Value Added Tax

General information:

Whoever rents tourist accommodation has, for VAT purposes, the status of entrepreneur ( art 5 .uno.c LIVA).
As long as rentals of tourist accommodation are carried out by businessmen, they are subject to VAT ( art 4 .uno LIVA).
Subjection to VAT determines the non-subjection to the concept of Onerous Property Transfers of the Property Transfer Tax (ITP), unless the VAT exemption is applicable ( art 4 . four Value Added Tax Act).
In accordance with the case-law of the Directorate General for Taxes (consultation V0420-18, among others), income from the rental of private holiday rental homes in which the lessor does NOT provide services characteristic of the hotel sector, is exempt from VAT and, therefore, subject to Property transfer for valuable consideration of the Property Transfer Tax. In such cases, the lessor shall not file or pay VAT.
If services specific to the hotel industry are provided, the rental of a tourist apartment will not be exempt from VAT and must be taxed at the reduced rate of 10 per 100 as a hotel establishment by application of art 91 .one.2. 2 LIVA and in accordance with the criteria of the General Directorate of Taxes. See consultation V0714-15.
In the ITP, Property Transfer Tax, specifically Property transfer for valuable consideration, the tax rate for leasing shall be obtained by applying to the net tax base the rate established by the Autonomous Community.

If the Autonomous Community has not approved the rate set in the previous paragraph, the following scale shall be applied:

	Euros
Up to 30.05 euros	0.09
From 30.06 to 60.10	0.18
From 60.11 to 120.20	0.39
From 120.21 to 240.40	0.78
From 240.41 to 480.81	1.68
From 480.82 to 961.62	3.37
From 961.63 to 1,923.24	7.21
From 1,923.25 to 3,846.48	14.42
From 3,846.49 to 7,692.95	30.77
From 7,692.96 hereinafter, 0.024040 euros for every 6.01 euros or fraction.

(Article 12.1 of the Legislative Royal Decree 1/1993, of 24 September).