Tax & Private Clients

Residential SOCIMIs: the new 25% special levy on undistributed profits

Marta Batalla Eguidazu ·

Information updated as at 15 October 2026

Article 9 of Royal Decree-Law 29/2026, of 6 October (“RDL 29/2026”), amends Law 11/2009, of 26 October, regulating Listed Real Estate Investment Companies (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario, the “SOCIMI Law”) to raise to 25% the special levy on undistributed profits derived from residential letting1. The measure already applies to tax periods beginning in 2026 that had not ended when it came into force.

The amendment builds on a regime that, since 2021, had already imposed a 15% levy on the portion of undistributed profits that had not been taxed at the standard corporate income tax rate. What is new is a specific rate for the residential business and two reductions linked to affordable rental housing.

Key points

  • 25% levy. On undistributed profits derived from the letting or assignment of use of residential property, including tourist and short-term accommodation.
  • 15% levy. Maintained for other undistributed profits that have not been taxed at the standard rate.
  • 50% reduction. Where more than 80% of the SOCIMI’s residential rental portfolio is let as affordable housing.
  • 100% reduction. Where, in addition, the undistributed profit is reinvested within three years in affordable rental housing.
  • Transitional rule. The required proportion of affordable housing is more than 60% for tax periods beginning in 2026 and more than 70% for those beginning in 2027.

I. What a SOCIMI is and how it has been taxed until now

A SOCIMI (sociedad anónima cotizada de inversión en el mercado inmobiliario) is a company whose main activity is acquiring real estate, mainly homes, offices or commercial premises, in order to let it. Its shares are listed on a regulated market or traded on a multilateral trading facility, which allows any investor to take part in a property portfolio without acquiring the properties directly. It is the Spanish equivalent of the REITs found in other countries.

Its tax regime is based on a trade-off: the company pays virtually no tax on its profits and, in return, is required to distribute most of them to its shareholders, who pay tax when they receive the dividends. In other words, taxation shifts from the company to the investor.

Specifically, SOCIMIs that meet the legal requirements are taxed under corporate income tax at a rate of 0%. In return, each year they must resolve to distribute as dividends at least the following proportions of their profits2:

  • 100% of the dividends the SOCIMI receives from other companies in which it holds an interest, such as other SOCIMIs.
  • At least 50% of the profits obtained on the sale of properties or shareholdings used in its business. The remainder must be reinvested in other properties or shareholdings within three years and, if it is not reinvested, must also be distributed.
  • At least 80% of all other profits, which in practice derive mainly from rental income.

For example, if in a given year a SOCIMI makes a profit of €1,000,000 from rents and €400,000 from the sale of a building, it must distribute at least €800,000 of the former and €200,000 of the latter, and reinvest the other €200,000 from the sale within three years. It may retain the remaining €200,000 of rental profit within the company.

The system is completed by two special levies, payable by the SOCIMIs themselves, designed to prevent these profits from going untaxed altogether:

  • Undistributed profits: 15% since 2021. Until then, profits that a SOCIMI chose not to distribute above the minimum thresholds were taxed neither at company level nor in the hands of its shareholders. Law 11/2021, of 9 July, on measures to prevent and combat tax fraud, introduced a 15% levy on such retained profits, provided that they derived from income that had not been taxed at the standard corporate income tax rate and that they were not set aside for reinvestment3. In the example above, the €200,000 of undistributed rental profit would give rise to a levy of €30,000.
  • Dividends to shareholders paying little or no tax: 19%. Where a SOCIMI distributes dividends to a shareholder holding at least 5% of its share capital who pays no tax on them, or pays less than 10%, for example because they are resident in a low-tax jurisdiction, the SOCIMI must pay 19% of the dividend distributed to that shareholder4.

It is the first of these levies, the 15% levy on undistributed profits, that RDL 29/2026 raises to 25% where the profits derive from the residential business.

II. The new levy on the residential business

RDL 29/2026 now distinguishes between two rates within the special levy on undistributed profits:

  • 25% on the portion of undistributed profits derived from the letting or assignment of use of residential property, including tourist and short-term lettings, accommodation and lodging, provided that such income has not been taxed at the standard rate and is not subject to the reinvestment period.
  • 15% on other undistributed profits meeting the same conditions, as was previously the case.

