A holiday let in the Canaries and the IGIC, step by step: the census form, the 7 %, the small-business regime and the platform's commission

Three owners let a flat in Fuerteventura through the same platform and owe three different things to the Canary tax agency. A Corralejo resident with one flat and modest takings charges no IGIC at all. A Düsseldorf owner whose Costa Calma apartment is cleaned and handed over by a local agency charges 7 % from the first night. A Caleta de Fuste owner whose unit is run by the complex's operator for a fixed monthly sum charges nothing, files nothing, and writes two words on every invoice. The three answers come from the same two laws, read by the Canary agency in a series of binding rulings that runs to 2026, and this note sets them out in the order an owner meets them: why a holiday let is never exempt, the census form that must go in before the first guest, the small-business regime and who is left out of it, the non-resident's position, the quarterly and annual returns, the invoice to the guest, and whose tax the platform's commission is. The tourist registration itself is another file, covered in our note on the holiday-let rules of 2026.

Why a holiday let is never exempt

The IGIC exempts the letting of homes. The Canary consolidated text frees from the tax the leases of edificios o partes de los mismos destinados exclusivamente a viviendas, buildings or parts of buildings used exclusively as dwellings, with their garages, annexes and furniture (Decreto Legislativo 1/2025, article 21.b). Two paragraphs later the same article closes the door on holiday lets in its own words: the exemption Tampoco será de aplicación a cualquier supuesto de cesión temporal de uso de la totalidad o parte de una vivienda amueblada y equipada en condiciones de uso inmediato, comercializada o promocionada en canales de oferta turística y realizada con finalidad lucrativa u onerosa, does not apply either to any temporary cession of the use of all or part of a furnished and equipped dwelling in a condition for immediate use, marketed or promoted through tourist-offer channels and carried out for profit or for a consideration. That is the legal definition of a holiday let, and it needs no hotel service, no reception desk and no staff: a flat on a booking site with the keys in a lockbox is inside it.

The owner is a business the moment the flat is offered. The state law counts as businesses, in every case, those who exploit an asset to obtain continuing income, and adds that tendrán dicha consideración los arrendadores de bienes, lessors of property have that status (Ley 20/1991, article 5.4.a). The service is taxed where the flat stands, because the law locates in the islands El arrendamiento o cesión de uso por cualquier título de dichos bienes, incluidas las viviendas amuebladas, the letting or cession of use by any title of property situated here, furnished dwellings included (article 17.Tres.Uno.1.a), whatever the owner's residence and whatever the guest's. The rate is the general one, El tipo general en el impuesto general indirecto canario es el 7 %, the general rate of the IGIC is 7 % (Decreto Legislativo 1/2025, article 32.1, in the wording in force since 1 January 2026); accommodation appears on none of the reduced lists. And the base is the whole price: La base imponible del impuesto estará constituida por el importe total de la contraprestación de las operaciones sujetas al mismo, the taxable base is the total consideration of the taxed operations (Ley 20/1991, article 22.1), so a cleaning fee or a late check-in charge billed to the guest carries the 7 % with the nights.

The Canary agency said all of this again in February 2026 to an owner of a flat in Tenerife who let it through a booking site with no employees, no hotel services and only the cleaning at the start and end of each stay. The service is subject to IGIC, its binding ruling says, con independencia de que se presten o no servicios propios de la industria hotelera, o si dispone o no de medios organizativos propios o contrate los mismos, regardless of whether hotel-type services are provided and of whether the owner has organisational means of their own or contracts them, and the article 21 exemption does not apply (consulta vinculante 2299, 6 February 2026). What decides whether that owner actually charges the 7 % is not the flat but the regime of the next section.

Before the first guest: the census form

The first paper is not a tax return but a census declaration, the Modelo 400, and it goes in before the activity starts: the regulation says the declaration of commencement deberá presentarse con anterioridad al inicio de la realización habitual de las entregas de bienes o prestaciones de servicios correspondientes a sus actividades empresariales o profesionales, must be filed before the habitual supply of goods or services of the business begins (Decreto 268/2011, article 133.3). It tells the agency who you are, where the flat is, which regime you are in and whether you renounce it; it is also where a non-resident owner declares the activity as a business not established in the islands. The agency's July 2026 ruling to an owner who leased two homes to a company that would run them as holiday lets spells out that a private lessor files it en todo caso, in every case, unless the only lets are exempt dwelling leases taxed as property income in the owner's income tax, and that a holiday let is never one of those (consulta vinculante 2327, 29 July 2026). An individual whose only activity is letting property and whose turnover did not exceed €50,000 the year before may file it on paper, in person at the agency's Puerto del Rosario office or by registered post; everybody else files it online. The tourist registration number and the responsible declaration under the Canary Act of 2025 are a separate procedure with a separate office, and they do not replace the 400.

