TRLIS: the 8-property law in Spain

Spain has a very competitive tax law called the Spanish Corporation Tax Act (TRLIS). This is a great opportunity for companies whose main economic activity is the leasing of homes located in Spain. It is suitable with other complementary activities and with the transfer of the leased properties after the minimum maintenance period has elapsed. This law is especially useful for property developers who are renting their properties while waiting to sell them.

Advantages:

If your business owns and rents out 8 properties or more, you can receive a reduction of 40% on your corporate income tax (Impuesto de Sociedades).

Requirements:

• The number of houses leased or offered for lease must be at all time equal or greater than 8.
• The requirement is that you must have each property rented out (or on offer) for at least 3 years. If you sell the property before the 3 years is up, you will have to pay the taxes that were reduced on this property.
• Real estate promotion and leasing activities are subject to separate accounting for each property purchased or promoted.
• If your company has other activities besides property rental, you can still make use of this tax reduction as long as 55% of your earnings are from property rental.

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