PSOE initiative: new incentives for the rental market
At the beginning of 2025, Spain may introduce a new system of tax incentives for companies and investment funds that offer housing at social or affordable rates. The initiative was submitted to the Congress of Deputies (Congreso de los Diputados) by representatives of the Spanish Socialist Workers’ Party (PSOE). The proposal aims to amend the current corporate tax legislation to encourage the development of the affordable rental sector.
Key changes: exemption from corporate income tax
The proposed reform includes introducing an additional provision to the corporate income tax law, in force since 2014. The new measure would exempt from taxation any income received from the transfer of properties intended for social or affordable housing. This benefit would apply to transactions made from January 1, 2025, and would cover only those properties that meet criteria established by the Ministerio de Vivienda y Agenda Urbana.
At the same time, income calculations eligible for exemption will exclude amounts related to losses from property devaluation, as well as sums reflecting repayment of excessive depreciation. Thus, the benefits will apply only to actual profits from the transfer of properties used to implement affordable housing policies.
Expected impact on the real estate market
According to the authors of the initiative, the proposed changes are aimed at increasing the supply of affordable housing and supporting those struggling to find suitable rental options. The explanatory note to the draft states that the goal of the reform is to create a stable and sufficient foundation for the development of the social and affordable housing sector, as well as to provide additional support mechanisms for people facing difficulties with renting.
The introduction of tax incentives is expected to boost activity among companies and investment funds involved in building and transferring properties for social and affordable housing needs. This measure is intended to help balance the rental market and ease the burden on the most vulnerable population groups.
Prospects for approval and next steps
If passed by parliament, the new system of tax benefits will come into force at the start of 2025. The authorities believe this decision will help increase the number of properties available at affordable rates in the short term, partially addressing the shortage of rental housing in major cities and across the country.
