Imputation of property income under the impatriate regime (Beckham Law)

Executive Summary

In its ruling on the unification of criteria on 17 July 2025 (Ruling 03697/2025), the Central Economic-Administrative Court (TEAC) established that taxpayers covered by the special regime for impatriats (known as the “Beckham Law”) must pay tax on the imputed income from properties they own in Spain that are not used for economic activities, including the property that constitutes their habitual residence in Spain.

This is not a new development, as the Madrid High Court of Justice had already ruled in the same vein in Judgment 316/2024 of 6 May 2024, Rec No. 685/2022.

The TEAC bases this conclusion on the fact that the special regime of Article 93 of the Personal Income Tax Law refers to the rules of the Non-Resident Income Tax (IRNR) and that, in this tax, there is no exemption equivalent to that provided for the habitual residence in the general personal income tax regime. This represents a substantial difference from the general regime for residents (where the habitual residence does not give rise to the imputation of income) and obliges inpatriate owners to bear an additional annual tax cost simply because they own their residence in Spain.

However, the High Court of Justice (TSJ) of Madrid, in its ruling 665/2025 of 17 September 2025, rec. no. 2095/2021, departs from this criterion and rules that taxpayers covered by the Beckham Law regime should not impute property income for the home that constitutes their habitual residence in Spain, thus contradicting the doctrine of the TEAC.

Regulatory Context

The inpatriate regime (Art. 93 of the Personal Income Tax Law) allows those who acquire tax residence in Spain as a result of their move to Spanish territory to opt to be taxed, for a certain period, in accordance with the rules of the IRNR, while maintaining their status as personal income tax payers.

The controversy arises from the intersection of two regulations:

1. IRPF (General Regime). Article 85 of the IRPF Law expressly excludes the habitual residence from the income imputation regime. As a result, a resident who applies the general regime must not impute income for the property that constitutes their main residence.
2. IRNR (Regulations applicable to impatriates). Article 13.1.h) of the TRIRNR subjects to tax the imputed income derived from urban property located in Spain that is not used for economic activities, without providing for any exemption for the habitual residence, given that, by definition, a non-resident does not usually have their habitual residence in Spain.

The controversial issue has been to determine whether the reference made by the Beckham Law regime to the IRNR rules implies applying this tax in full, including the imputation for the habitual residence, or whether, on the contrary, the exclusion provided for in Article 85 of the Personal Income Tax Law must be respected.

Legal opinion of the High Court of Justice

The TSJ of Madrid adopts a criterion that clearly diverges from that upheld by the TEAC and concludes that the imputation of real estate income for the habitual residence is not applicable in the case of taxpayers covered by the regime of Article 93 of the LIRPF.

The Court’s reasoning is based on the following elements:

1. The Beckham regime does not transform the taxpayer into a non-resident: The Supreme Court emphasises that the special regime of Article 93 of the Personal Income Tax Law is within the scope of personal income tax and that impatriats maintain their status as taxpayers for that tax, even though they are allowed to determine their tax liability in accordance with the rules of the IRNR. Therefore, the taxpayer cannot be treated as a non-resident for all purposes.
2. Referrals between IRPF and IRNR: The Court highlights that Article 24.6 TRLIRNR itself refers to the IRPF regulations for classifying income and expenses, which shows that the legislator wanted flexible coordination between the two regimes, not an absolute separation. In this context, Article 85 of the Personal Income Tax Law, which excludes the habitual residence from the attribution of real estate income, is fully applicable.
3. Purpose of Article 13.1.h) TRLIRNR: The imputation of real estate income provided for non-residents cannot be applied to those who do reside in Spain, as the concept of “habitual residence” is foreign to IRNR.

What this means in practice

The ruling by the Madrid High Court of Justice reopens the debate on the interpretative limits of the inpatriate regime and calls into question the administrative doctrine of the TEAC.

Taxpayers covered by the Beckham Law regime could request the rectification of self-assessments in which they have improperly attributed income from their habitual residence, or defend this position in the event of an ongoing inspection or proceeding.

The disparity in criteria means that, in the event of an audit, a taxpayer should not be penalised for not having allocated the income in their tax return.

Why it is relevant

This ruling is particularly relevant for two strategic reasons:

1. Change in case law criteria compared to the administrative doctrine of the TEAC. The ruling of the Madrid High Court of Justice directly challenges the unified criteria of the TEAC, adopting a different interpretation that is more favourable to taxpayers with regard to the allocation of property income under the inpatriate regime. Although the ruling is not generally binding on the tax authorities, it does constitute a solid case law precedent that weakens the administrative position and strengthens the defence of taxpayers in economic-administrative and contentious-administrative proceedings.

1. Consolidation of an interpretative conflict that points to the Supreme Court. The ruling highlights the existence of a head-on collision between the binding administrative doctrine of the TEAC and the case law of the High Courts of Justice, in particular the TSJ of Madrid, which maintains a criterion more favourable to the taxpayer, understanding that the reference to the rules of personal income tax should also extend to the exemption of the habitual residence, so that impatriates would not be taxed on the income from their residence in Spain.

This conflict of interpretation creates a scenario of legal uncertainty and makes it likely that the Supreme Court will intervene to establish doctrine in cassation proceedings. Until this happens, the TSJ ruling constitutes a key defence argument for taxpayers covered by the special regime for posted workers.

At Seegman, while the possibility of a final ruling by the Supreme Court remains open, we suggest reviewing the individual situation of clients covered by the inpatriate regime and evaluating the possibility of subsequently challenging the self-assessment, based on the favourable case law of the TSJ of Madrid.

Sources:

https://www.poderjudicial.es/search/AN/openDocument/617bd319b66aa795a0a8778d75e36f0d/20251023 https://serviciostelematicosext.hacienda.gob.es/TEAC/DYCTEA/criterio.aspx?id=00/03697/2025/00/0/1&q