to stop price gouging and ensure fair housing practices. The Bank of Spain has warned of potential economic and social effects from households overstretching to pay their rents.
Source: https://www.reuters.com/markets/europe/spain-raise-taxes-holiday-rentals-pm-says-2025-01-13