Mallorca Holiday Rentals: New 10 Percent VAT From December 2026

If you rent out an apartment or finca on Mallorca to tourists, things get more expensive and more complicated from December 2026. With Real Decreto-ley 29/2026, the Spanish state is introducing a 10 percent VAT on short-term holiday rentals, municipalities in stressed housing markets can additionally raise the IBI property tax, and since this summer illegal rentals have faced daily fines of up to 5,000 euros. This post works through what that means for a finca with an ETV licence and for a regular holiday apartment, and shows what to watch for now on your tax return and platform settlements.

The New 10 Percent VAT on Short-Term Holiday Rentals

VAT on holiday rentals (IVA in Spanish) is the tax the Spanish state has levied on short-term rentals since Real Decreto-ley 29/2026. If you rent out a furnished apartment for a maximum of 30 nights and it is not your main residence, a flat 10 percent VAT applies to the rental income from 1 December 2026.

Until now, plain residential rentals without extra services were exempt from VAT. Only rentals with hotel-like services, such as cleaning during the stay or a reception desk, counted as taxable. That changes with Real Decreto-ley 29/2026: from December, the short rental period alone is enough to trigger the 10 percent, regardless of whether you offer breakfast or a towel service. According to the Agencia Tributaria, this affects furnished apartments or houses that you rent out for a maximum of 30 nights to someone who does not have their habitual residence there. Your own main home stays exempt, even if you rent it out briefly from time to time.

The Ecotasa, the Balearic tourist tax, continues independently of this and comes on top. For how to register for it, see the post on registering for the Ecotasa with Modelo 017.

IBI Surcharge in Stressed Housing Markets: 50, 100 or 150 Percent

Municipalities can decide to apply a surcharge on the IBI property tax for tourist-use properties in an area officially classified as a stressed housing market zone. The tiers go up to 50, 100 or 150 percent of the regular IBI amount, depending on how each municipality frames its ordinance.

This is an option for the municipality, not an automatic obligation. Whether and at what rate your municipality applies the surcharge is set out in its Ordenanza Fiscal, which you can check at the town hall or online. In practice, three questions matter most:

• Is your property in a zone the municipality has designated as stressed?
• Has the municipality already passed its own Ordenanza Fiscal including the surcharge?
• Does your apartment count as tourist use, or does the exemption for your main home apply?

For how the IBI is calculated in general and which figures matter, see the guide to IBI calculation.

Daily Fines of Up to 5,000 Euros for Illegal Rentals

Separately from the national tax reform, the Balearic government already tightened its tourism law in the summer of 2026. Anyone who offers holiday accommodation without an ETV licence and keeps renting it out after being warned by inspectors has, since July 2026, risked a daily fine of between 500 and 5,000 euros until the rental stops. The rule targets continuing to operate without a licence after a warning, not every single unregistered night.

The classification of stressed housing markets and the Balearic tourism containment policy are set out in the CAIB documentation on Contención Turística. What an ETV licence actually is and how to apply for one is covered in the post on the ETV licence and illegal holiday rentals.

Worked Example: What the New VAT Means for Your Rental

The 300 euros in VAT come on top of the existing tax on rental income, they do not replace it. If you rent out as a foreign owner without Spanish tax residency, you still declare the rental income through Modelo 210. If you are a Spanish tax resident, it runs through your regular income tax return. On top of that, from December 2026 there is the quarterly VAT return via Modelo 303, if your rental falls under the new rule. In practice, that means four extra deadlines a year that used to apply only to autonomos or to holiday apartments with hotel-like services.

Not Yet Final: The Missing Confirmation by the Congreso

Real Decreto-ley 29/2026 came into force on 8 October 2026, after the Congreso de los Diputados had struck down an almost identical decree, RDL 26/2026, just a few days after it was issued on 2 October 2026. A decreto-ley takes effect immediately in Spain, but parliament must confirm it within 30 working days, otherwise it loses its effect retroactively. Because the Cortes are currently dissolved, the Diputación Permanente decides on confirmation. At the time this post was written, no date for that had been set.

Is the new VAT obligation already certain, or could it still be struck down?

Legally, it applies from 1 December 2026, as long as parliament does not reject the decree beforehand. That is exactly what happened with the previous version, so it is worth checking the official Agencia Tributaria website shortly before the deadline.

Do I have to show the new VAT separately from the Ecotasa?

Yes, the two charges are independent of each other and appear separately on the invoice to your guest: the Ecotasa as the Balearic tourist tax, the VAT as the national tax on the rental income itself.

Conclusion

Holiday rentals on Mallorca get more expensive on several fronts from December 2026: 10 percent VAT on short-term rentals, a possible IBI surcharge from your municipality, and continuing daily fines for anyone renting out without a licence. Legally, the VAT reform is not set in stone until the Congreso confirms it, but you should still plan for it now. If you are unsure how this affects your own tax return, it is best to discuss the figures early with a tax advisor, before the first invoices with the new VAT go out in December.