The 3% Special Levy on Spanish Property Held by Non-Resident Entities
Somewhere between Torrevieja and Dénia there are several thousand villas whose owner of record is a company incorporated in Gibraltar, Jersey, the Isle of Man or the British Virgin Islands. In the 1990s and 2000s the structure was sold at the beach as a piece of clever planning: the property never changes hands, so there is no Spanish inheritance tax, no transfer tax on a resale and no name on the Spanish register. What was rarely explained is Chapter VI of the Spanish Non-Resident Income Tax Act, arts. 40 to 45, which charges an entity resident in a jurisdiction Spain treats as non-cooperative a levy of 3% of the cadastral value of the property, every year, for as long as it holds it, with no cap and no end date. This guide reads those six articles as they stand, explains who is actually caught, which exemptions the statute contains, what happens to the property when nobody files, and what each way out costs.
Quick answer
An entity resident in a country or territory Spain treats as a tax haven — read today as a non-cooperative jurisdiction — that owns Spanish real estate, or holds a right of use or enjoyment over it, pays a special levy of 3% of the cadastral value every year (arts. 40, 41 and 43 TRLIRNR). It accrues on 31 December and is declared the following January. Art. 42 exempts foreign States, listed companies and entities with a real economic activity.
Reviewed by
Valery Grinkevich
Licensed economist · tax adviser · 20+ years of experience · Torrevieja, Costa Blanca
Key takeaways
- The levy reaches entities resident in a country or territory that has the consideration of a tax haven — today read as a non-cooperative jurisdiction — that own or hold by any title Spanish real estate or rights of use and enjoyment over it (art. 40 TRLIRNR). An ordinary EU or treaty-country company is outside art. 40 altogether.
- The base is the cadastral value of the property; where there is no cadastral value, the value determined under the Wealth Tax rules (art. 41.1). Co-ownership is taxed proportionally to the share held (art. 41.2).
- The rate is 3% (art. 43). It accrues on 31 December each year and must be declared and paid in the following January (art. 45.1); AEAT collects it on form 213.
- Art. 42 exempts foreign States, public institutions and international organisations; entities carrying on in Spain, continuously or habitually, economic activities distinguishable from the mere holding or letting of the property, on the terms set by regulation; and companies listed on officially recognised secondary markets.
- If nobody files, the debt is enforced by the collection procedure against the property itself, the certificate of the expired voluntary period being sufficient title (art. 45.2); and on a later sale the property remains affected to payment of the levy (art. 45.3).
On this page
- What the special levy is, and the gap in the law where it sits
- Who is caught: art. 40 and the non-cooperative jurisdiction test
- Why this guide does not print the list of jurisdictions
- The base: cadastral value, and what happens when there is none
- 3%, 31 December and the month of January
- The exemptions in art. 42 — the part that saves most owners
- The treaty exemption that circulates in English, and what the text says
- What happens when nobody files: apremio, affection and surcharges
- Deductibility under art. 44, and why it usually gives you nothing
- What else the structure drags behind it
- Why the Costa Blanca was sold this structure
- Getting out: the three routes and what each one wakes up
- What to do before the next 31 December
- How to deal with a Spanish property held by a non-resident entity
- Frequently asked questions
What the special levy is, and the gap in the law where it sits
The Gravamen Especial sobre Bienes Inmuebles de Entidades no Residentes is not a separate tax. It is Chapter VI of the consolidated Non-Resident Income Tax Act — Real Decreto Legislativo 5/2004, the TRLIRNR — and it works as a stand-alone charge inside that Act: six articles, from art. 40 to art. 45, with their own taxable person, their own base, their own rate, their own accrual date and their own enforcement rule.
Its shape is easier to understand next to art. 13.1.h) of the same Act. Imputed income on unlet urban property in Spain — the deemed rent that every non-resident owner of a holiday home declares on form 210 — is charged only to individuals: the article speaks of income imputed to taxpayers who are individuals holding urban property not assigned to economic activities. A company holding an empty villa produces no imputed income at all. Where the company is resident in an ordinary jurisdiction, that is simply how the law works. Where it is resident in a jurisdiction Spain treats as non-cooperative, Chapter VI steps in and charges 3% of the cadastral value a year regardless of whether the villa produced a single euro.
