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Property News
If you own a rental property in Spain and feel like the rules are changing faster than you can keep up with them, you are certainly not alone. Over the past few weeks, property owners, landlords and property management companies have had to navigate a remarkable sequence of events. New rental and housing rules came into force - Then they were rejected by Congress - They disappeared.
And now many of the same measures are back — in a new Royal Decree-Law that has already been published in the Spanish Official State Gazette.
So, what actually happened?
On 29 September 2026, the Spanish Government approved Real Decreto-ley 26/2026, a major package of housing measures covering areas including taxation, rental housing, tourist accommodation and the supply of affordable housing. It was published in the Boletín Oficial del Estado (BOE) on 30 September and entered into force on 1 October.
Among its measures was a significant proposed change to the VAT treatment of furnished apartment and residential rentals. From 1 December 2026, the legislation was intended to introduce a 10% IVA rate for qualifying furnished rentals of 30 nights or less, with an exemption where the property was the landlord's habitual residence.
For owners and managers of short-term rental properties, this was potentially a major change. Then, almost immediately, the situation changed.
The Royal Decree-Law became effective. Property owners and businesses began assessing what the measures could mean for their rental operations.
Just one day later, the Congress of Deputies voted to reject Real Decreto-ley 26/2026.
Under Article 86 of the Spanish Constitution, Royal Decree-Laws can enter into force immediately but must subsequently be submitted to Congress for convalidation. Congress rejected the decree. The BOE subsequently published the formal resolution derogating it, meaning its provisions — including the planned amendments to the VAT legislation — were left without effect.
So, for a brief period, the position was:
1 October: New rules.
2 October: New rules rejected.
After 2 October: The measures contained in the decree were no longer in force.
And now… the rules are back
On 6 October, the Spanish Government approved a new housing package. This time the main legislation affecting property taxation and short-term rentals is Real Decreto-ley 29/2026, which was published in the BOE on 7 October 2026.
It enters into force on 8 October 2026.
The Government has therefore moved quickly to reintroduce many of the measures contained in the rejected decree. And the new legislation specifically includes the proposed changes to the VAT treatment of furnished short-term rentals.
However, there is an important qualification. Because Spain's Parliament has been dissolved following the calling of the general election, the new Royal Decree-Law must be submitted to the Diputación Permanente of Congress for convalidation. In other words:
The new decree is now in force — but its continued survival depends on parliamentary convalidation.
What is happening with the 10% IVA on short-term rentals?
This is likely to be the issue of greatest interest to Costa del Sol holiday-rental owners. Under Real Decreto-ley 29/2026, changes to Spain's IVA legislation are scheduled to take effect from 1 December 2026.
The new rules provide for a 10% IVA rate on qualifying furnished apartments or homes where:
There is a specific exception where the property is the landlord's habitual residence in the circumstances set out in the legislation. This represents a significant change from the existing VAT treatment of many tourist rentals.
Under the current framework, a tourist accommodation rental where the landlord does not provide hotel-type services can generally fall outside VAT and instead be subject to the relevant property-transfer tax rules. Where qualifying hotel-type services are provided, the rental can already be subject to VAT at 10%.
The new legislation would therefore substantially broaden the circumstances in which short-term furnished rentals fall within the 10% IVA regime.
For owners in Marbella, Estepona, Benahavís, Manilva,Casares, Sotogrande and the wider Costa del Sol, the potential implications are significant.
A 10% IVA charge could affect:
The exact financial impact will depend on how each property and rental business is structured. For example, owners may need to consider whether the VAT is absorbed into existing prices or passed on to guests, as well as the potential impact on margins and operating costs. For non-resident owners, these considerations are particularly important because Spanish rental taxation can already involve a number of different reporting and compliance requirements.
But there is another important change: IBI
The new legislation also gives municipalities in declared areas of stressed residential markets the ability to impose an additional IBI charge on residential properties being used as tourist accommodation.
The potential surcharge can be:
Importantly, this is not an automatic nationwide 150% increase.
The legislation gives municipalities the power to introduce such a surcharge through their own tax ordinances, and the measure applies in municipalities located in areas formally designated as stressed residential markets. This means the practical effect will vary from one municipality to another. For property owners, it is another reason to monitor not only national legislation but also local regulations.
