Tax reforms to boost productivity and apartment rentals

Automatic summary, not yet reviewed

1. It creates a new type of real estate collective investment institution that can build apartments to rent them out. It pays a reduced 1 percent Corporate Income Taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. rate if it meets requirements, such as keeping the properties for at least three years, or seven years if it built them itself.
2. It expands the deduction for technological innovation to include textile sample books, and raises the deduction for information and communication technologies in small and medium-sized businesses from 10 to 15 percent.
3. It changes the special regime for companies that rent out apartments: it removes restrictions, keeps an 85 percent tax credit on income from apartment rentals, and removes the credit on income from selling properties.
4. It limits the VAT exemption for postal services, starting January 1, 2006, to the universal postal service reserved for the public operator. It also removes the 4 percent rate for apartments bought by companies that rent out housing.
5. It extends the exemption and tax credit in the Transfer Tax to real estate collective investment institutions that build properties to rent, with a 95 percent credit on purchases of apartments and land for that purpose.
6. It lowers the fee limits charged by the National Securities Market Commission for registering prospectuses and processing takeover bids, to make issuing securities cheaper and improve the competitiveness of the financial sector.

Who it affects

• Companies that build or rent out apartments: They can pay less tax if they meet the requirements of the special regime.
• Small and medium-sized businesses: They get a bigger deduction for investing in information and communication technologies.
• Companies doing technological innovation: They can deduct more expenses, including textile sample books.
• Securities issuers: They pay lower fees to register prospectuses or process takeover bids.
• Notaries and property registrars: They do not charge fees for certain documents of companies under the special regime for eighteen months.

Words worth knowing

Institución de inversión colectiva

A fund or company that pools money from many investors to invest it, in this case in real estate.

Cuota íntegra

The tax amount you get by applying the tax rate to the tax base, before deductions and credits.

Bonificación

A reduction of part of the tax owed.

OPA

A takeover bid: a public offer to buy the shares of a company addressed to all its shareholders.

Arancel

The fee that notaries and registrars charge for their official services.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries