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)

The draft Royal Decree-law on housing (July 2026, pending parliamentary ratification in September) includes the application of 21% VAT to tourist rentals. If ratified, VUT owners who are tax residents would also have VAT obligations in addition to IRPF. See the related entity on the Housing Decree to follow developments.