{"id":8095,"date":"2022-07-04T09:52:04","date_gmt":"2022-07-04T09:52:04","guid":{"rendered":"https:\/\/gmtaxconsultancy.com\/nie\/regimen-especial-arrendamiento-viviendas\/"},"modified":"2022-07-04T11:16:29","modified_gmt":"2022-07-04T11:16:29","slug":"special-tax-regime-rental-property-spain","status":"publish","type":"post","link":"https:\/\/gmtaxconsultancy.com\/en\/news\/special-tax-regime-rental-property-spain\/","title":{"rendered":"Special Tax Regime Modification for Rental Property in Spain (EDAV)"},"content":{"rendered":"<p>[et_pb_section bb_built=&#8221;1&#8243; inner_width=&#8221;auto&#8221; inner_max_width=&#8221;1080px&#8221;][et_pb_row][et_pb_column type=&#8221;4_4&#8243; custom_padding__hover=&#8221;|||&#8221; custom_padding=&#8221;|||&#8221;][et_pb_text _builder_version=&#8221;4.14.8&#8243; text_text_shadow_horizontal_length=&#8221;text_text_shadow_style,%91object Object%93&#8243; text_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; text_text_shadow_vertical_length=&#8221;text_text_shadow_style,%91object Object%93&#8243; text_text_shadow_vertical_length_tablet=&#8221;0px&#8221; text_text_shadow_blur_strength=&#8221;text_text_shadow_style,%91object Object%93&#8243; text_text_shadow_blur_strength_tablet=&#8221;1px&#8221; link_text_shadow_horizontal_length=&#8221;link_text_shadow_style,%91object Object%93&#8243; link_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; link_text_shadow_vertical_length=&#8221;link_text_shadow_style,%91object Object%93&#8243; link_text_shadow_vertical_length_tablet=&#8221;0px&#8221; link_text_shadow_blur_strength=&#8221;link_text_shadow_style,%91object Object%93&#8243; link_text_shadow_blur_strength_tablet=&#8221;1px&#8221; ul_text_shadow_horizontal_length=&#8221;ul_text_shadow_style,%91object Object%93&#8243; ul_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; ul_text_shadow_vertical_length=&#8221;ul_text_shadow_style,%91object Object%93&#8243; 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Object%93&#8243; quote_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_text_shadow_horizontal_length=&#8221;header_text_shadow_style,%91object Object%93&#8243; header_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_text_shadow_vertical_length=&#8221;header_text_shadow_style,%91object Object%93&#8243; header_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_text_shadow_blur_strength=&#8221;header_text_shadow_style,%91object Object%93&#8243; header_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_2_text_shadow_horizontal_length=&#8221;header_2_text_shadow_style,%91object Object%93&#8243; header_2_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_2_text_shadow_vertical_length=&#8221;header_2_text_shadow_style,%91object Object%93&#8243; header_2_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_2_text_shadow_blur_strength=&#8221;header_2_text_shadow_style,%91object Object%93&#8243; header_2_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_3_text_shadow_horizontal_length=&#8221;header_3_text_shadow_style,%91object Object%93&#8243; header_3_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_3_text_shadow_vertical_length=&#8221;header_3_text_shadow_style,%91object Object%93&#8243; header_3_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_3_text_shadow_blur_strength=&#8221;header_3_text_shadow_style,%91object Object%93&#8243; header_3_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_4_text_shadow_horizontal_length=&#8221;header_4_text_shadow_style,%91object Object%93&#8243; header_4_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_4_text_shadow_vertical_length=&#8221;header_4_text_shadow_style,%91object Object%93&#8243; header_4_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_4_text_shadow_blur_strength=&#8221;header_4_text_shadow_style,%91object Object%93&#8243; header_4_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_5_text_shadow_horizontal_length=&#8221;header_5_text_shadow_style,%91object Object%93&#8243; header_5_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_5_text_shadow_vertical_length=&#8221;header_5_text_shadow_style,%91object Object%93&#8243; header_5_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_5_text_shadow_blur_strength=&#8221;header_5_text_shadow_style,%91object Object%93&#8243; header_5_text_shadow_blur_strength_tablet=&#8221;1px&#8221; header_6_text_shadow_horizontal_length=&#8221;header_6_text_shadow_style,%91object Object%93&#8243; header_6_text_shadow_horizontal_length_tablet=&#8221;0px&#8221; header_6_text_shadow_vertical_length=&#8221;header_6_text_shadow_style,%91object Object%93&#8243; header_6_text_shadow_vertical_length_tablet=&#8221;0px&#8221; header_6_text_shadow_blur_strength=&#8221;header_6_text_shadow_style,%91object Object%93&#8243; header_6_text_shadow_blur_strength_tablet=&#8221;1px&#8221; box_shadow_horizontal_tablet=&#8221;0px&#8221; box_shadow_vertical_tablet=&#8221;0px&#8221; box_shadow_blur_tablet=&#8221;40px&#8221; box_shadow_spread_tablet=&#8221;0px&#8221; vertical_offset_tablet=&#8221;0&#8243; horizontal_offset_tablet=&#8221;0&#8243; z_index_tablet=&#8221;0&#8243;]<\/p>\n<p><span style=\"font-weight: 400;\">To promote a real estate market with more competitive prices that would make the right to housing more accessible to citizens, the Special tax regime for rental property (\u201c<\/span><i><span style=\"font-weight: 400;\">R\u00e9gimen especial de arrendamiento de viviendas, EDAV<\/span><\/i><span style=\"font-weight: 400;\">\u201d) was approved in 2003, which implied more attractive taxation for the investors of real estate assets intended for housing.