That is why the levy feels so unlike the rest of Spanish property taxation. There is no income to measure, no gain to compute and no transaction to tax. The taxable event is simply holding: owning the property, or holding by any title a real right of use or enjoyment over it, on 31 December. It is also why the bill never stops. A villa held quietly for fifteen years has generated fifteen annual liabilities, each one with its own filing deadline and its own clock.
Who is caught: art. 40 and the non-cooperative jurisdiction test
Art. 40 is one sentence, and every word of it does work. Entities resident in a country or territory that has the consideration of a tax haven, which own or hold in Spain, by any title, real property or real rights of use or enjoyment over it, are subject to the tax by means of a special levy. Three tests, all of which must be met: the holder is an entity, not an individual; that entity is resident in a listed jurisdiction; and it holds Spanish real estate or a right over it.
The first test is the one that most reassures readers. The levy never reaches an individual. A Belgian couple who own their apartment in Guardamar in their own names cannot be caught by art. 40, whatever else they owe. The second test is the one that decides real cases, and it is a test about the company, not about the shareholder: what matters is where the entity is resident, not the nationality or residence of the people behind it. A British family company incorporated in England is outside art. 40; the same family holding through a BVI company is inside it. The third test is broader than ownership. Holding by any title covers a usufruct, a right of use, a right of habitation or a long-term real right of enjoyment over a Spanish property, so a structure that keeps bare ownership abroad and grants the enjoyment to the entity does not escape.
The statute still uses the old words, paraíso fiscal, and the consolidated text we read — updated to 25 May 2023 — has not been rewritten. The bridge is elsewhere: references in tax legislation to tax havens, to territories with no effective exchange of information and to nil or low taxation are to be read as references to the definition of non-cooperative jurisdiction in DA 1.ª of Ley 36/2006, in the wording given by Ley 11/2021, which added DA 10.ª to that Act for precisely this purpose. So art. 40 means, today, entities resident in a non-cooperative jurisdiction as defined there.
Watch out
The test looks at the entity, not at you. Moving your own tax residence to Spain, or out of it, changes nothing about art. 40: as long as the company itself is resident in a listed jurisdiction and holds the villa on 31 December, the levy accrues.
Why this guide does not print the list of jurisdictions
DA 1.ª of Ley 36/2006, as rewritten by Ley 11/2021, does not contain a list. It sets criteria and delegates the list to a Ministerial Order of the Ministry of Finance. The criteria are three: transparency — whether there is mutual assistance legislation on the exchange of tax information in the terms of the General Tax Act, whether information is effectively exchanged with Spain, the outcome of the peer reviews of the Global Forum on Transparency and Exchange of Information, and the effective exchange of beneficial ownership information; whether the territory facilitates offshore instruments or companies aimed at attracting profits that do not reflect real economic activity there; and the existence of low or nil taxation, measured against Spanish personal, corporate and non-resident income tax.
The Order is updated. That is the entire design: a dynamic list rather than a frozen one, which also means that any list printed in an article ages badly and that a jurisdiction can enter or leave it between one 31 December and the next. Under the transitional rule kept in Ley 36/2006, until the Order determines them, the territories listed in Real Decreto 1080/1991 have that consideration — a rule written for the gap between the reform and the first Order, and a reminder that the answer has changed over time.
So this guide will not tell you that Gibraltar, Jersey, the Isle of Man or the British Virgin Islands is or is not a non-cooperative jurisdiction today. That is a question about the Order in force for the year you are asking about, and getting it wrong in either direction is expensive: assuming you are caught when you are not means paying a levy you do not owe, and assuming you are not means an unpaid liability that enforces itself against the villa. One more rule closes the loop: where Spain has a double tax convention in force with a jurisdiction that is on the list, the non-cooperative rules still apply to the extent they do not contradict the convention (DA 1.ª.5 of Ley 36/2006).
The base: cadastral value, and what happens when there is none
The base of the special levy is the cadastral value of the property (art. 41.1). Not the market value, not the price paid, not the valor de referencia used for transfer tax: the cadastral value, the same figure your IBI receipt is built on. That is usually good news, because cadastral values normally sit below market value, and it makes the levy easy to compute: read the cadastral value from the IBI receipt or from the Catastro certificate and apply 3%.
