New TEAC doctrine: how the allocation of property income will affect taxpayers under the special regime for expatriates (Beckham Law)

The Central Economic-Administrative Court (TEAC) has established criteria in a ruling with significant implications for taxpayers covered by the special regime for workers, professionals, entrepreneurs and investors relocated to Spanish territory (Article 93 of the Personal Income Tax Law). The new criteria determine that the primary residence located in Spain does generate imputed property income.

Context

In its ruling of 17 July 2025, the TEAC upheld an appeal for the unification of criteria filed by the AEAT, resolving an issue that had given rise to differing criteria among economic-administrative courts and high courts of justice.

The controversy arose when a taxpayer covered by the impatriate regime disputed the attribution of real estate income corresponding to her habitual residence in Spain, arguing that Article 85 of the Personal Income Tax Law excludes such residence from the obligation to attribute income for personal income tax purposes.

However, the AEAT maintained that impatriates, despite retaining their status as personal income tax payers, must determine their tax liability in accordance with the rules of the IRNR (Non-Resident Income Tax Law) and therefore apply Article 13.1.h) of the IRNR Law, which does subject imputed income derived from urban properties not used for economic activities to tax, with no exception for primary residences.

What criteria does the TEAC establish?

The TEAC expressly resolves the legal issue raised and concludes that taxpayers covered by the special regime must declare property income for their primary residence located in Spain. The Court bases this conclusion on the fact that the taxable event must be determined in accordance with the IRNR (Art. 93.2 LIRPF), so that Article 13.1.h) of the IRNR Law is fully applicable, which considers income attributed to individuals who own urban real estate located in Spain to be income obtained in Spanish territory, without any exception for the primary residence.

Likewise, the TEAC highlights that the reference made by Article 24.5 of the IRNR Law to Article 85 of the IRPF Law is purely quantitative in scope, limited to determining the amount of the imputation, but does not allow the exclusion of the habitual residence provided for in the IRPF to be transferred to the IRNR. Finally, the Court recalls that the regime of Article 93 of the IRPF Law is a closed optional regime, which prevents taxpayers from selectively applying IRPF benefits within a taxation framework designed essentially in accordance with the rules of the IRNR.

What can be done?

It is advisable to review the situation of taxpayers currently covered by the expatriate regime, identifying whether they own urban properties in Spain and assessing the impact that the imputation of income may have on their tax burden. Similarly, in the case of new moves to Spain, it is important to bear this change in criteria in mind when analysing, in advance, whether it is really worthwhile opting for the special regime under Article 93 of the Personal Income Tax Law, especially in situations involving the purchase or ownership of property in Spain.