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-white ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">\u00cdndice contenidos<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/gmtaxconsultancy.com\/en\/news\/special-tax-regime-rental-property-spain\/#Corporate_Tax_Law\" >Corporate Tax Law<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/gmtaxconsultancy.com\/en\/news\/special-tax-regime-rental-property-spain\/#Regulations\" >Regulations<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Corporate_Tax_Law\"><\/span><strong>Corporate Tax Law<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Said regime, which is regulated in Chapter III of Title VII of the Corporate Tax Law (hereinafter, \u201cLIS\u201d), in its current wording, establishes that the requirements to opt for it are:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That at all times during the tax period the company has 8 or more housing properties rented or offered for rental.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That these homes are rented for a minimum of 3 years.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That an individual accounting is made for each rented property.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If the company carries out another complementary activity, the housing rental activity represents at least 55% of the total income or that 55% of the value of the company&#8217;s assets can generate said income with the right to relief (\u201c<\/span><i><span style=\"font-weight: 400;\">bonificaci\u00f3n<\/span><\/i><span style=\"font-weight: 400;\">\u201d).<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">The application of said regime is optional and must be communicated to the Tax Authorities.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Regulations\"><\/span><strong>Regulations<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In addition, it is incompatible with the other special regimes (also with that of Reduced Dimension Entities &#8220;<\/span><i><span style=\"font-weight: 400;\">Entidades de Reducida Dimensi\u00f3n, ERD<\/span><\/i><span style=\"font-weight: 400;\">&#8220;), except those of fiscal consolidation, that international tax transparency and mergers, spin-offs, contributions of assets and exchanges of securities.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since the approval of Law 22\/2021, of December 28<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\">, which entered into force on <\/span><b>January 1<\/b><b>st<\/b><b>, 2022, the relief<\/b><span style=\"font-weight: 400;\"> of the tax payable amount \u201c<\/span><i><span style=\"font-weight: 400;\">cuota \u00edntegra<\/span><\/i><span style=\"font-weight: 400;\">\u201d<\/span> <span style=\"font-weight: 400;\">that corresponds to income derived from housing rental <\/span><b>is 40% (with respect to the previous 85 %).<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This recent regulation does not change the fact that in the event of distribution of dividends coming from the rental income to which said relief is applied, the dividend exemption of article 21 LIS is used only to 50% of its amount.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is worth analysing whether the application of said EDAV regime is more beneficial, especially for those entities that intend to transfer their profits in the form of dividends. To do so, let&#8217;s see what the net return would be if the company dedicated to housing rentals has a profit before taxes of \u20ac50,000, in the event of:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">a) Distributing the dividends directly to a natural person partner with the application of the EDAV regime,<\/span><\/p>\n<p><span style=\"font-weight: 400;\">b) Distributing said dividend through an interposed company with the application of the EDAV regime, and<\/span><\/p>\n<p><span style=\"font-weight: 400;\">c) Distributing the dividend through an interposed company without application of the EDAV regime.