Countdown for VAT on tourist apartments, a "showcase measure" that 'gives back' to the owners

All tourist apartments will begin to pay 10% VAT starting next December 1. The Government included this measure in one of the two Maricarmen decrees published in the BOE that are pending approval in the Permanent Deputation of the Congress of Deputies with the purpose of bringing its tax treatment closer to that of other accommodation activities. Moncloa believes that this formula can be a way to combat the proliferation of tourist apartments that have flooded the center of large Spanish cities and that it can discourage owners from putting their homes on the short-term rental market to the detriment of long-term rentals.

The reality, however, may be very different and the measure, far from discouraging them, could have a very limited effect on landlords because what they pay on the one hand, they deduct on the other. Until now, tourist apartments without hospitality services such as cleaning during the stay, laundry or catering, were exempt from VAT; Consequently, the owners did not deduct any expenses associated with that activity. In just over a month and a half, both things will change and the landlord of a tourist apartment will have to pay VAT but will also be able to deduct what is paid for expenses such as cleaning, painting or plumbing in the apartment in question. Depending on the city and the price at which you rent the home, the result may end up being what you eat for what you serve, that is, what you pay in VAT ends up being returned in tax deductions, "and therefore it will compensate you to continue renting," says Blanca Llopart de Mercader, lawyer and partner at the CIM Tax & Legal firm. Or put another way, the measure will not meet the objective that the Executive seems to seek.

José María Mollinedo, general secretary of the Gestha Treasury Technicians union, elaborates on this issue and points out that "there are essential elements in the activity subject to VAT such as electricity, cleaning (as long as a company is hired and not a person), renovations, furniture, painting or plumbing that can now be deducted." In his opinion, in places where incomes are higher, VAT taxation will continue to be higher than the total amounts that an owner can deduct because these maintenance expenses, although frequent, are not frequent enough to equal the other item. In any case, he does not believe that this will discourage the owners of tourist apartments from putting them on the market because he believes that it continues to compensate them.

Especially if the owner passes the tax on to the price that the tourist will have to bear, a scenario that is considered more likely in the sector. In that case, the owner of the property will transfer the amount of VAT to the visitor, so that his margin will remain the same as until now and travelers will pay more for their stay. "You might think that demand could suffer due to the increase in prices, but it would have to be greatly reduced to end up turning the market around and for landlords to be compensated more for long-term rentals than for short-term rentals," shares Mollinedo.

For Blanca Llopart, the measure is a "showcase policy" at a key moment like the current one, where the housing access crisis has triggered the electoral race towards the polls on November 29. When it comes to landing it, he does not believe that the initiative serves to discourage owners and points out that the key lies in the owner's final decision of whether or not to pass on the VAT to the tenants. "If you don't do it, you lose a competitive advantage," so he is inclined to think that they will end up doing it. "It is a very attractive proposal, but its impact in real numbers will not be as much as it is intended to make us see. In addition to travelers and tourists, the most affected will be the owners of tourist apartments who are not professionalized, individuals, who will bear more administrative burden to get their bills settled."