VAT will not be charged on Mallorca holiday lets ... for now

The proposed rate was higher than what hotels charge

The holiday rentals association is dead against tax being charged. | Aina Ginard

Andrew EdePalma20/11/2024 08:21

The Habtur holiday rentals association in the Balearics has expressed its satisfaction that the Congress finance committee did not approve the charging of 21% IVA (VAT) on holiday let accommodation when it met on Monday evening.

A proposal of the PSOE-Sumar coalition government, it did not receive sufficient support from smaller parties, such as the PNV Basque nationalists and Junts per Catalunya. The manager of Habtur, Maria Gibert, thanked these parties for having listened to the requests of the holiday rental sector.

Gibert has argued that this measure would be very negative for the sector, which mainly comprises middle-class families who use this income as a supplement to live off. "It would be a major blow for small owners; they are not businesses."

(At present, the overwhelming majority of holiday rental properties do not charge any IVA. In the exceptional cases where it is charged, the rate is ten per cent, the same as for hotels.)

There are some 23,000 holiday rental properties in the Balearics. Habtur stresses that they have an important part to play in the regional economy, especially when it comes to redistributing wealth from tourism throughout society.

Although the finance committee didn't back the government's 21% proposal, it did agree to pursue amendment of the European VAT directive so that VAT can be charged on holiday lets. Gibert has expressed her hope that "this doesn't go any further".

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2 comments

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Lisa Julia | 4 months ago

Landlords don’t rent long term because of the law which gives squatters more rights than owners. Holiday rentals won’t become free for local people if they’re slammed with extra VAT. They’ll just become illegal holiday rentals. Then they’ll pay no tax. Currently all legal holiday rental owners pay tax on their earnings. They also have a responsibility to pay the tourist tax, which in theory they claim back from tourists. The truth is a lot more complicated than many have been led to believe.

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TC | 4 months ago

Add VAT to holiday rentals. Free up these properties for domestic rentals. Fill said rentals with illegal immigration adding one contributing worker and five family members. There is a plan.

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