Where there is no cadastral value — a plot that has never been given one, a property still being incorporated into the Catastro — the same article sends you to the value determined under the rules applicable for Wealth Tax purposes. Those rules value real property at the greatest of three figures: the cadastral value, the value determined or verified by the Administration for the purposes of other taxes, or the price, consideration or value of acquisition (art. 10.Uno of Ley 19/1991). The fallback is therefore materially harsher than the ordinary rule, because it can reach the purchase price.
Where the entity holds the property together with other persons or entities, the levy is payable only on the part of the value of the assets or rights that corresponds proportionally to its share (art. 41.2). A company holding 50% of a villa with the other half in an individual name pays 3% of half the cadastral value; the individual half is outside the levy entirely, though it produces its own imputed income under the ordinary IRNR rules.
Tip
Your annual IBI receipt splits the cadastral value into land and construction. For this levy the figure that matters is the total cadastral value of the property, not the land component that drives the plusvalía municipal.
3%, 31 December and the month of January
The rate is 3% (art. 43). It is a flat rate: there is no scale, no minimum, no reduction for the number of days in the year the property was held and no relief for a property that stood empty. Nor is there any credit for the IBI the entity has already paid to the town hall on the same cadastral value, or for any Spanish tax paid on rental income from the same property.
The levy accrues on 31 December of each year and must be declared and paid in the January following the accrual, in the place and form laid down (art. 45.1). The statute leaves the form to regulation; the return AEAT provides for it is form 213. Two consequences follow from the accrual date. First, what matters is the situation on 31 December: an entity that sold the villa in November owes nothing for that year, and an entity that acquired it in December owes the full 3%. Second, each year is a separate self-assessment with its own January deadline, which is why the arrears in these cases arrive as a stack of years rather than as one number.
Because the accrual is annual and automatic, nothing needs to happen for the liability to arise. No notice is sent, no assessment is issued and no reminder reaches the address abroad. The obligation is a self-assessment: it exists whether or not anyone in the structure knows about it.
The exemptions in art. 42 — the part that saves most owners
Art. 42 is short and closed. The special levy on real property is not payable by: foreign States and public institutions and international organisations; entities that carry on in Spain, on a continuous or habitual basis, economic activities distinguishable from the mere holding or letting of the property, in accordance with what is laid down by regulation; and companies listed on officially recognised secondary securities markets.
The middle case is the one that decides the real files, and it is drafted to be hard to satisfy. Two adverbs and one adjective carry the whole test. The activity must be carried on in Spain; it must be continuous or habitual, not occasional; and it must be distinguishable from the mere holding or letting of the property — which means that letting the villa out, even all year and even at a profit, is precisely the activity the exemption excludes. The article also refers expressly to what is laid down by regulation, so the criteria and the evidence live in the implementing regulation of the Act and must be checked there before anyone relies on this letter.
The other two cases are narrow but clean. A foreign State or a public institution of a foreign State — a diplomatic property, a cultural institute — is outside the levy, as is an international organisation. A company whose shares are listed on an officially recognised secondary market is outside it too, on the reasoning that a listed company is not an opaque holding vehicle. Neither exemption is available to the ordinary villa-holding company, which is the entire point of the chapter.
Example
Two companies, same street in Jávea. Company A owns a villa it lets to holidaymakers all summer: letting is expressly not enough for art. 42.b), so if A is resident in a listed jurisdiction the 3% is due. Company B runs a licensed aparthotel from the building with staff and a business licence: that is an economic activity distinguishable from mere holding or letting, and the exemption is in play — subject to the requirements the regulation sets.
The treaty exemption that circulates in English, and what the text says
A great deal of English-language material on this levy describes a fourth exemption: entities entitled to the application of a double taxation convention containing an exchange of information clause, provided the individuals who ultimately own the capital are resident in Spain or entitled to a convention with such a clause, and provided their identity is proved. Advisers built whole files around that paragraph, because it turned the question into a documentary exercise: identify the ultimate owners, prove their residence, keep the exemption.
