Correction
This article was rewritten on 7 November 2026. An earlier version said that Madrid had extended regional income tax deductions for taxpayers under the regime, and gave a share of filings domiciled in Madrid without a source. Under the Beckham Law, regional income tax deductions do not apply at all. We apologise for the error.
Madrid is known for its regional tax incentives, and since 2024 it even has a deduction designed for people who move there from abroad. But if you are under the Beckham Law, your income tax is calculated with a different set of rules, and the Madrid incentives work differently for each tax. This is what applies to you and what does not.
Key points
- Income tax: under the regime the tax is calculated under the Non-Resident Income Tax rules (article 93.2 LIRPF). There is no regional scale and there are no regional deductions, in Madrid or anywhere else.
- Madrid's 20% deduction for investments by new residents from abroad (article 17 bis of its consolidated tax text, since 2024) is therefore not available while you are in the regime.
- Wealth tax: you pay only on assets in Spain, and the AEAT allows you to opt to apply Madrid's wealth tax rules. Madrid's 100% relief is replaced while the temporary solidarity tax on large fortunes remains in force.
- A spouse or child who is not in the regime is an ordinary resident and can use the Madrid deductions.
Income tax: why regional deductions do not apply
Article 93.2 of the Personal Income Tax Law says that, under the regime, the tax is determined "in accordance with the rules established in the consolidated text of the Non-Resident Income Tax Law". That law has its own closed list of deductions. The Modelo 151 instructions list what can be deducted from the tax: donations, withholdings and payments on account, and the deduction for international double taxation. Nothing else. The DGT applied the same reasoning to a state deduction for energy-efficiency works in V2199-25.
The return does record your region of residence and has a box called "regional share". That box only splits the same tax 50% between the State and the region; it does not change what you pay. A taxpayer under the regime in Madrid pays the same 24% (or 47% above 600,000 euros) as one in Barcelona, Valencia or Málaga.
Madrid's deduction for new residents from abroad
Madrid Law 4/2024 added article 17 bis to the Madrid consolidated text on ceded taxes, for tax periods from 1 January 2024. In summary, it allows people who were not resident in Spain and become Madrid income tax taxpayers to deduct 20% of the acquisition cost of certain securities: bonds and similar instruments, and shares or holdings in entities, whether listed or not. The main conditions are:
- Not having been resident in Spain in the five years before moving to Madrid.
- Investing in the year you acquire residence in Madrid or in the following year (for Spanish entities, also the year before).
- Keeping the investment for six years, with reinvestment within a month allowed, and remaining a Madrid income tax taxpayer for that time.
- For unlisted holdings, the stake held with close family may not exceed 40% and you may not have executive functions or an employment relationship in the company.
Because the regime only allows the deductions of the Non-Resident Income Tax Law, this deduction cannot be applied while you are under the Beckham Law. No ruling addresses the combination expressly; it follows from article 93.2 and the list of deductions above. If the Madrid incentive matters to you, the real question is whether to opt for the regime at all, or whether the ordinary resident rules with the deduction come out better. That needs numbers for your case, and the choice has consequences for six years on both sides.
Wealth tax: here Madrid's rules can apply
Under article 93.1, a taxpayer in the regime is liable to wealth tax only on assets and rights located in Spain (real obligation). For those taxpayers, the AEAT wealth tax manual says that applying the regional rules "is a right and, therefore, an option", linked to the region of residence, and that if you exercise it you must apply all of that region's wealth tax rules.
Madrid has a 700,000 euro exempt amount and, in article 20 of its consolidated text, a 100% relief on the tax. However, its seventh transitional provision states that, while the temporary solidarity tax on large fortunes is in force, that general relief does not apply and is replaced by one equal to the difference between the wealth tax and the solidarity tax. Whether the solidarity tax affects you depends on the value of your assets in Spain, so check it case by case.
If your family is not in the regime
Your spouse and children can opt into the regime under article 93.3, but they do not have to. If they do not, they are ordinary Madrid residents: they pay income tax on worldwide income with the Madrid scale and can claim Madrid deductions, including article 17 bis if they meet its conditions. The family regime is explained in our article on the spouse and children under the Beckham Law.
Frequently asked questions
Can I claim Madrid regional deductions under the Beckham Law?
No. Under article 93.2 of the Personal Income Tax Law the tax is calculated under the Non-Resident Income Tax rules, and the Modelo 151 instructions only allow donations, withholdings and payments on account, and international double taxation to be deducted. There are no regional deductions in any region.
Can I use the Madrid 20% deduction for investments by new residents from abroad?
Not while you are under the regime, because it is a regional income tax deduction. It is available to new Madrid residents taxed under the ordinary rules who meet its conditions, such as not having been resident in Spain in the previous five years and keeping the investment for six years.
Does Madrid wealth tax relief apply to me under the Beckham Law?
You can opt to apply Madrid wealth tax rules, as the AEAT manual states for taxpayers under article 93. But while the temporary solidarity tax on large fortunes is in force, Madrid replaces its 100% relief with one that leaves that solidarity tax payable, so the outcome depends on your assets in Spain.
The deductions that are blocked under the regime are covered in more detail in our article on deductions excluded by the DGT. If you are deciding between the regime and the ordinary rules in Madrid, DPLL Tax & Legal, an AEAT Social Collaborator firm based in Barcelona, can run both scenarios with your figures. Start with a free 10 minute call.