STORIES

27 January, 2017

How to save up Spanish taxes in the rental of home dwellings

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The rental of home dwellings in Spain owned by a Spanish company can benefit from an advantageous tax system.

The rental of home dwellings in Spain owned by a Spanish company can benefit from an advantageous tax system, leading to an effective Corporate income tax rate of 3.75% in fiscal year 2016 for Spanish property investment.

An appropriate tax planning of your property investments can assist you in achieving an optimal tax savings while increasing your investment’s return.

If you did not know how to resolve these concerns, you should not miss the opportunity to learn more about it.


This special system applies to companies whose social purpose comprises the rental of home dwellings located in the Spanish territory, either purchased or promoted by the entity.

Companies electing for this special system on Spanish property investment can engage in other activities although income subject to tax relief must represent, at least, 55% of all the fiscal year income, (or, alternatively, at least 55% of the assets’ value has to benefit from this tax relief).

The minimum number of properties either leased or offered for lease in each fiscal year is eight. The length of the rental period has to be, at least, of three years. Consequently, it excludes vacation rentals from benefiting from this special system.

The company must have available supporting detail of the income which is attributable to each property.

A tax relief of 85% of the tax quote applies on the rental income corresponding to home dwellings meeting the above – mentioned requirements. This leads to an effective tax rate of 3.75% in fiscal year 2016, far below the standard 25% rate.

After the collapse of the Spanish property bubble, we are now seeing rays of sunlight in a market, which is ready to gro. Therefore, it is time to check on your best opportunities to improve your net return on your Spanish property investments.

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