Special tax regime for entities that conduct real estate activities

The Spanish Corporate Tax Law provides an Special Tax Regime to those entities which main business activity consists on rental of real estate properties (dwellings) located in Spain. This Special Tax Regime allows the entity to conduct other complementary business activities under certain requirements. The regime consists in an attractive tax benefits for the income derived of the rental activity.

The legal requirements for the application of the regime are the following:

  • The number of the rented dwellings (or offered for rent) must be 8 or more, at all times.
  • These dwellings must be rented (or offered for rent) at least during 3 years.
  • The accounting of the promotion of the real estate activity and the leasing activity it must be different for each dwelling.
  • When the entity performs other business activity (besides the rent), the housing rental activity must be the main activity.



The Corporate Tax Law provides a bonification equal to 85% on the part of the quota which corresponds to the dwellings that comply the legal requirements.

The final tax rate (for this kind of income) is 3,75%. The general Corporate Tax Rate in Spain is 25%, but with this bonification (85%), the final tax rate reaches the mentioned percentage.



The dividends (and other profit distributions) and, at the end of the mandatory three-year of rental mentioned above, capital gains on the disposal of the shares, can be exempted up to 50% provided that the provisions of the article 21 of the Spanish Corporate Tax Law they are met.

In the case of non-resident investors the provisions of the Tax Treaties to avoid Double Taxation must be observed in order to establishes the taxation on dividends and capital gains in Spain. In this sense the Tax Treaties signed with the Netherlands or Turkey establish non-taxation in Spain on the disposal of the shares. In order to apply the provisions of the Treaties it would be necessary to be able to obtain a Tax Residency certificate issued by the country of residence of the foreign investor based on the corresponding Treaty.

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