Spain introduces 40% tax allowance for companies specialising in long-term rentals

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If you’re managing several long-term rental properties in Spain, there could be good news for you in the recent update to the Spanish Corporate Income Tax Law (LIS).

The change to the LIS (specifically Chapter III, Title VII) incorporates a special tax regime for entities that primarily focus on renting out residential properties to longstanding tenants.

The outcome of this new change is that qualifying companies can claim a 40% allowance on their base tax obligations derived from rental income.

The regime covers residential properties, along with their associated furniture, storage units, and up to two parking spaces if rented together.

How do you qualify for the tax allowance?

To be eligible for the allowance, rental companies need to meet the following criteria:

  • Manage a minimum of eight properties.
  • Employ at least one full-time staff member.
  • Maintain rental properties for a minimum holding period of three years.
  • Ensure that the rentals align with Article 2.1 of the LAU (Urban Lease Law), meaning that the properties are primarily intended for permanent residency.
  • Keep separate accounts for each property to ensure transparent tracking of income and expenses.

Maximise your rental earnings now

Don’t miss out on the opportunity to maximise your returns under Spain’s rental property regime!

At CostaLuz Lawyers, our dedicated team of experts is here to provide you with tailored guidance and unwavering support.

Your success is our priority, and we’re committed to helping you navigate the complexities of taxation in Spain with confidence.

Contact us now to ensure you’re making the most informed and advantageous decisions for you.

Maria Luisa Castro

Director and Founder
María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English-speaking clients with legal problems in Spain. We’re here to help. Contact us today for a free, no-obligation, initial legal orientation.

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