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Practical Income Manual 2022.

Concept and requirements of the imputation of real estate income


Imputed real estate income is considered to be income that the taxpayer must include in his tax base because he is the owner or holder of a real right of enjoyment over real estate that meets the requirements listed below. continuation.

The ownership of a real right of use by shift over urban real estate also generates imputed real estate income, in the terms that are also discussed below.

In both cases, they must be properties that do not generate capital returns or are used for economic activities .

Note: The granting of the right to use parking spaces for residents does not generate the imputation of real estate income, as said concession does not constitute a real right.

Requirements for the imputation of real estate income

The imputation of real estate income is conditional on the properties from which said presumed income derive meet the following requirements:

  • That they are urban real estate qualified as such in article 7 of the consolidated text of the Real Estate Cadastre Law, approved by Royal Legislative Decree 1/2004, of March 5 ( BOE of March 8), not affected by economic activities.

  • That they are rustic properties with constructions that are not essential for the development of agricultural, livestock or forestry operations, not affected by economic activities.

    The concept of heritage elements assigned to economic activities is discussed in Chapter 6.

  • That do not generate returns on capital . Capital returns may derive from the leasing of real estate, businesses or mines or from the constitution or transfer of rights or powers of use or enjoyment over real estate.

    Capital returns are discussed in Chapter 4 (Returns on real estate capital) and Chapter 5 (Returns on movable capital) of this manual

    Keep in mind that real estate that is not leased or subleased, but is intended to be so (properties expected to be rented), generates imputation of real estate income. Supreme Court ruling of February 25, 2021, issued in cassation appeal no. 1302/2020 (RED: STS 910/2021).

    Unlike the above, when the property is subject to the development of the leasing economic activity exclusively, there will be no obligation to allocate real estate income, even if part of the tax period the property is not leased, but is in expectation of rent. .

  • That do not constitute the taxpayer's habitual residence . For these purposes, it is understood that the parking spaces acquired jointly with the property up to a maximum of two are part of the taxpayer's habitual residence.

    The imputation of real estate income provided for in article 85 of the Personal Income Tax Law for the family home (of which both spouses are 50% owners) is also not applicable, when in case of separation , annulment and divorce, its use, in accordance with article 96 of the Civil Code, is attributed by the judicial authority to the former spouse and, where appropriate, to the children in whose company they remain, even if this does not constitute the habitual residence of the other parent.

  • That it is not unbuilt land, properties under construction or properties that, for urban planning reasons, are not susceptible to use .

    In the case of an empty property illegally occupied by third parties against the will of the owner, and once an eviction procedure has been initiated by the owner of the property and provided that it is duly accredited, it is considered that the imputation of income is not appropriate. real estate from the moment said procedure was initiated, without having to wait for its resolution.

Remember: The income imputation regime does not take into account the effective use of the second home but rather its availability in favor of its owner, limiting the Personal Income Tax Law to the cases in which not applicable the imputation of real estate income only to the following: affectation of the property to an economic activity, that the property generates capital returns, that it is under construction and that it is not susceptible to use for urban reasons.