The small-business regime decides whether you charge anything

The regime the law calls régimen especial del pequeño empresario o profesional, the special regime for small businesses, is why the Corralejo owner charges no IGIC. It covers los sujetos pasivos personas físicas establecidos en el territorio de aplicación del impuesto, cuyo volumen total de operaciones realizadas durante el año natural anterior, en el conjunto de sus actividades empresariales o profesionales, no hubiera excedido de 30.000 euros, individual taxable persons established in the territory whose total turnover in the previous calendar year, across all their business activities, did not exceed €30,000 (Decreto Legislativo 1/2025, article 89.1), and from 1 January 2027 the same sentence reads €50,000, the figure the Canary government advanced in April 2026 with a one-month window, July 2026, for those with 2025 takings between the two thresholds to opt in. Inside the regime, the owner's supplies estarán exentas del Impuesto General Indirecto Canario, are exempt from the IGIC (article 90.1): no 7 % on the nights, no quarterly return, and no deduction of the IGIC paid on the cleaner, the agency or the new sofa. The invoice still goes out, and it must carry the words the law prescribes: La factura deberá contener la expresión "exención franquicia fiscal", the invoice must carry the expression "exención franquicia fiscal" (article 91.d). In January the owner files the annual Modelo 425 stating the year's turnover, which is how the agency knows whether the regime continues.

Three features of the regime trip owners up. It is automatic, so an owner who does not want it must say so: the renunciation is written in the Modelo 400, or happens by conduct, because the law treats as a tacit renunciation the filing, on time, of the first quarterly return of the year or of the first return due after starting (article 89.2), and a renunciation binds for three years. The yardstick is last year's turnover across every activity the owner has, not this year's and not the flat's alone, so a self-employed plumber who adds a holiday let adds its takings to the plumbing; an activity that started mid-year is scaled up to twelve months, and a crossing of the threshold expels the owner on 1 January of the following year. And it is for the established only: the words establecidos en el territorio de aplicación del impuesto are the ones the agency has been reading most strictly, as the next section shows. The regime's full mechanics, including what the exemption costs in lost deductions, are in our note on the REPEP and the €50,000 threshold.

The non-resident owner is not established, and charges 7 % from the first night

Until 2022 the Canary agency held that any let property in the islands was a permanent establishment of its owner, so a German or British owner was "established" through the flat and could sit in the small-business regime like a neighbour from Corralejo. That reading is gone. In April 2026 the agency answered an owner resident in Germany whose holiday flat was run by a professional in the Canaries who handled the keys, the maintenance, the cleaning and the invoices: the owner is a business and the service is taxed, Dado que no se encuentra establecido en Canarias no puede estar incluido en el REPEP, since the owner is not established in the Canaries they cannot be in the REPEP (consulta vinculante 2310, 17 April 2026). The reasoning is in two steps. A permanent establishment needs a structure of the owner's own human and material means, and a flat managed by a contracted agency has none: the agency applies the Court of Justice's Titanium judgment of 2021 to the IGIC in so many words. And the state law itself changed on 1 January 2023 to say, in its reverse-charge rule, that the rule does not apply Cuando se trate de prestaciones de servicios de arrendamientos de bienes inmuebles que estén sujetas y no exentas del Impuesto, to services of letting immovable property that are subject to the tax and not exempt (Ley 20/1991, article 19.1.2.º.a), which the agency reads as the legislator admitting that a lessor of a Canary flat can be a non-established business. Its own guidance page on the regime now says it in one line: since 1 January 2024 non-established individuals cannot be in the regime, and a Peninsula resident letting a flat in the islands deberá darse de alta en el censo del IGIC como empresario o profesional no establecido en Canarias, y proceder al ingreso de las cuotas devengadas a través de autoliquidaciones periódicas, must register in the IGIC census as a business not established in the Canaries and pay the tax accrued through periodic returns. An owner in Düsseldorf or Manchester is in the same position as one in Madrid.

So the non-resident owner charges 7 % on every stay from the first, files the Modelo 400 as a non-established business before the first guest, and files the quarterly Modelo 420 under the regulation's own heading for empresarios o profesionales no establecidos en el territorio de aplicación del Impuesto General Indirecto Canario que realicen habitualmente entregas de bienes o prestaciones de servicios sujetas y no exentas al Impuesto, por las que no se produzca la inversión del sujeto pasivo, non-established businesses that habitually make taxed, non-exempt supplies on which the reverse charge does not operate (Decreto 268/2011, article 57.1.c). The same article lets those returns carry the deductions: the IGIC on the local agency's management fee, on the cleaning company and on the repairs comes off the 7 % collected, which is the one consolation of being outside the regime. Neither the state law's list of the taxable person's duties nor the Canary text names a fiscal representative for the IGIC, unlike the VAT rule for owners established outside the Union, but the quarterly calendar does not wait for a flight, and the agency's electronic office needs a certificate or a representative with one.

