7.4.6.5. Reduction of irregular returns

Net income from real estate capital will be reduced by 30% when any of the following circumstances occur:

1. When they have a generation period greater than two years

   If the income is received in installments, the 30% reduction will only be applicable if the quotient resulting from dividing the number of years corresponding to the generation period, computed from date to date, by the number of tax periods of installment, is greater than two (art. 15. 2 Rgl.).

2. When they are classified by regulation as having been obtained in a notoriously irregular manner over time.

   The following are considered to be income from movable capital obtained in a notoriously irregular manner over time, exclusively, when they are imputed in a single tax period (art. 15.1 Rgl.):

   • Amounts obtained from the transfer or assignment of the lease contract for business premises.

   • Compensation received from the tenant, subtenant or assignee for damage or defects in the property.

   • Amounts obtained from the creation or transfer of lifelong rights of use or enjoyment of real estate.

   IMPORTANT: This reduction will only apply to the amount of net income that does not exceed 300,000 euros.

Note: Normally the reduction should be recorded without any sign. However, when the reduction affects a negative net return, it will be recorded preceded by a minus sign (-).