Skip to content
Back to index
V1081-19 21 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividad económica

Property leasing constitutes an economic activity if a full-time employee is hired under a labour contract

A taxpayer in active retirement with 20 rental properties asks whether hiring a full-time employee converts their real estate income into an economic activity. The DGT rules that hiring a worker under a labour contract on a full-time basis meets the legal requirement for such classification.

The question raised

Consideration of leasing as a business activity for Personal Income Tax purposes.

The DGT's ruling

The leasing of real estate is considered an economic activity only when at least one person is employed under a full-time employment contract. This requirement is met at the time the hiring is carried out, even if it occurs after the start of the tax period. Likewise, the receipt of a retirement pension does not prevent the application of the Wealth Tax exemption if the requirements of regularity, personality, direct management, and principal source of income are met.

Book your free first meeting