Housing employees in Madrid for one to three months: seven criteria before you sign
Housing someone in Madrid for six weeks is neither a hotel booking nor a tenancy. It sits between the two, and that middle ground has its own tax rules that nobody explains until the invoice lands.
The most counter-intuitive one: an invoice with no VAT costs your company more than one with 10% VAT on it. And it leaves your assignee with a tax filing to complete personally, in a country that is not theirs.
This guide walks through the seven criteria that actually change the cost and the risk, each with the Spanish legislation behind it so you can verify it rather than take our word for it.
Disclosure: this guide is published by Nestic, which operates mid-term apartments in Madrid. The criteria are general and apply to any provider. Where we give data on other operators, it is verified from their public sources with the date of consultation. This is general information and does not replace advice from a tax professional.
- Which legal form you are actually signing
Everything else follows from this. There are two possible structures and they look alike from the outside: a seasonal lease (arrendamiento de temporada) or an accommodation service with hospitality services. The first is a tenancy; the second is a supply of services. They differ in VAT, in transfer tax, in who is liable and in what can be claimed from you.
The dividing line is not length or price. It is the services. If the provider supplies services characteristic of the hotel industry during the stay — periodic cleaning, changes of bed linen and towels — it is an accommodation service. If they simply hand over the keys to a furnished flat and disappear until check-out, it is a tenancy.
Running a washing machine and handing the flat over clean on day one does not make it hospitality. Doing it every week does.
What to ask: "Is this a seasonal lease or an accommodation service? Which services do you provide during the stay, and how often?" A vague answer here means the next two criteria will be vague too.
- VAT: no VAT on the invoice is not a saving
This is the expensive misreading. A seasonal lease without hotel services is VAT-exempt. That looks good for your budget and it is the opposite: with no input VAT, there is nothing to recover. You pay 100 and it costs you 100.
Where hospitality services exist, the operation stops being exempt and is taxed at 10%. That amount enters your books, and it is recoverable, subject to one condition the statute puts like this:
«No podrán ser objeto de deducción […] 6.º Los servicios de desplazamiento o viajes, hostelería y restauración, salvo que el importe de los mismos tuviera la consideración de gasto fiscalmente deducible a efectos del Impuesto sobre la Renta de las Personas Físicas o del Impuesto sobre Sociedades.»
"Input VAT may not be deducted on […] travel, hospitality and restaurant services, unless the amount qualifies as a tax-deductible expense for personal income tax or corporate income tax purposes."
Article 96.Uno.6º, Law 37/1992 on Value Added Tax:
https://www.boe.es/buscar/act.php?id=BOE-A-1992-28740
Accommodation for an employee on a work assignment is a deductible expense for Spanish corporate income tax. The exception applies, and the VAT is recoverable.
The arithmetic, in round numbers
A two-month assignment at €3,000 per month:
No VAT (exempt)
Net: €6,000
VAT on invoice: €0
Cash out: €6,000
VAT recoverable: €0
Real cost to the company: €6,000
10% VAT
Net: €6,000
VAT on invoice: €600
Cash out: €6,600
VAT recoverable: €600
Real cost to the company: €6,000
At best it is a draw. Criterion 3 breaks the tie.
What to ask: "Does your invoice carry VAT, and at what rate?" A clear answer of 10% suggests the provider has its tax position settled. "We don't charge VAT" should send you straight to the next question.
- Transfer tax: the one your employee ends up paying
This is what produces the awkward phone call three months later, and it is why criterion 2 ends in a draw rather than a win.
In the Madrid region, residential tenancies "for stable and permanent use" are exempt from transfer tax (Impuesto sobre Transmisiones Patrimoniales, ITP). But a seasonal contract is not a residential tenancy: it falls under article 3 of the Urban Leases Act, not article 2. It sits outside that exemption and the tax applies. And in tenancies the taxable person is the tenant: the person renting files it, on form 600.
If your assignee signed the contract personally, the filing is theirs.
Now the other side, which almost nobody mentions:
«No estarán sujetas al concepto "transmisiones patrimoniales onerosas" […] las operaciones […] cuando constituyan entregas de bienes o prestaciones de servicios sujetas al Impuesto sobre el Valor Añadido. No obstante, quedarán sujetos a dicho concepto impositivo las entregas o arrendamientos de bienes inmuebles […] cuando gocen de exención en el Impuesto sobre el Valor Añadido.»
"Transactions are not subject to transfer tax where they constitute supplies of goods or services subject to VAT. However, supplies or leases of real property remain subject to it where they are VAT-exempt."