That paragraph did exist, which is why it still circulates. It was in the original 2004 wording of art. 42 of the TRLIRNR, and the fifth final provision, paragraph 3, of Law 16/2012 of 27 December removed it with effect from 1 January 2013. Since then the article contains three letters and no treaty case: foreign States and public bodies, entities with a distinguishable economic activity, and listed companies. The structure makes sense once you notice what art. 40 now says, because the levy no longer reaches every non-resident entity: it reaches only entities resident in a jurisdiction with the consideration of a tax haven. A carve-out for treaty-covered entities has little left to do when treaty-covered entities are, as a rule, outside the charge in the first place.
Two practical consequences. First, if an adviser tells you your structure is safe because you documented the ultimate beneficial owners under a treaty exemption, ask which article of the text in force that exemption sits in — and check the consolidated text on the BOE for the year concerned, because the answer for a 2003 liability need not be the answer for a 2026 one. Second, the treaty question has not disappeared, it has moved: where Spain does have a convention in force with a listed jurisdiction, the non-cooperative rules apply to the extent they do not contradict it (DA 1.ª.5 of Ley 36/2006), which is an argument to be made on the treaty text, not a box to tick.
What happens when nobody files: apremio, affection and surcharges
Art. 45.2 is the reason this levy is not a theoretical problem. Failure to self-assess and pay within the January deadline gives rise to enforcement by the collection procedure against the real property itself, and the certificate issued by the tax administration stating that the voluntary payment period expired without payment, and the amount, is sufficient title to start it. There is no need for a prior assessment addressed to a company nobody can find abroad: the debt is enforced against the asset that is in Spain and cannot move.
Art. 45.3 closes the other exit. Where an entity subject to the special levy transfers Spanish real property, the transferred property remains affected to payment of the amount of the levy. In plain terms, the charge follows the villa into the hands of the buyer. This is why a serious purchase due diligence on a company-owned property asks for the 213 filings of the open years before completion, and why the amount is routinely retained at the notary until they are produced.
The ordinary General Tax Act machinery sits on top. A late self-assessment filed before any demand carries the art. 27 LGT surcharge — 1% plus 1% for each complete month of delay, and 15% plus late-payment interest once twelve months have passed — and excludes the penalty. If instead the demand arrives first, the executive-period surcharges of art. 28 LGT apply — 5%, 10% or 20% depending on when payment is made — and failure to pay the amount due on a self-assessment is a tax infringement in its own right (art. 191 LGT). Each annual liability prescribes on its own four-year clock, counted from the day after the January filing deadline for that year (arts. 66 and 67 LGT), so the oldest years fall away while the recent ones stay live.
Watch out
Because the levy enforces itself against the property, the person who ultimately pays is often not the person who set the structure up: the buyer of a company-owned villa, or the heir who inherits the shares, meets the arrears.
Deductibility under art. 44, and why it usually gives you nothing
Art. 44 says that the amount of the special levy is a deductible expense for the purpose of determining the base of the tax which, where applicable, would correspond under the preceding articles of this Act. The deduction therefore operates inside the non-resident income tax of the same entity — against the income the entity itself obtains in Spain — and not against corporate income tax in Spain, which the entity does not pay, nor against tax in its home jurisdiction, which is a question for that jurisdiction.
In practice the deduction is close to worthless for the ordinary villa-holding company, and the reason is art. 24.1. For non-residents operating without a permanent establishment, the base is the gross amount of the income, with no expenses deducted at all; only taxpayers resident in another EU Member State, or in an EEA State with effective exchange of information, may deduct expenses directly linked to the Spanish income (art. 24.6). An entity resident in a listed jurisdiction is by definition neither. So the company pays the ordinary IRNR on gross rent at the general rate of 24% (art. 25.1.a, the reduced 19% being reserved for EU and qualifying EEA residents), and the 3% levy sits alongside it with nothing to reduce.
The deduction has real content only where the entity has a permanent establishment in Spain, because a permanent establishment computes its base under the corporate income tax rules (art. 18.1) and can therefore absorb the expense. That is the same territory as the art. 42.b) exemption: an entity with a genuine, continuous economic activity in Spain will usually have a permanent establishment, in which case it is outside the levy rather than deducting it. One last detail worth knowing if you receive Spanish-source income through the structure: a withholding agent computes the withholding without taking art. 44 into account (art. 31.2), so nothing about this deduction reduces the tax withheld at source.
