New regulations for 2025

Main tax changes introduced by Law 6/2025, of July 28, amending Law 19/1994, of July 6, amending the economic and tax regime of the Canary Islands, for the regulation of investments in assets related to the rental of housing in the Canary Islands.

CORPORATION TAX

The sole article of Law 6/2025, of July 28, introduces the following modifications in sections 1, 4, 5 and 8 of article 27, and incorporates a new Additional Provision fifteenth in Law 19/1994, of July 6, modifying the Economic and Fiscal Regime of the Canary Islands, with effect for tax periods beginning on or after January 1, 2025.

• Amendment to sections 1, 4, 5 and 8 of article 27 of Law 19/1994.

  • HE modifies section 1 of article 27, of Law 19/1994, introducing the possibility that lthe entities whose main activity is the provision of financial services or the provision of services to entities belonging to the same group of companies, can enjoy the reduction, by reserve for investments, when they materialize the amounts intended for the reserve in the investments provided for in the letter D number 3rd of the fourth section of said article 27, of Law 19/1994, (financial instruments issued by financial institutions provided that the funds raised for the purpose of realizing the Reserve are used to finance private projects or public-private partnerships in the Canary Islands, whose investments are eligible in accordance with the provisions of this article, provided that the issues are supervised by the Government of the Canary Islands, and have a binding report from the State Tax Administration Agency).

    On the other hand, financial institutions They may only materialize their provisions in the financial instruments referred to in number 3 of letter D of section 4 of article 27, of Law 19/1994, when the project to be financed can be classified as investments provided for in letters A or B of section 4 of article 27, of Law 19/1994.

  • HE modifies section 4, letters A and C of article 27 of Law 19/1994, replacing the expression “housing for tourist purposes” by “holiday accommodation, as this non-hotel modality is regulated in Decree 142/2010, of October 4, which approves the Regulation of the Tourist Accommodation Activity and modifies Decree 10/2001, of January 22, which regulates tourism standards, and in Decree 113/2015, of May 22, which approves the Regulation of holiday homes in the Autonomous Community of the Canary Islands.”

    Likewise, in the event of materialization, from the investment reserve, in initial investments of letter A, or that cannot be considered as an initial investment because it does not meet any of the conditions established in said letter A (letter C), consisting of the Promotion of protected housing for rental purposes, it is incorporated that the investment will be eligible even when a public entity, body or organization intervenes in the effective formalization of the lease by acting as an intermediary between the taxpayer and the effective tenant.

    In the case referred to in the point 3 of letter D of section 4 of article 27 of Law 19/1994, of materialization from the investment reserve by subscribing to any financial instrument issued by financial institutions as long as the funds raised are intended for the financing of private projects in the Canary Islands, the possibility is added that the funds raised be used to finance public-private collaboration projects.

  • HE modifies section 5 letter d) of article 27 of Law 19/1994, establishing itself that They will be understood to be located and used in the archipelago computer applications and industrial property rights, which are not mere distinctive signs of the taxpayer or its products, and that are to be applied exclusively in production processes or commercial activities carried out within the Canary Islands, as well as intellectual property rights that are subject to reproduction and distribution exclusively within the Canary Islands.

  • HE modifies section 8 of article 27 of Law 19/1994, stating that when it comes to the Lease of protected housing by the developer company and a public entity, body or organization intervenes in the formalization and management effective lease performing an intermediation between the taxpayer and the effective lessee, said lease will in all cases be considered as economic activity when the taxpayer has a person employed with a full-time employment contract for said exploitation.

  (Sections 1, 4, 5 and 8 of Article 27 of Law 19/94 are amended by the sole article of Law 6/2025)

• Incorporation of Additional Provision Fifteenth in Law 19/1994.

  With effects for the tax periods starting on or after January 1, 2025, a is incorporated new Additional Provision fifteenth to Law 19/1994, with the purpose of regulate investments in assets related to the housing rental activity in the following terms:

  • The reserves for investments in the Canary Islands endowed charged to profits from financial years beginning before or after January 1, 2025, may be realized, respecting the maximum materialization period, through investments in assets related to the housing rental activity.

