Landlords in Spain to lose tax benefits as new law kicks in

Landlords in Spain to lose tax benefits as new law kicks in. image: Wikipedia

Landlords in Spain are set to lose a percentage of their tax benefits as the new law kicks in this month.

Landlords in Spain that rent out a large number of properties, (more than ten) will lose over half of the tax benefit they currently claim, dropping from 85% down to 40%. According to government sources, this is to balance out the losses incurred due to lower taxable incomes from smaller landlords as rents were lowered during the crisis- it covers a government shortfall.

At present, companies dedicated to renting homes enjoy a special regime when it comes to paying corporation tax, which is levied on profits.

As long as they are legal companies and have eight or more rental homes registered, they can benefit from a bonus that amounts to 85% of what they would have received for the rent obtained from those leases. The exemption amounts to 90% if the tenant is disabled and adaptation works and installations have been carried out in the house.

PSOE and United We Can reached an agreement on Tuesday, October 5, for the coalition government to carry out the Housing Law. This includes specific aspects, such as a new regulations for large property owners.

The law, for those who have more than 10 homes, will regulate prices to lower rents based on the reference index for all contracts in ‘stressed’ market areas. In addition, tax privileges will be withdrawn, according to sources from United We Can.

For smallholders, there will be price freezes and tax incentives to lower rents. As for a tax on empty housing, it will be obtained, according to the agreement, through the surcharge of the IBI up to 150%, which may be applied by the individual municipalities.

 


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Ron Howells

Ron actually started his working career as an Ophthalmic Technician- things changed when, during a band rehearsal, his amplifier blew up and he couldn’t get it fixed so he took a course at Birmingham University and ended up doing a degree course. He built up a chain of electronics stores and sold them as a franchise over 35 years ago. After five years touring the world Ron decided to move to Spain with his wife and son, a place they had visited over the years, and only bought the villa they live in because it has a guitar-shaped swimming pool!. Playing the guitar since the age of 7, he can often be seen, (and heard!) at beach bars and clubs along the length of the coast. He has always been interested in the news and constantly thrives to present his articles in an interesting and engaging way.

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