What else the structure drags behind it
The 3% is rarely the only surprise. An entity resident in a territory with no effective exchange of tax information that holds assets situated in Spain is required to appoint a representative resident in Spain before the end of the filing period — the obligation is triggered by the mere holding of the asset, not by any income (art. 10.1 TRLIRNR). Failure to appoint is a serious infringement with a fixed fine of 2,000 euros, rising to 6,000 euros for taxpayers resident in those territories (art. 10.4), and where nobody is appointed the tax administration may treat the depositary or manager of the assets as the representative (art. 10.3). Structures designed to be invisible end up with a Spanish representative chosen by the Administration.
The depositary or manager is also exposed. The depositary or manager of assets or rights of non-resident taxpayers not connected with a permanent establishment is jointly and severally liable for the tax debts relating to the income from those assets, and where the owner is resident in a territory treated as a tax haven the Administration may proceed directly against that responsible party, without the prior administrative act of derivation of liability (art. 9.1 and 9.3). Lawyers, administrators and agents holding the keys to these villas do not always know that.
Then there is the shareholder. Non-listed shares in any entity whose assets are made up, directly or indirectly, at least 50% of real property situated in Spain are deemed to be situated in Spain for Wealth Tax purposes, so a non-resident individual holding them is taxable in Spain by obligación real on those shares; for the computation, net book values are replaced by market values and real property by the values that serve as base for the tax (art. 5.Uno.b of Ley 19/1991). And if the shareholder is tax resident in Spain, the shares are foreign assets: rights representing participation in any type of legal entity situated abroad are reportable on form 720 by their holders and beneficial owners, above the thresholds and with the exceptions set in art. 42 ter of Real Decreto 1065/2007. The structure that was supposed to keep the villa off the Spanish radar puts the shareholder squarely on it.
Why the Costa Blanca was sold this structure
The sales pitch of the 1990s and 2000s was coherent on its own terms. Spanish inheritance tax on a villa passing to non-resident children looked frightening; transfer tax on each resale of the property looked heavy; and the Spanish land register would show a company name rather than a family one. Move the villa into an offshore company, the argument went, and the property never changes hands again: you sell the shares abroad, the register never moves, and the Spanish succession is avoided because there is nothing in Spain to inherit.
Each leg of that argument has since been closed. Gains arising, directly or indirectly, from real property situated in Spain are Spanish-source income, and the article says so expressly for gains derived from rights or shares in an entity, resident or not, whose assets consist mainly, directly or indirectly, of real property situated in Spain, and for shares that give their holder the right of enjoyment over Spanish property (art. 13.1.i).3.º TRLIRNR). Selling the company therefore triggers Spanish tax on the gain, taxed at 19% (art. 25.1.f).3.º). Where the entity is resident in a territory with no effective exchange of information, the transfer value is determined proportionally to the market value of the Spanish property at the time of the transfer (art. 24.4), and the Spanish property itself remains affected to payment of the tax (art. 25.3).
What remained, and grew, was the cost of holding: the 3% levy every year, the representative obligation, the Wealth Tax exposure of the shareholder, the reporting obligation of a Spanish-resident shareholder, and the annual cost of keeping a foreign company alive — registered agent, accounts, directors. Families who inherited these structures from the person who set them up usually discover all of it at once, in the worst possible week.
Getting out: the three routes and what each one wakes up
Route one is to establish that no levy is due. That means checking, year by year, whether the entity was resident in a jurisdiction on the Order in force for that year, and whether any letter of art. 42 applies with the evidence the regulation requires. This is documentary work, and it is the cheapest outcome by a wide margin, because it triggers no transfer of the property and therefore no transfer taxes. It is also the route with a deadline effect: while the years are running, some of them are prescribing and others are not.
Route two is to move the company. Bringing the effective place of management or the registered office of a company to Spain is a taxable event for the corporate operations charge of transfer tax where neither was previously situated in an EU Member State (art. 19.1.3.º of the consolidated ITP and AJD Act) — and that same operation is expressly exempt (art. 45.I.B.11). Moving the effective management or registered office of a company from one EU Member State to another is not subject at all (art. 19.2.2.º). The transfer taxes are therefore not the obstacle on this route; the obstacles are corporate and accounting law in both jurisdictions, and what becomes of the company once it is Spanish — a Spanish-resident company pays Spanish corporate income tax on its results and no longer falls under art. 40.
