To encourage the acquisition of real estate, Royal Decree-Law of 11
May 2012 on loss provisioning and the sale of real estate held by the
financial sector, establishes a 50% exemption on personal income tax,
non-resident income tax and corporate income tax when the gain derives
from the sale of urban real estate acquired between 12 May and 31
December 2012. This exemption will not apply to related-party
transactions.
As a result of the 50% exemption, the effective tax rates will be
reduced to a maximum of 13.5% (10.5% as from 1 January 2014) for
resident individuals and non-residents and to 15% for companies and
permanent establishments in Spain.
The Spanish Council of Ministers has also approved a preliminary
draft bill establishing the following tax measures:
- a 60% non-resident income tax exemption on income deriving from
the lease of dwellings. The exemption is increased to 100% if the
tenant is between 18 and 30 years of age, and his/her monthly
professional income exceeds EUR 532.51 ; and
- an exemption on the extraordinary tax on real estate for
non-resident companies, currently set at 3% over the cadastral value
of the land. This exemption does not apply to companies resident in
tax havens.
The draft bill eases the regulations governing Spanish Real Estate
Investment Trusts (SOCIMIs in Spanish), as:
- real estate must be leased for a minimum of three years rather
than seven as previously established;
- the diversification requirement whereby SOCIMIs must have at least
three real estate assets, none of which should represent over 40% of
all their assets, is removed;
- the profit distribution obligations are lowered from 90% to 50% of
the profits that do not derive from dividends, in order to encourage
reinvestment;
- the minimum requirements to be admitted to trading on a regulated
market are removed. Minimum floating capital is set at 15% of the
total assets (from the previous 25%) and at 50 shareholders (from the
previous 100);
- the minimum share capital is reduced from EUR 15 million to EUR 5
million; and
- the 70% leverage limit is removed.
SOCIMIs will pay 19% corporate income tax on profits, and a 25%
exemption will apply to income deriving from leasing dwellings.
The government has also proposed the amendment of the Criminal Code.
A more serious tax offence is proposed for tax fraud exceeding EUR
600,000 or when it is committed by an organised crime group. The
imprisonment penalty for these offences is increased to two to six years
from the current one to five year period. The prescription period for
these offences is increased to ten years while that of other tax
offences is five years.
MORE INFORMATION: NEWSLETTER ON ROYAL DECREE-LAW 18/2012 OF 11 MAY, ON
THE WRITE-DOWN AND SALE OF REAL ESTATE ASSETS OF THE BANKING SECTOR
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