*The tax authorities say they should pay either 1.1% or 2% of the property’s cadastral value each year.
The High Court of Justice in Madrid (TSJM) has made a decision that goes against what the Treasury thought. They said that foreign people who move to Spain and use a special tax rule called the Beckham Law don’t have to pay taxes on their main home.
On June 17, the Central Economic-Administrative Court (TEAC) decided to follow the same rule and said that these people still need to pay something called imputed real estate income on their home.
This means they have to pay either 2% of the home’s cadastral value or 1.1% if the value was changed after 2012.
However, on September 17, the TSJM made a different decision, upholding the criteria established on May 6, 2024. The court explained that even though the IRNR, by logic, is not meant to cover homes of foreigners since it is designed for people who do not live in Spain, those under the Beckham Law do live in the country for tax purposes. These individuals are income tax payers who, for five years, have the option to pay IRNR but still retain the conditions of the original tax. Therefore, the exemption for primary residences should also apply to them.
Do you want to apply for the “Beckham law” special tax regime? we can offer you the perfect technical solution that will make that in a week maximum (or less) the administration will examine your file and issue your resolution of acceptance of the special tax regime. We will take care of everything and you will not have to do anything.
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