Route three is to unwind: dissolve the company and adjudicate the villa to the shareholders. The dissolution of a company is a corporate operation subject to transfer tax (art. 19.1.1.º), in which the taxpayers are the members for the assets and rights they receive (art. 23.b), the base is the value of the assets delivered to them without deducting expenses or debts (art. 25.4), and the state rate for the corporate operations charge is 1% (art. 26). Independently of that, the entity is transferring Spanish real property, which produces a gain taxed at 19% (art. 25.1.f).3.º), and a transfer of urban land triggers the plusvalía municipal at the town hall (arts. 104 and 106 TRLRHL — note that the rule making the acquirer the substitute taxpayer applies where the transferor is a non-resident individual, not an entity). Which of these actually bite, and in what amount, depends on the company, the jurisdiction, the numbers in the deeds and the ordinance of the municipality: this is a case to be quoted, not estimated from an article.
Watch out
Do not unwind a structure to save the 3% without pricing the exit first. A dissolution can cost more in one year than the levy would in ten — or far less, if the property has not appreciated. The order of work is always: establish the years due, then price each route.
What to do before the next 31 December
Start with three documents: the certificate of incorporation and current standing of the entity, showing its jurisdiction of residence; the deed by which the entity acquired the Spanish property, or the right over it; and the latest IBI receipt, which gives the cadastral value the levy is computed on. With those, the annual liability is arithmetic, and the number of open years is a matter of counting back four years from each January deadline.
Then decide before the year end, not after it. The levy accrues on 31 December, so an entity that completes a restructuring in December owes nothing for that year, while one that completes it in January has already accrued another 3%. That single date is often worth more than any argument about the exemptions.
If years are open, regularising them voluntarily before any demand is materially cheaper than being found: the art. 27 surcharge replaces the penalty, and it grows month by month. Our IRNR service handles the filings and the exposure calculation, our fiscal representative service covers the appointment obligation for entities resident in territories without effective exchange of information, and the imputed income service deals with what the individual owner owes once the property is held in a personal name again.
Step-by-step
How to deal with a Spanish property held by a non-resident entity
Establish where the entity is resident
Obtain a certificate of incorporation and good standing and, where it exists, a tax residence certificate. Residence of the entity, not of the shareholders, is what art. 40 turns on.
Check the jurisdiction year by year
Compare that residence against the Ministerial Order in force for each open year. The list is updated, so the answer can differ between years; do not rely on a list published in an article.
Read the cadastral value off the IBI receipt
The base is the cadastral value of the property (art. 41.1 TRLIRNR). Where there is none, apply the Wealth Tax valuation rules (art. 10.Uno of Ley 19/1991). Multiply by 3% and by the entity’s share in the title.
Test the art. 42 exemptions honestly
Foreign State or public institution, a listed company, or a continuous economic activity in Spain distinguishable from mere holding or letting, on the terms set by regulation. Letting the villa is not enough.
Count the open years
Each year prescribes four years after its January filing deadline (arts. 66 and 67 LGT). List the years still live and the surcharge each would carry under art. 27 LGT if regularised voluntarily.
Regularise before any demand arrives
File the outstanding returns for the open years. A voluntary late filing carries the art. 27 surcharge and excludes the penalty; a demand first brings the art. 28 executive surcharges and the art. 191 infringement.
Appoint the representative if it is required
An entity resident in a territory without effective exchange of information holding Spanish assets must appoint a representative resident in Spain; the fine for not doing so is 6,000 euros for those taxpayers (art. 10.1 and 10.4 TRLIRNR).