One non-resident owner files nothing at all. Where the apartment sits in a tourist complex that can only be run as a single unit and the owner has ceded it to the complex's operator for a fixed monthly sum, the agency ruled in October 2025 that the contract is not a lease but an atypical cession of exploitation, that the letting exception to the reverse charge therefore does not apply, and that the tax is self-assessed by the operator: the owner is not established, cannot be in the small-business regime, and No tiene obligación de presentar el modelo 400 de declaración censal, ni obligación de presentar autoliquidaciones periódicas, ni presentar el modelo 415, has no duty to file the census form, the periodic returns or the Modelo 415 of operations with third parties; the owner's only duty is an invoice to the operator without IGIC that carries the words inversión del sujeto pasivo (consulta vinculante 2278, 3 October 2025). That is the Caleta de Fuste owner of the opening paragraph. The ruling turns on the contract: an owner who lets the same apartment to the operator under an ordinary lease, or who lets it to guests directly, is back in the previous paragraph.

The quarterly 420, the annual 425 and the invoice to the guest

An owner outside the regime, resident or not, files the Modelo 420 four times a year: en los primeros veinte días del mes natural siguiente a la finalización del periodo de liquidación trimestral, in the first twenty days of the calendar month after the end of the quarter, except January, when the fourth quarter may be filed through the whole month, so 1–20 April, 1–20 July, 1–20 October and 1–31 January; a payment by direct debit shortens each window to the first fifteen days, twenty in January. The annual summary, the Modelo 425, goes in during January with the last return of the year; an owner in the small-business regime files only the 425, as the statement of turnover that keeps or ends the exemption. Both are filed online, on paper only for the individuals the previous section describes.

Every stay needs an invoice, because the law obliges taxable persons to Expedir y entregar facturas de las operaciones en que intervienen, issue and deliver invoices for the operations they take part in (Ley 20/1991, article 59.1.b), under the state invoicing regulation, which applies to the IGIC by its own second additional provision. Up to a modest amount it can be a simplified invoice without the guest's details: the regulation allows one Cuando su importe no exceda de 400 euros, Impuesto sobre el Valor Añadido incluido, when its amount does not exceed €400, tax included (Real Decreto 1619/2012, article 4.1.a); above that, a full invoice that names the guest and gives their address, with the rate and the quota shown separately (article 6). A platform or an agency that issues the invoices in the owner's name does it under a prior written agreement and in a series of its own. The owner keeps a register of invoices issued and one of invoices received (Decreto 268/2011, article 49), and keeps the invoices themselves for the four years the agency has to check them.

The platform's commission: whose IGIC it is

The commission a booking platform takes from the owner is a service of intermediation in the letting of property, and since 1 January 2023 the Canary rule on it is the opposite of the rule for almost everything else an island business buys from abroad. The reverse charge, which normally makes the island customer the taxable person when the supplier is not established here, does not apply Cuando se trate de prestaciones de servicios de intermediación en el arrendamiento de bienes inmuebles, to services of intermediation in the letting of immovable property (Ley 20/1991, article 19.1.2.º.a). The agency drew the consequence in January 2026 for a Canary resident whose platform invoiced its commission without IGIC and with the words "inversión del sujeto pasivo" on it: the intermediation is located where the flat is, so it is subject to the IGIC wherever the platform sits, and no invirtiéndose la condición de sujeto pasivo, siendo la entidad intermediaria no establecida la obligada a declarar como sujeto pasivo la cuota del IGIC devengada, the taxable person is not reversed, and the non-established intermediary is the one obliged to declare the IGIC accrued as taxable person (consulta vinculante 2298, 22 January 2026). The platform must charge the 7 % on its commission and show it on its invoice; the owner does not self-assess it on the 420, and the ruling adds that a dispute over an invoice that should carry the tax and does not is a tax matter for the Canary economic-administrative board.

For the owner the practical rules are three. An invoice from the platform marked with the reverse charge is not the owner's tax to declare, and nothing is deductible from it. If the platform does charge IGIC, an owner outside the small-business regime deducts it on the 420; an owner inside the regime bears it as a cost. And the same reasoning covers the local cleaner and the management agency, whose services relate to the flat and carry Canary IGIC on their own invoices. The rule for the rest of what a business buys from outside the islands, from advertising to software, is the ordinary reverse charge, which we describe in our note on paying foreign suppliers.

