An analysis by Garrigues, Taxand Spain
The Spanish Supreme Court has recently ruled that for real estate leasing to qualify as an economic activity under the family business regime in inheritance and gift tax, it is sufficient to employ one full-time worker as required by article 27.2 of the Personal Income Tax Law.
The Court rejected the tax authority’s stricter approach, which demanded proof of economic necessity or sufficient workload to justify the employee, stressing that no additional requirements may be imposed. The decision enhances legal certainty, confirming that compliance with the statutory employee condition alone allows access to the regime’s tax relief, though fictitious or simulated contracts may still be challenged.
Marta Gracia Domènech from our Spanish member firm Garrigues have published an article discussing the ruling and its implications here.