What are Socimis and why are they at the heart of Spain's housing debate?

In recent years the Spanish government has been trying to solve the housing crisis in the country by passing various laws and reforms, including the Housing Law in 2023, which in turn created many more problems, according to some experts.

In January 2025, Prime Minister Pedro Sánchez announced 12 measures aimed at increasing the number of affordable homes, achieve better regulation and give more aid to those who need it.

Some of these proposals have made into a draft bill presented in the Congress by the ruling Socialists.

The most eye-catching measure is the proposed 100 percent tax on property buyers who don't reside in the EU, a levy which will double the price they pay for homes n Spain.

In addition to building new social housing and cracking down on seasonal rents, among many other measures, the government is also now turning its attention to Socimis (known as Sociedades Anónimas Cotizadas de Inversión Inmobiliarias) to try and further help access to housing.

As announced by Sánchez, the government wants to change the tax benefits regime for Socimis, which are essentially property investment vehicles, so that they only apply to companies that manage affordable rentals.

Note that this measure will only be implanted on residential Socimis, so those that invest in offices, shopping centres or any other kind of property will not be affected.

What are Socimis?

According to Delanto Chambers, Anglo-Spanish legal and tax experts: "A Socimi (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria) translates as Listed Corporations for Investing in the Real Estate Market and is similar to a Real Estate Investment Trust in the UK (abbreviated to REIT).

Socimis are public limited investment companies, created to encourage long-term investment in the Spanish property market through investment in Spanish urban real estate for rent such as homes, hotels or commercial premises."

This essentially means that Socimis are like limited companies listed on stock markets whose only trade in properties.

Delanto Chambers, presumably before this latest government announcement, previously described Socimis as "attractive investment vehicles" due to the "substantial tax breaks on transaction costs and profits allowing shareholders to maximise their investment."

Crucially, they added, "provided that the investment and dividend distribution requirements are met Socimis are Corporate Income Tax taxpayers, although subject to a tax rate of 0 percent."

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The government plan for Socimis

Socimis' tax benefits could be set to change if the Socialists' draft bill receives parliamentary approval.

When announcing the proposal in January, Sánchez said: “We must finally put an end to the injustice of some investors using this instrument to pay less tax than ordinary citizens when buying the same property.”

Back in November, the government green lighted the abolition of the existing Socimi tax regime, which, as noted above, essentially made them exempt if they distributed at least 80 percent of dividends to shareholders.

Now, the government is instead proposing they be taxed at the general corporate tax rate of 25 percent.

However, they have suggested tax breaks for Socimis that help with Spain's housing crisis: 50 percent if more than 60 percent of the asset portfolio is allocated to affordable rentals, and 100 percent if the profit is additionally reinvested in this type of housing over the following three years.

Sánchez's administration will consider properties affordable if their rent does not exceed the index established by the Housing Ministry, if the property is classified as protected, if the rent does not exceed 30 percent of the tenant's income, or if the cost is below €26,400 per year.

All the above measures have been suggested because the Spanish government feels Socimis have so far failed to improve the supply of affordable housing in Spain.

Experts seem to think the fiscal clampdown will disproportionately affect foreigners, rather than Spaniards.

According to market estimates, the measure could in theory impact more than half of total property investment in Spain.

Specifically, foreign investment accounts for an average of 61 percent of the total volume in the Spanish real estate sector since 2014, according to data from the consultancy firm Savills.

In 2023, 70 percent of Socimis' capital was held by international investors, unsurprising given their generous shareholder remuneration.

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