Prime Minister promotes ViDA VAT on home rentals to tackle housing shorting
Spain plans to raise taxes on holiday rentals so that they pay “like a business”, Prime Minister Pedro Sanchez said on Monday, as residents of the country’s main cities grappled with soaring rents. The change is backed by the EU VAT in the Digital Age reforms, which includes the mandatory measure by January 2030 under pillar 3, Platform Economy.
Spain is keen to level the playing field for hotels, which must charge 10% reduced VAT rate. The Prime Minister also sees the tax measure as a way to increase the supply of properties for resident Spaniards.
Whilst the measure is mandatory for all 27 EU member states from 2030, countries may go early from July 2028. Spain has already called for an early adoption of Platform Economy before July 2028.
Imposing VAT to shift housing shortage
Housing has emerged as a critical issue in Spain, where the nation faces the challenge of balancing its reliance on tourism—a cornerstone of the economy—with the growing problem of high rents. This issue is exacerbated by gentrification and the widespread conversion of residential properties into short-term rentals for tourists, which often offer higher returns for landlords. These trends are particularly pronounced in urban centers and coastal regions, where the demand for housing among Spanish residents frequently outstrips supply, leaving many struggling to find affordable and stable accommodation.
EU VAT in the Digital Age reforms
| EU VAT in the Digital Age | |
| 3 pillars to improve efficiency of VAT for all and reduce fraud | |
| 1. Digital Reporting Requirements; e-invoicing | Jul 2030-35: Mandatory digital reporting of intra-community transactions; obligation to be able to issue and receive intra-community e-invoices; member states free to impose own e-invoicing or real-time reporting but most conform to EU e-invoice standard EN 16931 |
| Read more about EU Digital Reporting Requirements (DRR) | |
| Structured e-invoices mandated for intra-community supplies | |
| EC Sales lists replaced by Digital Reporting Requirements | |
| Withdrawal of EU permission requirements for e-invoicing | |
| 2 Platform economy | Jan 2030: Travel & accommodation sharing platforms to become deemed supplier / liable to users' VAT. New definitions of the roles of providers, users and platforms to avoid double and no-taxation (voluntary Jul 2028) |
| Read more - Travel & accommodation platforms deemed suppliers for EU VAT | |
| 3 Single VAT Registration; extension of OSS | July 2028: Following the 1 July 2021 introduction of the One Stop-Shop (OSS), extended to cover movement of own stocks prior to cross-border B2C to reduce the foreign, non-resident VAT registrations & returns. Plus to movements of own stock with ending of 'call-off' stock burden |
| More details on Single VAT Registration in the EU | |
| Call-off stock VAT simplification ends | |
| Harmonisation of B2B Reverse Charge rules | |