  • You will have the consideration of economic activity of housing rental that exploitation for whose development there is a person employed with a full-time employment contract.

  • The amounts allocated to the reserve for investments in the Canary Islands may materialize in real estate located in the Canary Islands, provided that they are used in a novel way rental of housing, with or without option to purchase, and there is no direct or indirect link with the tenant under the terms defined in section 2 of article 18 of the LIS, for the purposes of considering the existence of initial investments.

  • For these purposes, housing will be understood as the building or part of it, of a private nature, intended for the residence and habitation of people, when it is used for that purpose in an effective, continuous and stable manner by the tenant, constituting his habitual residence. Those excluded by Article 5 of Law 29/1994, of November 24, on Urban Leases, will not be considered residential leases. It will be understood that the leasing of housing takes place in a novel way when the acquired property has not been transferred under said regime within the year prior to the acquisition date.

  • It will be an essential requirement that the property is effectively rented within 6 months from the date of its acquisition or its completion in habitable conditions. He failure to comply with the deadline of six months for the effective start of the rental of housing will have the consequences provided for in section 16 of article 27 of Law 19/1994.

  • It will be understood that the dwelling is effectively rented from the date stated in the lease agreement. In order to prove this date, proof of effective collection of the amounts due from the landlord upon signing the contract must be provided, including, in any case, the amounts corresponding to the payment of the first two monthly installments.

  • In the case of taxpayers who do not meet the conditions of Article 101 of Law 27/2014, of November 27, on Corporate Tax, In the tax period in which the profit from which the reserve is allocated is obtained, the reserve may only be realized through investment in used properties intended for housing rental when have not previously benefited from:

    • of the regime described in these paragraphs,

    • of the general regime regulated in article 27 of Law 19/1994, provided that it corresponds to provisions that have been made from profits obtained in tax periods starting on or after January 1, 2021,

    • nor from the deduction regime for investments in the Canary Islands.

  • It will be suitable materialization of the reserve by making the investments indicated in section 3 of this fifteenth provision, referred to above, of Law 19/1994, in those cases in which cannot be considered initial investments because it was not carried out as a result of the creation or expansion of an establishment, or the substantial diversification or transformation of production, whenever the assets are allocated to the development of the housing leasing activity.

  • It will be possible materialize the reservation by carrying out investments in job creation directly related to investments provided for in this Fifteenth Additional Provision of Law 19/1994, provided that the conditions established in letters B or B bis of section 4 of article 27 of Law 19/1994 are met.

  • Likewise, the reserve may be realized through the subscription of shares or participations in the issued capital by companies as a result of their incorporation or capital increase that carry out their activity in the archipelago, when such entities make investments related to the development of housing rental in the terms provided for in this Fifteenth Additional Provision and in letter D 1 of section 4 of article 27 of Law 19/1994.

  • For the purpose of determining the materialization amount, The provisions of section 6 of article 27 of Law 19/1994 shall apply.

  • Regarding the compliance with the investment's operating period will begin to be computed at the beginning of the effective lease. However, the transfer will not be deemed interrupted if the same dwelling is leased again within six months of vacating the dwelling. In this case, the maintenance period for the investment affecting economic activity will be extended for a period equivalent to the period during which the property would have been unoccupied.

  • The Personal Income Tax payers that determine their net returns using the method of direct estimate may enjoy the reserve regime for investments in the Canary Islands, provided that they meet the requirements of Article 27 and the Fifteenth Additional Provision of Law 19/1994.

  • In all matters not expressly regulated in this Additional Provision, the provisions of Article 27 of Law 19/1994 shall apply.

    In particular, the incompatibility regime provided for in section 12 of the aforementioned article 27 is applicable, which prevents the simultaneous application of the RIC and other tax benefits on the same assets and expenses subject to investment.

de modificación de la Ley 19/1994, de 6 de julio, de modificación del Régimen Económico y Fiscal de Canarias, para la regulación de las inversiones en elementos patrimoniales afectos a la actividad de arrendamiento de vivienda en las Islas Canarias.(BOE, 29-julio-2025)