Article 7.5, Royal Legislative Decree 1/1993, consolidated ITP and stamp duty act:
https://www.boe.es/buscar/act.php?id=BOE-A-1993-25359
Read it twice, because it closes the loop:
A service subject to VAT → no transfer tax.
A VAT-exempt lease → transfer tax applies, filed by the tenant.
The full picture
Seasonal lease, no services:
VAT: Exempt, nothing to recover.
Transfer tax: Applies.
Who files it: Your assignee, on form 600.
Accommodation service:
VAT: 10%, recoverable.
Transfer tax: Does not apply.
Who files it: Nobody.
The invoice with no VAT was never cheaper. It cost the same and carried a hidden tax and a filing obligation, landing on the person least equipped to deal with them.
What to ask: "Does this contract trigger transfer tax, and who files it?" If the provider cannot answer, assume the filing ends up with your assignee.
- Who signs: the company or the employee
It looks administrative and it is a liability decision. If the employee signs personally, the company has no control over the contract, does not appear on the invoice and has no standing if something goes wrong. Meanwhile the employee takes on a personal obligation abroad, with a deposit in their own name.
Many companies with a formal mobility policy prohibit this outright, and reasonably so: the contractual relationship belongs where the money and the decision sit.
It also feeds back into criterion 2. If the company is the contracting party, the invoice is in the company's name from the start and the input VAT is the company's, without the accounting gymnastics of reimbursing an employee who fronted the payment on a personal card.
What to ask: "Can the company sign as the contracting party?" And for several assignees: "One framework agreement, or one contract per apartment?"
- What the price covers, and what arrives later
Provider comparisons usually fall apart here. Two similar monthly rates can produce very different invoices depending on what sits inside and what is billed separately.
The list worth pinning down in writing before signing:
Utilities (electricity, water, gas): included, or capped with the excess passed on?
Wi-Fi: included, and at what speed? For someone working from the flat this is not a detail.
Cleaning: included and how often, or on request at a cost?
Bed linen and towels: is periodic replacement included?
Deposit: amount and refund timeline.
Early departure: projects shorten and get cancelled. What happens if the assignee leaves three weeks early?
Pay particular attention to cleaning. Beyond comfort, it is the service that determines whether the arrangement is hospitality or tenancy, and with it criteria 2 and 3 entirely. A provider offering cleaning "on request" and one including weekly cleaning are not in the same tax category.
To make that concrete with verifiable data: Blueground states on its Madrid page a minimum stay of 30 nights and lists cleaning as "on-demand", consulted on 1 September 2026.
Blueground:
https://www.theblueground.com/furnished-apartments-madrid-spain
- The workspace: over six weeks, it is not an extra
For a weekend stay the dining table is irrelevant. On a six-week assignment your employee will work from that apartment for a substantial share of the time, and the chair they sit in becomes a question of productivity and of duty of care.
It is the criterion most often skipped in comparisons, because it does not show up in the price. It is also the one people notice most from week two onwards.
Specifically, what to look for:
A real desk, not the dining table. Proper height and room for two screens.
An ergonomic chair, with back support and adjustment. Not a dining chair.
An external monitor: two months on a 13-inch laptop has consequences.
Light and power sockets at the desk, not across the room.
Stable connectivity, with a speed you can verify.
It is worth checking against photographs of the actual workspace rather than the general description. In our review of Blueground's Madrid page on 1 September 2026 we found no mention of a desk, ergonomic chair or monitor. In Nestic's case, the equipped workspace — height-adjustable desk, ergonomic chair and monitor — is present in all 29 apartments.
What to ask: "Can you send a photo of the workspace in that specific apartment?" The answer, or the absence of one, tells you something.
- Registration, licensing and where the law currently stands
Ask whether the property is registered and under what number, and keep the answer in writing. This is not bureaucracy: it separates accommodation that will not cause you problems from accommodation that could be shut down halfway through your assignee's stay.
A warning is needed here, because a lot of outdated information is circulating. During 2025 Spain introduced a national rental registry tied to a digital single window, and much of the published material on the subject — and more than one sales deck — still rests on it. The Supreme Court annulled it in May 2026, on the grounds that the central government lacked competence, since it overlapped with the regional registries.
What remains in force, and what you should therefore ask about:
Regional and municipal rules in Madrid, unaffected by that ruling.
The licence or registration applicable to the provider's specific activity.
The property's certificate of habitability (cédula de habitabilidad).
What to ask: "Under which legal form does this property operate, and what is its registration number?" A serious provider answers that in an email, without hedging.
How the operators compare today
Verifiable data only, with dates and sources. Anything we could not confirm is shown as such: a declared gap is more useful than an invented figure.
