Published: 05-11-2026
Royal Decree-Law 29/2026 of 6 October, in force since 8 October, amends Article 85 of the Personal Income Tax Act (Ley del IRPF). As from 1 January 2027, the flat percentage applied to the cadastral value of each property will be replaced by a progressive scale applied to the aggregate cadastral value of all of the taxpayer’s properties subject to imputation. The change will chiefly affect owners of second homes and vacant properties.
What Is Imputed Real Estate Income?
Urban properties that do not constitute the owner’s main residence, are not let and are not used in an economic activity give rise, for Personal Income Tax purposes, to deemed income. Until now, this income has been equal to 2% of the cadastral value of each property, or 1.1% where the municipality’s cadastral values have been revised with effect from 2012.
Tax Year 2026: The Current System Remains in Place
With effect from 1 January 2026, the 1.1% rate has been extended for properties located in municipalities whose revised cadastral values came into force on or after 1 January 2012. Accordingly, for the 2026 Personal Income Tax return, to be filed in 2027, the calculation method remains unchanged.
New Progressive Scale from 2027
The imputed income will be calculated by applying the following percentages to the aggregate cadastral value:
- Up to EUR 100,000: 1.1%.
- From EUR 100,000 to EUR 500,000: 1.5% on the excess (EUR 1,100 accumulated for the first bracket).
- From EUR 500,000 to EUR 1,000,000: 2% on the excess (EUR 7,100 accumulated).
- Over EUR 1,000,000: 3% on the excess (EUR 17,100 accumulated).
The distinction between municipalities with and without revised cadastral values will disappear. For example, a taxpayer with two vacant homes with a combined cadastral value of EUR 600,000 would see the imputed income rise from EUR 6,600 (1.1%) to EUR 9,100, an increase of approximately 38%.
Computation Rules
- The cadastral value of each property is computed in proportion to the number of days in the tax period during which the relevant requirements are met.
- Where a property has no cadastral value, or its cadastral value has not been notified, 50% of the higher of the value assessed by the Tax Administration for the purposes of other taxes and the acquisition price or value will be taken instead.
- No income is imputed for properties under construction or for properties that cannot be used for town-planning reasons. The main residence and undeveloped land remain excluded.
Effects on Transfers to Family Members and Non-Residents
- Transfers of use or leases to family members: from 2027, where a property is made available or let to the taxpayer’s spouse or to relatives up to the third degree, the net income may not be lower than the result of applying to the cadastral value the taxpayer’s average effective imputation rate, calculated under the new scale.
- Non-residents: the income imputed to non-resident owners of urban properties in Spain that are not let is determined in accordance with Personal Income Tax rules; the new scale will therefore also apply to them.
A Measure Pending Ratification
Royal Decree-Law 29/2026 reproduces the tax provisions of Royal Decree-Law 26/2026, which was repealed on 2 October after failing to be ratified by the Spanish Congress. At the time of writing, ratification of the new Decree-Law remains pending; the new scale could therefore lapse before it comes into force.
Conclusion
The reform may increase the tax burden on substantial real estate holdings that are not let. Should the Royal Decree-Law be ratified, it would be advisable to quantify its impact and review property portfolios before 1 January 2027, considering alternatives such as letting, restructuring ownership or reviewing arrangements with family members.
If you own second homes or properties in Spain that are not let, Gentile Law has a team specialising in wealth and real estate taxation, ready to quantify the impact of the new scale and to plan your assets before it comes into force.
Contact:
Ana García Ginés
Senior Tax Associate at Gentile Law
+34 604 51 21 60
Ana Urkia Alcázar
Paralegal at Gentile Law