Balearic Tourist Lets: 10% VAT From 1 December and the 12 November Vote
Balearic Islands property update · 18 October 2026
Short answer: Royal Decree-law 29/2026, in force since 8 October 2026, would end the VAT exemption for furnished tourist lets of 30 nights or less in a home that is not the landlord’s main residence, applying 10% VAT from 1 December 2026. The decree still has to be validated by Congress; the vote is expected on 12 November. Owners in Mallorca, Ibiza and Menorca should prepare for both outcomes rather than assume either.
Key facts at a glance
- Who: the Spanish Government (Council of Ministers), by Royal Decree-law 29/2026 of 6 October, published in the BOE on 7 October 2026.
- What: 10% VAT on furnished tourist lets of up to 30 nights per guest where the home is not the landlord’s main residence; an optional municipal IBI surcharge on tourist homes in declared stressed housing areas.
- Where: all of Spain, including the Balearic Islands.
- When: VAT change takes effect on 1 December 2026; validation vote expected on 12 November 2026.
- Background: an earlier version (Royal Decree-law 26/2026) was repealed after Congress declined to validate it on 2 October 2026.
- Not confirmed: whether Congress will validate the new decree, and whether any Balearic municipality can use the IBI surcharge (it requires a declared stressed area).
What has happened, and where it comes from
On 6 October 2026 the Council of Ministers approved Royal Decree-law 29/2026 on urgent measures to protect the social function of housing and expand affordable supply. It was published in the Boletín Oficial del Estado (BOE-A-2026-20823) on 7 October and entered into force on 8 October.
It replaces an earlier decree. Royal Decree-law 26/2026 of 29 September contained a similar VAT change, but the Congress of Deputies voted not to validate it on 2 October 2026 and it was repealed (BOE-A-2026-20526). Because the VAT measure was due to start on 1 December, it never applied to any stay.
Article 7 of the new decree amends the VAT Act (Ley 37/1992). Furnished flats and houses let for stays of no more than 30 nights per guest, where the home is not the landlord’s habitual residence, would no longer be exempt and would be taxed at the 10% reduced rate. Lets that include hotel-type services were already outside the exemption. Both VAT changes have effect from 1 December 2026.
A decree-law must be validated by Congress within 30 days of its promulgation (Article 86 of the Spanish Constitution). Reports published on 16 October indicate the Diputación Permanente of Congress is expected to vote on 12 November 2026. Until that vote, the outcome is open.
What it means for Balearic owners
If the decree is validated, owners letting a second home to tourists for short stays would start charging VAT on bookings made for stays from 1 December. In practice that can mean registering for VAT with the Agencia Tributaria, issuing invoices and filing periodic returns. Non-resident owners should ask an adviser whether they also need a tax representative in Spain.
If the decree is not validated, it will be repealed before 1 December and the current position continues: residential lets are generally VAT-exempt, but lets with hotel-type services are taxed at 10%.
The decree also lets town halls in declared stressed housing areas (zonas de mercado residencial tensionado) impose an IBI surcharge on tourist homes through a tax bylaw. On 1 October 2026 the President of the Balearic Government, Marga Prohens, said the Balearic Islands do not apply the stressed-area mechanism of the Housing Act, as reported by Europa Press. While that remains the case, Balearic councils would have no basis to apply the surcharge. Owners should still check the position with their town hall.
Maximum IBI surcharge on tourist homes under RDL 29/2026
Cap as % of the IBI bill, only in municipalities within declared stressed areas, set by local tax bylaw
Source: Royal Decree-law 29/2026, Article 8 (amending Article 72 of the Local Finance Act), BOE 7 October 2026.
In text form: the surcharge can reach 50% of the IBI bill, 100% for owners of two or more residential properties and 150% for owners of four or more. These are maximums; each council decides whether to apply any surcharge.
What to check now
| Check | Why it matters |
|---|---|
| Typical stay length per guest | The 10% rate targets stays of 30 nights or less. |
| Bookings already taken for December onwards | Prices quoted VAT-inclusive or exclusive affect your margin if the decree is validated. |
| Services offered (cleaning during stay, breakfast, laundry) | Hotel-type services already attract 10% VAT under current rules. |
| Your ETV licence and registration status | Tax changes do not alter licensing duties under Balearic tourism law. |
| Number of residential properties you own | Determines the IBI surcharge cap if your municipality ever applies one. |
| Purchase plans | Buyers of a licensed property should model returns with and without 10% VAT. |
Legal context
VAT is a state tax, so the change applies across Spain. Tourist licensing in the Balearic Islands is a regional and island-council matter, and nothing in this decree changes the ETV licence system. The IBI surcharge depends on a stressed-area declaration under Spain’s Housing Act (Ley 12/2023), which is made at regional level. The decree also contains IRPF, SOCIMI and plusvalía measures that are outside the scope of this update.
Announced is not final. The decree is in force but provisional. If Congress does not validate it, it is repealed and the 1 December VAT change will not take effect. Check the result of the vote before changing prices or registering for VAT.
Next steps
- Note 12 November 2026 and check the outcome of the validation vote.
- Review December and January bookings and how prices were quoted.
- Ask a tax adviser how VAT registration and invoicing would work for your situation.
- Confirm with your town hall whether any IBI surcharge is planned.
- If you are buying a licensed property, ask your lawyer to add the VAT point to due diligence.
Frequently asked questions
Is 10% VAT on Balearic holiday lets already in force?
Not yet. The decree is in force, but the VAT change only takes effect on 1 December 2026, and the decree must first be validated by Congress, with a vote expected on 12 November 2026.
Which lets would be affected?
Furnished flats and houses let for stays of up to 30 nights per guest where the home is not the landlord’s main residence. Lets with hotel-type services were already taxed at 10%.
Does the IBI surcharge apply in Mallorca?
Only in municipalities within a declared stressed housing area, and only if the council adopts a tax bylaw. On 1 October 2026 the Balearic Government said it does not apply the stressed-area mechanism, so the surcharge has no current basis in the islands; check locally for any change.
What happens if Congress rejects the decree?
It is repealed and the VAT change does not take effect, as happened with Royal Decree-law 26/2026 on 2 October 2026.
Related guides
Own or buying a holiday let in the Balearics?
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Source and scope: Royal Decree-law 29/2026 of 6 October (BOE-A-2026-20823, published 7 October 2026); Resolution of 2 October 2026 repealing Royal Decree-law 26/2026 (BOE-A-2026-20526); Spanish Constitution, Article 86. Vote date as reported on 16 October 2026; Balearic position on stressed areas as stated by President Marga Prohens on 1 October 2026 (Europa Press). Checked on 18 October 2026. General information, not individual legal advice.
Sophie Gutenberg is a legal content specialist focused on Spanish property law, real estate transactions, conveyancing, due diligence and tax issues affecting international property buyers in Spain. She works alongside qualified Spanish property lawyers .
