English-language tax analysis in Spain of DGT binding rulings 2023-2026 on Non-Residents with Spanish Real Estate Through Foreign Companies (Ley 38/2022). Each cited ruling links to the original Spanish text on the DGT consultation database. Ley 38/2022 extended Spanish wealth tax to non-resident shareholders of foreign companies whose assets are 50% or more Spanish real estate.
Ley 38/2022 was the most significant change to Spanish wealth-tax exposure for non-resident real-estate investors in two decades. Structures that had operated outside Spanish tax for years suddenly came in.
Topics » Spanish Wealth Tax (IP) and the Solidarity Tax on Large Fortunes (ITSGF) » Non-Residents with Spanish Real Estate Through Foreign Companies (Ley 38/2022)
Law 38/2022 closed a long-standing loophole: non-residents holding Spanish real estate through foreign holding companies were arguably outside the scope of Spanish Wealth Tax (which historically focused on direct ownership). The new Article 5 of the Wealth Tax Law (as amended) now subjects non-residents to Spanish IP on shares of non-Spanish entities whose assets are predominantly Spanish real estate.
The threshold: more than 50% of the foreign entity's assets, directly or indirectly, must be Spanish real estate. The 12 DGT rulings 2023-2026 of this subtopic explore the valuation methodology, the look-through approach for multi-tier structures, and the interaction with the Solidarity Tax on Large Fortunes (ITSGF).
Before turning to doctrine and worked examples, fix the technical terms that recur throughout the topic. Each has a precise meaning in Spanish tax law and EU jurisprudence; mastering the differences between them is the first line of defence vis-à-vis the AEAT:
Look-through to underlying assets
If a foreign company holds 50%+ in Spanish real estate, the non-resident shareholder is taxed on the underlying Spanish real estate value.
Multi-tier analysis
Indirect holdings through chains of foreign entities are caught.
Valuation date
31 December of the relevant year; standard IP valuation rules.
ITSGF interplay
Same tax base for ITSGF; potential combined rate of up to 3.5%.
Theory makes more sense alongside real-world fact patterns. The cases below — built from DGT doctrine — show where the system grants relief and where it denies it:
📌 Case 1: US individual owns 100% of US LLC; LLC owns Spanish villa
Post-Law 38/2022: US individual is subject to Spanish IP on the value of the underlying Spanish villa (look-through) above the IP exemption threshold.
📌 Case 2: UK trust holds Spanish real estate through Jersey holding
Multi-tier look-through; the UK individual beneficiaries may face IP exposure depending on settlement structure.
A visual summary of the doctrine. This table does not replace case-by-case analysis, but it allows the reader to identify quickly the general rule applicable to each situation:
| Situation | Rule | Notes |
|---|---|---|
| Foreign entity with >50% Spanish real estate by value | Look-through to non-resident shareholder | Law 38/2022 |
| Foreign entity with <50% Spanish real estate | No look-through | Standard rules |
| Direct ownership | Always within IP scope | Pre-existing rules |
The cards below summarise representative DGT binding rulings on this topic in English from a practical tax perspective in Spain. Each card links to the original Spanish text of the consulta on the DGT consultation database.
A consultation involving Germany reaches the DGT concerning properties.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
A consultation involving Germany reaches the DGT on whether Wealth Tax reach their situation specifically regarding property.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
An individual consults the DGT specifically regarding flat.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
The consultation brings to the DGT.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
An individual of Spanish nationality consults the DGT specifically regarding shareholdings.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
An American national living in the United States consults the DGT.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
A Spanish national writes to the DGT on the proper handling of Wealth Tax as it affects properties.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
An individual of Spanish nationality consults the DGT in respect of flat.
→ View original (Spanish) on the DGT consultation database
📖 DGT doctrine in plain English
DGT applies the amended Article 5 LIP from 29 December 2022: participations in entities (Spanish or foreign) whose assets are at least 50% Spanish real estate (real values, tested at 31 December) are deemed Spanish-located for the non-resident shareholder. The look-through extends to indirect holdings through chains of entities. The non-resident shareholder must file the Spanish Wealth Tax (and ITSGF where applicable) on the indirect-holding value.
The topic comprises a total of 12 DGT binding rulings 2023-2026. The above are the most representative; the rest follows the same line and can be retrieved from the official DGT search at Petete.
The errors below are those we most often see in practice. Most are avoided with up-front planning and contemporaneous documentation:
❌ Assuming a foreign holding shields from IP
Consequence: Post-2022, often wrong
How to avoid it: Run the 50% test annually
The 2022 reform reshaped non-resident structuring of Spanish real estate. Pre-existing structures should be reviewed and, where appropriate, restructured to manage the IP / ITSGF exposure.
From the practice
Notes from real cases · Jacob Salama, ICAMálaga 11.294
The 50% test is applied on real values at 31 December and looks through chains of entities. The non-resident shareholder of a Liechtenstein anstalt holding a Dutch BV holding a Spanish villa is captured. The reach is deliberately broad.
Common pitfall: Many such structures had Wealth Tax exposure that was not on anyone's compliance map until Ley 38/2022. Late filings for the 2022, 2023, 2024 and 2025 accruals attract surcharges; the regularisation cost on a long-dormant structure can be substantial.
If you have a non-resident client holding Spanish real estate through any kind of foreign company, the Wealth Tax position needs reviewing. Most structures we see that pre-date Ley 38/2022 have unrecognised exposure.
⚠️ Tax disclaimer: This content reflects Spanish DGT doctrine and Spanish/EU jurisprudence in force at the date of publication. DGT binding rulings only bind the Spanish tax authority on facts substantially identical to those of the consultation (Article 89 LGT); their application by analogy requires care. Treaty positions, the MLI, EU case-law and OECD MC Commentary may have evolved. Before filing any return, refund claim, appeal or position paper with the AEAT, please obtain individualised advice from a Spanish-licensed tax lawyer or registered tax adviser. SALAMA LEGAL SLP does not assume responsibility for decisions taken solely on the basis of this content.
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