Price each exit before choosing one
Quote the dissolution, the redomiciliation and the do-nothing scenario over the same horizon, with the transfer taxes, the gain and the plusvalía on the table, and complete the chosen route before 31 December.
| Element | Rule | Article |
|---|---|---|
| Taxable person | Entities resident in a country or territory considered a tax haven — today, a non-cooperative jurisdiction — owning or holding by any title Spanish property or real rights of use over it | Art. 40 |
| Base | Cadastral value; where there is none, the value under the Wealth Tax rules; proportional share where co-owned | Art. 41 |
| Exemptions | Foreign States, public institutions and international organisations; entities with an economic activity distinguishable from mere holding or letting; listed companies | Art. 42 |
| Rate | 3%, flat, with no reduction for part of a year | Art. 43 |
| Deductibility | Deductible expense for the base of the tax that would correspond under the preceding articles of the Act | Art. 44 |
| Accrual and filing | Accrues on 31 December; declared and paid in the following January (AEAT form 213) | Art. 45.1 |
| Enforcement | Collection procedure against the property; the certificate of the expired voluntary period is sufficient title | Art. 45.2 |
| On a later transfer | The transferred property remains affected to payment of the levy | Art. 45.3 |
| Route | What it involves | Taxes that come into play |
|---|---|---|
| Prove no levy is due | Check the jurisdiction against the Order in force for each year; document a letter of art. 42 with the evidence the regulation requires | None on the property; only the filings and surcharges of any years actually due |
| Redomicile the company | Move the effective management or registered office, typically to Spain or to an EU Member State | Corporate operations charge on an inbound transfer, expressly exempt (arts. 19.1.3.º and 45.I.B.11 ITP and AJD); ordinary Spanish corporate taxation afterwards |
| Dissolve and adjudicate | Liquidate the entity and put the property in the members’ names | Corporate operations charge payable by the members (arts. 19.1.1.º, 23.b, 25.4, 26); non-resident tax on the gain at 19% (art. 25.1.f); plusvalía municipal (arts. 104 and 106 TRLRHL) |
| Do nothing | Keep holding through the entity | 3% of cadastral value every 31 December, plus surcharges, interest and enforcement against the property |
FAQ
Frequently asked questions
My villa in Torrevieja is owned by a company. Do I pay the 3% levy?
Only if the company is resident in a country or territory that has the consideration of a tax haven, read today as a non-cooperative jurisdiction (art. 40 TRLIRNR). An ordinary company resident in an EU Member State or in a treaty country is outside art. 40 and owes no special levy, although it still owes the ordinary non-resident tax on any income from the property. The question is always about the residence of the entity in the year concerned, checked against the Ministerial Order in force, and never about your own nationality or residence.
Is the 3% charged on the market value or on the cadastral value?
On the cadastral value of the property (art. 41.1 TRLIRNR). It is the same figure that appears on the IBI receipt, which normally sits well below market value. Where the property has no cadastral value, the base is the value determined under the Wealth Tax rules, which take the greatest of the cadastral value, the value determined or verified by the Administration for other taxes, and the acquisition price (art. 10.Uno of Ley 19/1991).
The company only owns half the villa. Is the levy halved?
Yes, in proportion to the share held. Where an entity holds the property together with other persons or entities, the levy is payable on the part of the value that corresponds proportionally to its share in the title (art. 41.2 TRLIRNR). The other half is outside the special levy, though a non-resident individual holding it will have imputed income of their own under the ordinary IRNR rules.
Which return do I file, and when?
The levy accrues on 31 December and must be declared and paid in the following January (art. 45.1 TRLIRNR); AEAT provides form 213 for it. The statute leaves the place and form of filing to regulation, so confirm the current form and filing channel with AEAT or with your adviser before filing, especially if you are regularising several years at once, since each year is a separate self-assessment.
Does the special levy replace the ordinary non-resident tax on rent?
No. They are independent and both apply. The special levy taxes the mere holding of the property at 3% of cadastral value; if the property is let, the entity also owes ordinary non-resident income tax on the rent, computed on the gross amount without deducting expenses for entities that are not resident in the EU or in a qualifying EEA State (arts. 24.1 and 24.6 TRLIRNR), at the general rate of 24% (art. 25.1.a). There is no credit of one against the other; the levy is only a deductible expense in the narrow sense of art. 44.
Does letting the villa out make the company exempt under art. 42?
No — letting is precisely what the exemption excludes. Art. 42.b) exempts entities that carry on in Spain, on a continuous or habitual basis, economic activities distinguishable from the mere holding or letting of the property, in accordance with what is laid down by regulation. Holiday letting of the same villa is not distinguishable from letting it; a genuine hotel, aparthotel or trading business run from the property is a different case, and the evidence required is set in the implementing regulation.
