At present, the great majority of holiday rentals do not pay IVA (VAT). This is because they do not provide tourist services akin to those of hotels. Where these are provided, the IVA rate is the same as it is for hotels - ten per cent.
The government's tax measure would not only eliminate this distinction, it would remove IVA exemption altogether. The full 21% rate would apply to holiday rentals. The reason? "In order to reduce their profitability and transform them into housing for permanent rental, alleviating the lack of regular housing in stressed areas."
The manager of the Habtur holiday rentals association in the Balearics, María Gibert, hopes that the measure will not be accepted by Congress. "For now it is only a proposal and they do not have all the necessary support. It is a nonsense, as it harms the middle class, those families who rent out a property for a while."
There is also some confusion as to the potential application, a consequence in part of terminology. One aspect of this which has arisen is whether the intention is to apply IVA to all types of holiday rental or just to apartments. Reference to 'tourist apartments' has likewise raised alarm in the hotel sector.
The CEHAT hotel federation in Spain has drawn attention to the fact that a home dedicated to tourist activity is not the same as a tourist apartment with the AT registration, which is a type of regulated accommodation along hotel lines. These tourist apartments have key rather than star classifications and are subject to the 10% IVA regime.
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Higher Tax´s are not good for anyone in the short term good for the people in the Government when they splash a bit of money around to there friend´s obviously , they will tell you it´s a win win , most of them have never held or had a real Job which requires disipline and commitment soon it will lead to LOSE LOSE !