The income tax side, and what the decree would have changed and now changes again

The IGIC is the smaller of the two taxes on a holiday let. The non-resident owner declares the rent on the Modelo 210 at 19 % or 24 % depending on the country of residence, once a year from the 2026 tax year instead of quarter by quarter, and declares an imputed income for the days the flat stood empty; the mechanics, the deductible costs for EU owners and the gap between an EU and a non-EU owner on the same rent are in our note on the non-resident property tax. A resident owner declares the net rent in the IRPF without the reduction for housing leases, which the law reserves for a dwelling let as the tenant's permanent home, as our note on rental income reductions explains. And every January the platform files the Modelo 238 under DAC7, property by property and quarter by quarter, with the sums it paid the owner, which is the figure the agencies can set against the 210, the IRPF and the 420.

The mainland change that filled the news in October never reached the islands. Real Decreto-ley 26/2026, in force for one day, would have rewritten the VAT exemption so that lets of furnished dwellings lost it when Su duración a favor de un mismo arrendatario no supere las 30 noches, their duration for the same tenant did not exceed 30 nights, from 1 December 2026 (article 7); the Congress repealed the decree on 2 October, as our colleagues at Olga Caballero Abogados set out in their note on the October decree, and on 8 October Real Decreto-ley 29/2026 wrote the same rule again, with the same date of 1 December 2026 and the same article 7, pending the vote of the Permanent Deputation of the dissolved Congress within thirty days of its publication on 7 October. The Canary rule never depended on either: holiday lets have been outside the IGIC exemption by the text of the Canary law, with no night count, and they still are.

What our advisory does

A holiday let that has been taking bookings for two seasons with no Modelo 400, a non-resident owner who was told the flat put them in the small-business regime, a platform invoice marked with a reverse charge that nobody declared: these are the files that reach our desks in Caleta de Fuste and Costa Calma. The registrations, the IGIC returns and summaries and the representation before both agencies are part of our tax advisory; the non-resident tax and the lease contracts of an individual owner belong to our advisory for individuals. Bring the platform statements and whatever has been filed so far, or request an appointment, and we will tell you which of the three owners you are and what each quarter should look like from now on.

Common questions

I let my flat through a platform for a few weeks a year. Am I really a business for the IGIC?

Yes. Lessors of property are businesses by the letter of the state law, and the Canary text puts a furnished flat marketed through tourist channels outside the housing exemption whatever the number of weeks. Whether you charge the 7 % depends on the small-business regime and on where you are established, not on the calendar.

I live in Corralejo and the flat brings in €18,000 a year. Do I charge IGIC?

Not while you are in the small-business regime: your stays are exempt, your invoices say "exención franquicia fiscal", and you file the annual 425 in January. You lose the regime on 1 January after a year in which all your activities together exceeded the threshold, €30,000 for 2026 and €50,000 from 2027, and you lose it by conduct if you file a quarterly 420 on time.

I live in Germany and a local agency manages everything. Can I use the small-business regime?

No. The Canary agency's binding rulings of 2023, 2025 and 2026 hold that a flat run through a contracted agency is not a permanent establishment of its owner, and since 2024 the regime is closed to non-established individuals. You charge 7 % from the first night, register as a non-established business and file the 420 each quarter, deducting the IGIC the agency and the cleaner charge you.

The platform's invoice for its commission says "inversión del sujeto pasivo". Do I declare that IGIC?

No. Since 2023 intermediation in letting is excluded from the reverse charge, and the agency ruled in January 2026 that the platform, not the owner, is the taxable person for its commission on a Canary flat. Keep the invoice, declare nothing on it, and deduct nothing from it.

My apartment is in a complex run by one operator and I receive a fixed sum each month. Do I file the 400 and the 420?

Not if the contract is a cession of the unit's exploitation to the operator, as in the agency's October 2025 ruling: the operator self-assesses the IGIC, and you issue invoices without tax marked "inversión del sujeto pasivo". If you let the apartment yourself or under an ordinary lease, the answer changes, so the contract is the first thing to read.

Facts verified in October 2026 (Ley 20/1991, articles 5, 17, 19, 20, 22 and 59, in the text the BOE consolidates as of 17 December 2025; Decreto Legislativo 1/2025, articles 21, 32, 89, 90 and 91, with the wording of article 89.1 in force from 1 January 2027 under Decreto-ley 3/2026; Decreto 268/2011, articles 49, 57 and 133; Real Decreto 1619/2012, articles 4 and 6; Real Decreto-ley 26/2026, article 7, repealed on 2 October 2026; Real Decreto-ley 29/2026, article 7, in force from 8 October 2026 and awaiting convalidation on 21 October 2026; the Canary tax agency's binding rulings 2176, 2195, 2278, 2298, 2299, 2310 and 2327 and its pages on the Modelos 400, 420 and 425 and on the small-business regime, as read on 7 October 2026). The thresholds, the forms and the filing windows are the ones in force on the date above; the contract, the owner's residence and last year's turnover decide which of the three positions is yours.