New national rules for temporary lets and 10% VAT on short stays await a vote

What happened

Spain’s government approved Royal Decree-law 29/2026 on 6 October 2026. It was published in the BOE, the official gazette, on 7 October and most of it has applied since 8 October. It follows two housing decree-laws, 26/2026 and 27/2026, which Congress voted down on 2 October. The decree is national law, so it applies in Mallorca as everywhere else in Spain.

Temporary and room lets

The decree rewrites the tenancy law (the LAU) for lets that are not the tenant’s main home. The main points for owners and tenants:

• A temporary let must state a real reason the tenant can prove for being away from their main home.
• It must last more than 31 days and, as a rule, no more than 12 months.
• A temporary let that runs past 12 months without justification, or more than two back-to-back contracts between the same people for the same home, counts as a main-home lease from the first contract.
• Renting rooms in a shared home now falls under the same rules, and the rents for all the rooms together cannot be more than the rent for the whole home.
• Yearly rent rises during a temporary let are capped by the official IRAV index.

For a buyer who plans to let a Mallorca home for a few months a year, this matters. A medium-term let to people who simply want a long holiday or a trial stay is harder to fit into the new rules, and a contract that fails the test can become a main-home lease with much stronger rights for the tenant. Our guide to renting long-term explains the lease types.

VAT on short stays from 1 December

From 1 December 2026 the decree changes the VAT law. Letting a furnished home stays exempt from VAT only if the owner offers no hotel-type services and the stay is longer than 30 nights. Shorter stays in a home that is not the owner’s main home, and lets with hotel-type services, pay VAT at the reduced 10% rate. That covers most holiday lets. How this works for an owner who lets their own main home for part of the year is a question for a tax adviser.

The decree also lets town halls add an IBI (property tax) surcharge on homes used for tourist lets, but only in officially declared stressed housing areas. No such area had been declared in the Balearic Islands when the decree was published. Holiday letting in Mallorca also needs a registration under Balearic rules: see holiday rental licences and taxes for owners.

What is still uncertain

A decree-law applies at once but must be approved by Congress within 30 days, counted in working days. Parliament was dissolved on 6 October for the general election of 29 November, so the vote falls to the standing committee (Diputación Permanente). No date for the vote had been set when the decree was published. If the committee rejects the decree, its changes stop applying from then on, as happened with the two earlier decree-laws. Check the position before you sign a let or price a holiday-let investment.

Areas in this article

Palma