Blueground
Verified: 1 Sep 2026, own site.
Minimum stay: 30 nights.
Corporate offering: Yes, "Blueground for Business".
Cleaning: "On-demand".
Workspace: No mention on its Madrid page.
Ukio
Verified: 1 Sep 2026.
Minimum stay: Not verifiable.
Corporate offering: Not verifiable.
Cleaning: Not verifiable.
Workspace: Not verifiable.
Nestic
Verified: Operator-supplied.
Minimum stay: —
Corporate offering: Yes, company signs the contract.
Cleaning: Weekly, included.
Workspace: In all 29 apartments.
Methodology note: Blueground data was taken from its public Madrid page on 1 September 2026. Ukio returned an error to every automated request we made that day, so we were unable to verify any of its data and preferred not to estimate. Nestic's data is supplied by the company itself. Prices and terms change: always confirm with each provider before deciding.
What Nestic does not have
For consistency with the above, two limitations of our own:
No client portal. Stays are tracked through direct contact, not a dashboard you can consult yourself.
No 30 or 60-day payment terms. Billing is monthly, or a single payment for stays of one month or less, by card, bank transfer or direct debit.
If your procurement policy requires a supplier portal and 60-day terms, better to know that before the first meeting than after it.
Frequently asked questions
Does accommodation for an assignee carry VAT in Spain?
It depends what is contracted. A seasonal lease without hotel services is exempt. Where the provider supplies services characteristic of the hotel industry, such as periodic cleaning and linen changes, the supply is taxed at 10%. The difference matters because exempt amounts cannot be recovered and the 10% can, where the expense is deductible for corporate income tax.
Can a company recover VAT on employee accommodation?
Yes, where the amount qualifies as a tax-deductible expense for personal or corporate income tax. Article 96.Uno.6º of the Spanish VAT Act excludes deduction of hospitality costs precisely except in that case. Accommodation for an employee on a work assignment falls within the exception.
Who pays transfer tax on a seasonal lease in Spain?
The tenant, using form 600. If your employee signed personally, the filing is theirs. Where the arrangement is a supply of services subject to VAT there is no transfer tax: article 7.5 of the consolidated transfer tax act treats VAT-liable transactions as outside its scope, while keeping VAT-exempt property leases within it.
Can the company sign instead of the employee?
That depends on the provider, and it is worth insisting on. It places the contract and the invoice with the company, avoids the employee taking on personal obligations abroad, and simplifies recovery of input VAT. Ask in the first conversation, because not every operator allows it.
What is the typical minimum stay in Madrid?
It varies by operator. Blueground publishes a 30-night minimum on its Madrid page, consulted on 1 September 2026. Others work in weeks or in whole months. It is one of the first things to pin down, because it shapes any price comparison.
Does Spain's national rental registry still exist?
Not in its original form. In May 2026 the Supreme Court annulled the national rental registry on competence grounds, because it overlapped with the regional registries. Madrid's regional and municipal rules were unaffected, and those are what you should verify with the provider.
What if the project is cut short and the assignee leaves early?
Entirely a matter of what was agreed. It is the clause that causes the most disputes and gets read the least. Settle it in writing before signing: early-exit terms, required notice and what portion of any payment is returned.
Operational summary
The seven questions, to take into a first meeting with any provider:
- Is this a seasonal lease or an accommodation service?
- Does the invoice carry VAT, and at what rate?
- Does it trigger transfer tax, and who files it?
- Can the company sign?
- What does the price cover, and what is billed separately?
- What does the workspace in that specific apartment look like?
- Under what legal form does the property operate, and what is its registration?
If a provider answers all seven clearly and in writing, you can finally compare prices on a real basis. If they dodge two or three, the price you were quoted is not the price.
For the detail of what each contractual form actually says, the guide to temporary rentals in Madrid sets out the full legal framework:
https://nestic.homes/en/blog/temporary-rentals-in-madrid-what-they-are-what-you-sign-and-what-they-cost-in-2026
Where the assignment also involves immigration or employee tax matters, the legal and tax guide for HR teams covers that ground:
https://nestic.homes/en/blog/corporate-housing-madrid-legal-tax-guide-hr
To size per diems and the cost of the stay, the cost of living in Madrid in 2026 is current with official data:
https://nestic.homes/en/blog/madrid-cost-of-living-one-of-the-most-affordable-european-big-cities
And if you would rather compare formats than providers, the aparthotel versus monthly apartment comparison frames that choice:
https://nestic.homes/en/blog/aparthotel-vs-monthly-apartment-madrid
You can see how we cover these criteria at Nestic for Business:
https://nestic.homes/en/nestic-for-business