Can the Spanish tax office go against the property itself?
Yes, and that is the sharpest feature of this levy. Failure to self-assess and pay in January gives rise to enforcement by the collection procedure against the real property, with the administration certificate of the expired voluntary period as sufficient title to start it (art. 45.2 TRLIRNR). In addition, where an entity subject to the levy transfers Spanish real property, the transferred property remains affected to payment of the levy (art. 45.3), which is why the amount is retained at the notary on these purchases.
The company has never filed. How many years can they claim?
Each annual liability has its own four-year limitation period, counted from the day after the end of the January filing period for that year (arts. 66 and 67 LGT). So the oldest years drop away one by one while the more recent ones stay live, and the total exposure moves every January. Filing late but before any demand costs the art. 27 LGT surcharge — 1% plus 1% per complete month, or 15% plus interest after twelve months — and excludes the penalty; being found first brings the executive surcharges of art. 28 and the infringement of art. 191.
Is the levy at least deductible somewhere?
Only against the entity’s own Spanish non-resident tax base, and in most cases that is worth nothing. Art. 44 TRLIRNR makes the amount a deductible expense in determining the base of the tax that would correspond under the preceding articles of that Act, but an entity resident in a listed jurisdiction operating without a permanent establishment is taxed on gross income with no expenses deductible (arts. 24.1 and 24.6). The deduction has real content only where there is a permanent establishment computing its base under corporate income tax rules (art. 18.1).
Can I sell the shares of the company instead of the property?
You can, but Spain taxes that sale. Gains derived from rights or shares in an entity, resident or not, whose assets consist mainly, directly or indirectly, of real property situated in Spain are Spanish-source income (art. 13.1.i).3.º TRLIRNR), taxed at 19% (art. 25.1.f).3.º). Where the entity is resident in a territory with no effective exchange of information, the transfer value is determined proportionally to the market value of the Spanish property (art. 24.4), and that property remains affected to payment of the tax (art. 25.3) — so the buyer inherits the problem.
What does it cost to dissolve the company and hold the villa personally?
It depends on the company, the jurisdiction and the numbers, and it should be quoted rather than estimated. The taxes that come into play are the corporate operations charge of ITP and AJD on the dissolution, payable by the members on the value of the assets received (arts. 19.1.1.º, 23.b, 25.4 and 26 of the consolidated ITP and AJD Act); non-resident income tax on the entity’s gain at 19% (art. 25.1.f).3.º TRLIRNR); and the plusvalía municipal at the town hall on the transfer of urban land (arts. 104 and 106 TRLRHL). Corporate and registry costs in the company’s own jurisdiction sit on top.
Does the company still need a fiscal representative in Spain?
If it is resident in a territory with no effective exchange of tax information and holds assets situated in Spain, yes — the mere holding triggers the obligation to appoint a representative resident in Spain before the end of the filing period (art. 10.1 TRLIRNR). Not appointing one is a serious infringement carrying a fixed fine of 2,000 euros, rising to 6,000 euros for taxpayers resident in those territories (art. 10.4), and the Administration may then treat the depositary or manager of the assets as the representative (art. 10.3).
Sources
- BOE — TRLIRNR, Real Decreto Legislativo 5/2004 (arts. 40-45: special levy; arts. 9, 10, 13, 24, 25)
- BOE — Ley 11/2021 on the prevention of tax fraud (rewrites DA 1.ª and adds DA 10.ª of Ley 36/2006: non-cooperative jurisdictions)
- BOE — Ley 19/1991, Wealth Tax (art. 5: obligación real; art. 10: valuation of real property)
- BOE — Consolidated ITP and AJD Act, Real Decreto Legislativo 1/1993 (arts. 19, 23, 25, 26 and 45.I.B.11)
- BOE — TRLRHL, Real Decreto Legislativo 2/2004 (arts. 104-106: plusvalía municipal)
- BOE — Ley 58/2003, General Tax Act (arts. 27, 28, 66, 67 and 191)
- AEAT — Non-residents: returns, deadlines and filing channels
Last updated: 2026-09-10