The new housing package also targets the use of temporary rental contracts. According to the Government, the legislation reforms the Leyde Arrendamientos Urbanos (LAU) with the aim of preventing what it describes as fraudulent use of seasonal rental contracts.
Under the new framework, landlords using a temporary rental contract will generally need to justify the reason for the tenant's temporary stay. The Government's announcement states that seasonal rentals will generally have a minimum duration of 31 days and a maximum of 12 months, with additional provisions applying where temporary contracts are repeatedly chained together.
This is particularly relevant to owners and operators who offer properties for medium-term or seasonal stays rather than traditional holiday lets. It reinforces the importance of clearly establishing the l egal basis and purpose of each rental arrangement.
As of 8 October 2026, the position is considerably clearer than it was a few days ago.
Did the original housing decree come into force? Yes. Real Decreto-ley 26/2026 was published on 30 September andentered into force on 1 October.
Was it rejected by Congress? Yes. Congress rejected it on 2 October.
Was it subsequently derogated? Yes. The BOE published the formal resolution on 2 October.
Has the Government introduced a replacement? Yes. Real Decreto-ley 29/2026 was approved on 6 October andpublished in the BOE on 7 October.
Is the new decree currently in force? Yes. It entered into force on 8 October 2026.
Is the 10% IVA provision already being charged? No. The relevant VAT amendments have effect from 1 December 2026, subject to the continued validity of the new Royal Decree-Law.
Is the new decree finally settled? Not yet. It must still be submitted to the Diputación Permanente for convalidation following the dissolution of the Cortes Generales.
So the current situation is:
We did - We didn't. And now we do again — for the moment.
For owners of holiday and short-term rental properties along the Costa del Sol, this is not simply a technical change buried within Spanish tax legislation. The region has a large and established short-term rental market, with thousands of apartments and villas catering to international visitors.
For owners in popular destinations such as Marbella, Estepona, Benahavís, Manilva, Casares and Sotogrande, changes to taxation and rental regulation can have a direct impact on the economics of operating a property as a holiday rental.
The potential introduction of 10% IVA could influence pricing, profitability and booking strategies.
Meanwhile, the additional rules around temporary rentals and potential local IBI surcharges demonstrate the wider direction of Spanish housing policy: greater regulation of properties being used for tourist and short-term accommodation and stronger controls around the use of residential housing.
Spain's rental regulations are becoming increasingly complex
The events of the last few weeks demonstrate something that property owners are increasingly discovering. Managing a rental property in Spain is no longer simply acase of putting a property on Airbnb and handing guests the keys.
Owners and operators may need to consider:
And, as the last few weeks have demonstrated, the rules themselves can change remarkably quickly.
The most important advice is not to make major financial or operational decisions based solely on headlines. The new Real Decreto-ley 29/2026 is now published and has entered into force, but its continued validity depends upon parliamentary convalidation.
The proposed 10% IVA changes are currently scheduled to take effect on 1 December 2026, so owners and property managers should be preparing to understand the potential implications rather than assuming that the issue has disappeared. At the same time, individual circumstances matter.
Whether a particular property falls within the new VAT regime, how rental income should be accounted for, and how any changes affect a particular owner's tax position should be assessed with an appropriately qualified Spanish tax adviser or legal professional. The BOE remains the definitive source for the legislation.
At Iberia Living, we understand that keeping up with Spanish property legislation can be almost as challenging as managing the property itself. For owners of holiday and mid-term rental properties on the Costa del Sol, regulatory compliance is an increasingly important part of successful property management. We continuously monitor changes affecting short-term and mid-term rentals, taxation, licensing and property operations so that our owners can stay informed and make better decisions.
The latest developments are a perfect example. A major housing decree was introduced.
It was rejected - It was repealed - And within days, a replacement decree containing many of the same measures was published. So yes, the rules can change quickly!
And sometimes the most important question isn't simply “What are the new rules?” It is: “Which version of the rules are actually in force today?”
For Costa del Sol property owners, that distinction could make a significant difference.
Iberia Living
Property Management & Rentals | Costa del Sol
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