On 12 November 2026 Spain's Congress upheld Royal Decree-law 29/2026. From 1 December, holiday lets of up to 30 nights pay 10% VAT, town halls may add an IBI surcharge on tourist homes from 2027, rent increases stay capped at 2% and a 0% state loan for first-time buyers is on the way.

What Congress approved on 12 November

The Standing Committee of Congress (Diputación Permanente) upheld Royal Decree-law 29/2026 on 12 November by 35 votes to 34. It is the decree on the social function of housing and affordable supply, published in the BOE on 7 October. The second decree, 28/2026, which would have renewed tenancies automatically, was rejected by the same margin and has lapsed.

Spain holds a general election on 29 November. The decree stays in force unless a future parliament changes it.

Holiday lets: 10% VAT from 1 December

Until now, renting out a furnished home without hotel services was exempt from VAT. From 1 December 2026, furnished lets pay 10% VAT when the owner offers hotel-type services or when each guest stays 30 nights or fewer, even without services.

• Not affected: the owner's own main home, lets of more than 30 nights and contracts under the Tenancy Act (LAU).
• Owners, including private individuals and non-residents, become VAT taxpayers: registration, invoices and returns. In exchange they can deduct the VAT they pay on costs.

IBI surcharge and municipal capital gains tax

From 2027, town halls in areas declared as stressed residential markets may add a surcharge to the IBI of tourist homes: up to 50%, up to 100% if the owner has two or more, and up to 150% with four or more. It only applies if the town hall approves it in its tax bylaw. Homes left empty for more than two years without good reason may also be surcharged.

From 1 December 2026 new maximum coefficients also apply to the municipal capital gains tax (plusvalía) under the objective method. You can still pay on the real gain if it is lower, and no tax is due if there was no gain.

Long-term rentals: 2% cap and extensions

• Annual rent updates are capped at 2% until 31 December 2027.
• Tenants with a main-home contract ending by 31 December 2028 can request an extension of up to two years if they are up to date with rent; the landlord can refuse in specific cases, such as needing the home for themselves or close family.
• Seasonal contracts need a real, stated reason, and management fees cannot be passed on to tenants.

Buyers: the 'Tu Casa' loan

The decree creates a €10,000 million line managed by the ICO: interest-free loans of up to 20% of the home's value, with a maximum of €50,000 and ten years to repay, to help solvent first-time buyers cover the deposit. The banks taking part, the requirements and the start date have not yet been published.

What it means for you

• You let your home to holidaymakers: talk to your tax adviser before 1 December about VAT registration, invoicing and your prices for 2027.
• You let long-term: plan your 2027 update with the 2% cap and check whether your tenant can request an extension.
• You are thinking of selling: ask us for a valuation and an estimate of the plusvalía with the new coefficients.
• You are buying your first home in Spain: do not count on 'Tu Casa' until the ICO publishes the conditions.

Indicative information; check with your tax adviser or lawyer.

Frequently asked questions

Does the 10% VAT apply to my holiday home if I only let it in summer?

Yes, if each stay is 30 nights or fewer and it is not your main home. What matters is the length of each stay, not how many months a year you let it.

I am a non-resident owner. Am I affected?

Yes. The decree includes non-resident owners: they must register for VAT, issue invoices and file returns, and can deduct the VAT on their costs.

Will my IBI go up in Alfaz del Pi or Benidorm?

Only if the area is declared a stressed residential market and the town hall approves the surcharge in its tax bylaw. It cannot apply before 2027.

Read more

• How much does it cost to buy a home in Alicante in 2026?
• Selling as a non-resident: the 3% withholding step by step
• Free valuation of your property

Do you own a holiday let or a rented home on the Costa Blanca? Ask Costa Prime for a free valuation and we will tell you how these changes affect what your property is worth today. Office 965 064 440 · WhatsApp 601 868 660. We specialise in Alfaz del Pi, Albir, La Nucía, Altea, Benidorm and Finestrat, with an office in Albir.

Sources

• Real Decreto-ley 29/2026, de 6 de octubre (BOE-A-2026-20823, BOE 07/10/2026)
• El Diario de Madrid, 12/11/2026: votación en la Diputación Permanente
• Tourinews, 13/11/2026: IVA y recargo del IBI para viviendas turísticas
• Notarías Barcelona: novedades fiscales del RDL 29/2026
• idealista/news, 06/10/2026: préstamos «Tu Casa» del ICO