The difference can be seen in the example above. If the €200,000 of profit retained by the SOCIMI derives from residential lettings, the levy rises from €30,000 (15%) to €50,000 (25%). If it derives from letting offices or commercial premises, it remains €30,000. A SOCIMI holding both types of property must split its retained profits according to their source and apply the corresponding rate to each part.

As with the 15% levy, the 25% levy is paid by the SOCIMI itself, not by its shareholders, and applies only to the profits the company decides not to distribute. Profits distributed as dividends do not bear this levy: they are taxed in the hands of the shareholder on receipt.

The legislation also includes specific rules on calculation, consolidation and valuation, and only housing located in Spain is taken into account for the portfolio tests.

III. Reductions linked to affordable rental housing

The 25% levy may be reduced in two stages. It is reduced by 50% where homes let at affordable rents account for more than 80% of the SOCIMI’s total residential rental portfolio. It is reduced by 100% where, in addition, the undistributed profit is reinvested within three years in homes intended for affordable rental.

Continuing with the same example, if the SOCIMI retains €200,000 of profit derived from residential lettings:

  • No reduction. If 80% or less of its rental homes are affordable, it pays 25%: €50,000.
  • 50% reduction. If more than 80% are affordable, the levy is halved to €25,000, equivalent to an effective rate of 12.5%.
  • 100% reduction. If, in addition, it reinvests that €200,000 in affordable rental housing within three years, no levy is payable.

During the first two years, the required proportion is lower: more than 60% for tax periods beginning in 2026 that had not ended when RDL 29/2026 came into force, and more than 70% for those beginning in 2027.

Affordable housing is defined in RDL 29/2026 itself as housing whose sale price or rent, including associated costs, does not exceed 30% of the median income of households in the municipality where it is located. In the case of rentals, charges for ancillary units such as parking spaces or storage rooms may not increase that price5.

By way of a hypothetical example, in a municipality where the median annual household income was €36,000, a home would be considered affordable if its annual rent, including associated costs, did not exceed €10,800, that is, €900 per month. As median income varies from one municipality to another, so does the affordability threshold.

IV. Other references to SOCIMIs in RDL 29/2026

RDL 29/2026 creates the Financia Europa Savings and Investment Account and the Financia Europa Individual Long-Term Savings Insurance, two new savings products for individuals with a specific tax treatment, designed to channel savings into investment in companies.

Shares in SOCIMIs and in similar foreign entities are expressly excluded from the assets in which both products may invest. Nor may the eligible collective investment undertakings invest in them, except to replicate a benchmark index. In practice, those who save through these products will not be able to invest those savings in SOCIMI shares, either directly or through funds, other than index-tracking funds.

V. Entry into force and validation

The amendment to the SOCIMI Law applies to tax periods beginning on or after 1 January 2026 that had not ended on 8 October 2026.

The special levy accrues on the date on which the general shareholders’ meeting resolves on the allocation of the year’s profit, and must be self-assessed and paid within the following two months6. For a SOCIMI whose financial year coincides with the calendar year, the 2026 profit will be distributed or retained by resolution of the meeting held in 2027, and that is when the levy, where applicable, will accrue at its new rate.

RDL 29/2026 is pending validation (convalidación) by the Standing Committee (Diputación Permanente) of the Congress of Deputies, since Parliament has been dissolved ahead of the general election. If it is not validated within thirty days of its enactment, it will be repealed.

Loyra Abogados remains at the disposal of its clients to answer any questions or provide further information.

  1. Official State Gazette no. 249, of 7 October 2026. RDL 29/2026 is pending validation by the Standing Committee of the Congress of Deputies. ↩︎
  2. Article 6.1 of the SOCIMI Law. ↩︎
  3. Article 9.4 of the SOCIMI Law, as worded before RDL 29/2026. ↩︎
  4. Article 9.2 of the SOCIMI Law. ↩︎
  5. Article 14 of RDL 29/2026. ↩︎
  6. Article 9.4 of the SOCIMI Law. ↩︎

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