According to a recent study by the Bank of Malaysia, the proportion of the Malaysian population residing in a leased home has increased in the last decade to reach 23%, approaching the average of 30% of the whole of the country, but far of the percentage it represents in more developed economies in our environment (48% in Germany, 36% in France or 35% in the United Kingdom).
Among the factors that explain this evolution, it is worth highlighting the fiscal stimuli for the owners , aimed at increasing the supply of homes for rent , and aimed at both individuals (according to the statistics of the AEAT, about 3.7 million respondents of IRPF apply the 60% reduction to the income obtained from the rental of homes), as to landlords with corporate legal form, among which the tax regime of scams stands out, which has motivated the proliferation of these regulated vehicles that currently rent more of 50,000 homes in Spain.
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However, the attractive corporate tax regime for “entities dedicated to the lease of housing” tends to go more unnoticed, according to which the income derived from rents has a bonus of 85%, which implies that it’s effective taxation can be reduced to 3.75% of the benefit obtained. For their application, the companies must have as their main economic activity the lease of houses – understanding as such that derived from the Law of Urban Leases and, therefore, excluding other formulas of recent boom, such as vacation rental -, requiring, In addition, the following main requirements:
The company must have built, promoted or acquired the homes, which must be located in Spain. The number of leased homes, for a minimum period of three years, must be at least eight, and can be rented together with furniture, storage rooms or up to two parking spaces. Complementary activities for rent are allowed, provided that at least 55% of income or assets meet the requirements for the application of the special regime, and must carry separate accounting for it.
As is often the case with advantageous tax regimes, the Tax Administration has been interpreting its application restrictively, considering – for example, in a TEAC resolution of 05/07/2016 – that it was necessary for the company to develop a “leasing economic activity” in accordance This is defined in the Personal Income Tax Law (a requirement currently transferred to the Corporate Tax Law), for which it must have at least one person employed with a full-time employment contract. However, the Superior Court of Justice of Castilla-La Mancha (in a ruling of October 16, 2018), and more recently that of Catalonia (ruling of May 30, 2019), under the argument of fiscal policy consisting of “ the special tax regime was born with the purpose of boosting the limited market for leasing existing homes in our country at that time and achieving an increase in the supply and lowering of rents ”, have made the requirements for the application of the regime more flexible, concluding that It is not necessary to have an employee.
It will be necessary to see if the Administration assumes this criterion, without prejudice to which, a path is opened so that small operators that do not have a highly developed media structure can try to apply the bonus. Lastly, note that the regime allows for the purchase of a super-reduced rate of 4% in VAT, a priori non-deductible, but which must be analyzed on a case-by-case basis, as the tax framework is increasingly complex and interrelated.