<\/span><\/p>\n<table style=\"height: 580px;\" width=\"853\">\n<tbody>\n<tr>\n<td>\u00a0<\/td>\n<td>\n<p style=\"text-align: center;\"><b>Dividends to NP<\/b><\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\"><b>Dividends to LP with EDAV<\/b><\/p>\n<\/td>\n<td>\n<p style=\"text-align: center;\"><b>Dividends to LP without EDAV<\/b><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Profit Before Taxes<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">50.000 \u20ac<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">50.000 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">50.000 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Tax payable, \u201c<\/span><i><span style=\"font-weight: 400;\">Cuota \u00edntegra<\/span><\/i><span style=\"font-weight: 400;\">\u201d<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">12.500 \u20ac<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">12.500 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">12.500 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Relief *<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">5.000 \u20ac\u00a0<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">5.000 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">0 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Net tax payable<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">7.500 \u20ac<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">7.500 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">12.500 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Profit to distribute<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">42.500 \u20ac<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">42.500 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">37.500 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Company dividends cost<\/span><\/td>\n<td style=\"text-align: center;\">&#8211;<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">5.578\u20ac ***<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">468 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Company net return<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">&#8211;<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">36.922 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">37.031 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Dividend PIT (IRPF) of the Natural Person cost<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">8.805 \u20ac\u00a0<\/span><\/p>\n<\/td>\n<td style=\"text-align: center;\"><span style=\"font-weight: 400;\">7.633 \u20ac<\/span><\/td>\n<td>\n<p style=\"text-align: center;\"><span style=\"font-weight: 400;\">7.656 \u20ac<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td><b>Net return NP Partner<\/b><\/td>\n<td>\n<p style=\"text-align: center;\"><b>33.695 \u20ac<\/b><\/p>\n<\/td>\n<td style=\"text-align: center;\"><b>29.289 \u20ac<\/b><\/td>\n<td>\n<p style=\"text-align: center;\"><b>29.375 \u20ac<\/b><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>\u00a0<\/p>\n<p><i><span style=\"font-weight: 400;\">*40% relief of the total tax payable.<\/span><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">** Application of the savings base rate base don article 66 of the Personal Income Tax Law.\u00a0<\/span><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">***On the 50% of the 42.500\u20ac. the exemption of 21 LIS is applied on the 95% (on the other 5% the tax rate of 25%); on the other 50% the tax rate of 25% is applied directly.\u00a0\u00a0<\/span><\/i><\/p>\n<p><b>Consequently, as it can be seen in the table, the EDAV regime is no longer beneficial for those companies that want to distribute the dividends to another company,<\/b><span style=\"font-weight: 400;\"> since the 40% bonus does not compensate for the loss of the right to the exemption of article 21 LIS. over 50% of income. All this without taking into account due compliance with the rest of the requirements, such as a stricter accounting regime or not being able to apply the advantages of the ERD regime. <\/span><b>The EDAV regime will only be attractive from a fiscal point of view if you want the money distributed through dividends to reach the natural person directly.<\/b><\/p>\n<p>\u00a0<\/p>\n<p><span style=\"font-weight: 400;\">In case of questions about this or other matters, do not hesitate to contact our <a href=\"https:\/\/gmtaxconsultancy.com\/en\/tax-advice-barcelona\/\">tax advisors in Barcelona<\/a>.<\/span><\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p><div class=\"et_pb_row et_pb_row_0 et_pb_row_empty\">\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div> To promote a real estate market with more competitive prices that would make the right to housing more accessible to citizens, the Special tax regime for rental property (\u201cR\u00e9gimen especial de arrendamiento de viviendas, EDAV\u201d) was approved in 2003, which implied more attractive taxation for the investors of real estate assets intended for housing.Corporate [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":8092,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[127],"tags":[],"class_list":["post-8095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts\/8095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/comments?post=8095"}],"version-history":[{"count":0,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/posts\/8095\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/media\/8092"}],"wp:attachment":[{"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/media?parent=8095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/categories?post=8095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gmtaxconsultancy.com\/en\/wp-json\/wp\/v2\/tags?post=8095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}