Tax-resident property owners in Spain — IRPF and VUT rental income

Property owners who are tax residents in Spain and receive income from Tourist Use Properties (VUT) must declare it in their Personal Income Tax (IRPF) as property capital income.

Tax rate and taxable base

VUT property capital income is taxed at the progressive IRPF rates, which in 2025 range from 19% (up to €12,450) to 47% (above €300,000), plus the applicable regional rate. Andalusia has one of the most favourable regional rates in Spain.

Key difference: VUT vs. residential rental

This is the most fiscally significant point for VUT owners who are tax residents in Spain:

• Long-term residential rental (minimum 5-year contract for the tenant's permanent residence) benefits from a 60% reduction on net income in the IRPF.
• VUT income does not qualify for this 60% reduction. It is taxed on the full net income.
• Seasonal rental (temporada) also does not qualify for the 60% reduction.

Deductible expenses

Net income is calculated by deducting from gross income the expenses necessary to obtain it, including:

• Interest and financing costs of the property (mortgage).
• Local property tax (IBI).
• Maintenance and repair costs.
• Property insurance.
• Platform and agency commissions.
• Utility costs (proportional to rental periods).
• Property depreciation (3% of the construction value).
• Cleaning and laundry costs between stays.

Important: expenses are only deductible in proportion to the periods during which the property is actually rented. During periods when it is at the owner's disposal without being rented, an imputed income is calculated (1.1% or 2% of the cadastral value) but expenses are not fully deductible in the same proportion.

Form 179: automatic platform reporting

Intermediary platforms (Airbnb, Booking, HomeAway, etc.) are required to report rental data to the AEAT quarterly using Form 179, which includes: the owner's details, income received, number of rental days and the property's cadastral reference. The AEAT cross-references Form 179 data with IRPF returns. Income obtained through platforms cannot be concealed: it is reported automatically.

Impact of the draft Housing Decree (pending)

VAT on short-term tourist rentals (update October 2026): Royal Decree-law 29/2026 provides that, from 1 December 2026, rentals of furnished dwellings to the same guest for 30 nights or fewer are subject to 10% VAT, unless the dwelling is the owner’s habitual residence. The decree is in force provisionally and must be validated by the Diputación Permanente of the Congress (vote expected 12 November 2026); if not validated, the change will not apply. The 21% rate mentioned in the July 2026 draft was never adopted.