Tourist properties in Spain
A TOURIST PROPERTY
what is it?
A tourist property is an apartment or house specifically intended for short-term rental to holidaymakers. It is often part of a resort or complex with services such as reception, cleaning, etc.
The purpose of this type of real estate is clear: to invest with returns through rental.
You can also use the property yourself, but official residency or permanent living is not allowed.
What are the advantages of a tourist property?
21% VAT on a tourist property, here’s how it works!
When buying a tourist property, you pay 21% VAT. That may seem high, but you can reclaim the VAT if you meet the requirements.
- You register as VAT-liable in Spain (NIF + registration with Hacienda).
- You rent out the property for at least 1 month per year to a minimum of 2 different tenants.
- Hotel-like services are provided (cleaning, linens, reception or key management).
- You file VAT returns in which you declare your income and expenses.
Full private use is excluded. Permanent residence as well. Limited personal use is often possible through the operator, and this can vary per project.
The VAT refund has a review period of 10 years. Each year you rent out the property, 1/10 of the reclaimed VAT becomes definitively yours.
If you sell the property after only 5 years or the tourist operation ends, you must pay back 5/10.
If you keep the property in operation for 10 years or more, you have fully secured the VAT refund.
Frequently Asked Questions
Do I always have to pay 21% VAT on a tourist property?
Yes, unless the property is converted into residential use.
Can I reclaim VAT if I stay in the property myself?
Yes, but only if you also meet the rental requirements (min. 1 month, 2 tenants, services). Full private use excludes VAT recovery.
What happens after 10 years?
After 10 years, no VAT adjustment is required. By then, the VAT is fully secured. If you sell the property afterwards, you sell it again with VAT.
What is the difference with ITP?
ITP is the transfer tax on resale properties (6–10%) and generally applies to residential real estate.
Do I need to set up a company to reclaim VAT?
No. Both private individuals and companies can register as VAT-liable.