The capital's City Council and the regional government agree in opposing the tax, which they consider harmful to employment and the competitiveness of the sector.
The City Council of Madrid and the Community of Madrid have firmly ruled out the implementation of a tourist tax in the region. Both administrations agree that this tax, which is in effect in other European cities, would negatively impact a key sector for the local economy and the generation of stable employment. This position was formalised in the municipal plenary session on June 25, 2024, where the government team led by José Luis Martínez-Almeida reaffirmed its refusal.
Local officials argue that it is a priority to maintain a balanced tax system that ensures the financing of public services without detracting from the destination's appeal. Furthermore, the Madrid Tax Agency pointed out that the design of a tax of this nature would require regional regulation, meaning the City Council lacks the authority to approve it unilaterally.
Instead of imposing a tax on tourists, the capital's fiscal plan for 2026 includes other measures: the launch of a new Waste Management Fee, a reduction of the Property Tax (IBI) from 0.428% to 0.414%, and various incentives in the Economic Activities Tax (IAE) to support entrepreneurship.
The decision is based on the significance of tourism in the Madrid economy. According to official data, in 2025 the capital received 11,236,564 visitors and recorded 23,829,629 overnight stays. Foreign tourists' spending reached 17.896 billion euros, with an average expenditure of 1,964 euros per traveller and a daily average of 305 euros. Hotel companies directly supported 12,557 jobs.
The positive trend has continued into 2026. In May of this year, according to the Economic Observatory of the City Council of Madrid, there were 963,864 travellers in hotels and 1,968,434 overnight stays. The workforce in hotel accommodations grew by 5.6% year-on-year, reaching 15,376 employees, with an average occupancy rate of 65.1%.
At the regional level, the regional government also does not consider the tax. Tourism contributes 8.7% of the GDP of the Community of Madrid. In 2025, the region welcomed 15.4 million tourists, with an economic impact of 28.569 billion euros. Instead of creating new taxes, the regional administration has opted for the regulation of the sector. The Governing Council approved on June 10, 2026, a modification of the Tourism Regulation Law, which regulates emerging accommodation types such as hostels and areas for motorhomes, providing legal security without increasing the cost of stays.
With this stance, Madrid distances itself from other Spanish cities like Barcelona or Valencia, which do impose tourist taxes. The strategy of the capital and the region focuses on maintaining competitiveness and employment, avoiding measures that could deter visitors. The debate on the advisability of this tax remains open, but for now, Madrid's institutions maintain their refusal.
You may also like
