The Spanish Government proposed a set of fiscal measures concerning the housing sector, from increase in the VAT rate for short-term rentals, an increase in property taxes when a foreign person acquires property in Spain, and higher penalties for short-term rental digital platforms.
The proposal is to introduce the housing package measures through Royal Decree as a law.
Short-Term Rentals
The Government proposal is to increase the VAT rate on tourist accommodation that offer hotel-like services from the current reduced rate of 10% to the standard rate of 21%. The increased tax rate should affect landlords/agencies that offer short-term rentals that include services typical of the hotel industry(reception, cleaning during the stay, and other services).
Along with the increase of the VAT rate on short-term rentals, the proposal introduces a possibility for municipalities to increase the surcharge of up to 100% on property tax for certain purchasers(mainly non-EU residents).
The decree should incorporate new formal requirements for landlords/agencies when it comes to short-term rentals. The Agreements should specify and provide proof of the reason justifying the temporary nature of the stay. If this reason does not exist or cannot be proven, the contract will be considered a long-term residential lease with retroactive effect.
Platform Economy
There is a proposal to expand the scope of requirements for online booking accommodation platforms, such as Airbnb and Booking, to prepare and submit additional informational reports concerning the landlords and transactions, where the platform intermediates in the short-term rental.
This is one of the measures that follow the pace of the ViDA reform of the platform economy.
The provisions that look to expand the scope of collaboration between tax authorities and digital platform operators have already mentioned the provisional penalty framework for platform operators that aren’t compliant with the new measures(if adopted).
The penalties regime includes fines of up to one million euros or 2% of global turnover for the most serious infractions, as well as penalties of up to 500,000 euros for providing incomplete or inaccurate data.
What’s Next
The adoption of the Government proposal now awaits the formal support of Congress.