Learn about your VAT obligations as a property owner
Regarding VAT, we also find a general rule, which is that, in principle, the rental of housing is exempt from VAT (art. 20.1.23b LIVA).
However, and this is fully applicable to the rental of tourist or holiday homes, Article 20.1.23b in its section e) itself indicates an exception to this exemption:
“The leases of furnished apartments or homes, when the landlord undertakes to provide any of the complementary services typical of the hotel industry, such as restaurant, cleaning, laundry or other similar services.”
In this case, the lease will be subject to 10% VAT (art. 91.one.2.2º LIVA).
According to the Directorate General of Taxes, reception services and utility costs included in the rental price are not considered complementary services specific to the hotel industry. Cleaning and linen changes performed before and after the rental period are also not considered as such.
What happens when a management company gets involved?
As we mentioned at the beginning of the article, there is a wide range of options in this area, and a direct transfer of the property between the owner and the tenant is not always the norm. Sometimes the transfer is carried out through a management company.
Generally speaking, VAT ( 21%) is levied when a property is rented to legal entities or professionals who use the property for their business or professional activity. Therefore, when the owner rents their property to a company that then arranges (on its own behalf) with the end user for the holiday rental, the owner must issue an invoice to the managing company at the aforementioned 21% VAT rate. The managing company, in turn, will issue an invoice with a 10% VAT rate if, in addition to the rental itself, it provides complementary services typical of the hotel industry.
The intervention of an intermediary
Finally, there is also the option of booking a vacation or tourist rental through an intermediary. In this case, the intermediary acts on behalf of the owner, finding clients for them, while the owner contracts directly with the end user. This service typically involves a commission that the intermediary will invoice to the owner, which will be subject to 21% VAT. The owner, in turn, will be required to issue an invoice with 10% VAT to the tenant if they provide any additional services typical of the hotel industry.
We summarize the different possibilities in the following table, always from the point of view of the tax payable to the owner:
| Type of transfer |
No services. Hotel Industry |
Yes, industrial services. Hotel industry |
| Direct |
No VAT |
VAT 10% to tenant |
| Through a Management Company |
VAT 21% to management company |
VAT 21% to management company |
| Through an intermediary |
Receives invoice with VAT (21%) from intermediary for the commission / Does not issue VAT |
Receives a 21% VAT invoice from the intermediary and issues a 10% VAT invoice to the tenant |
We hope this article has answered your questions. If you'd like to learn more about the impact on personal income tax (IRPF), please see the article "How is tourist apartment rental taxed? IRPF." In any case, please don't hesitate to contact us if you need further clarification or wish to explore this further.
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A graduate in Law and with a Master's degree in Tax and Financial Management from the University of Barcelona, he also holds a Postgraduate Diploma in New Technologies Law from ESADE. He specializes in tax and corporate law.
Before joining Àmbit Assessor as manager in 1999, he worked as head of the Tax and Accounting department at the Busquets Terradellas law firm.
For years, he combined his work with teaching, serving as a professor of Public Finance and Tax Law at the Open University of Catalonia.
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