Mbappé Law in Madrid: the tax deduction attracting international high-net-worth individuals
· 5 min. read · by Christie's International Real Estate Madrid
In 2003, David Beckham's signing for Real Madrid coincided with the approval of a special tax regime for foreign professionals relocating to Spain. Two decades later, history repeats itself. In November 2024, the Madrid Assembly approved a new tax deduction for international investors who establish their residence in the Community of Madrid. Its approval coincided with Kylian Mbappé's arrival at Real Madrid, and the market was quick to give it his name.
But the Mbappé Law goes far beyond football. It is a measure designed to attract high-net-worth individuals, entrepreneurs and international investors to Madrid, and it is generating growing interest among those who view the Spanish capital as a strategic destination for their assets and investments.
What the Mbappé Law is and how it differs from the Beckham Law
The Mbappé Law is not an independent national law, but an autonomous deduction within the Madrid regional income tax, introduced through the modification of Legislative Decree 1/2010 on taxes assigned to the Community of Madrid.
Its fundamental difference from the Beckham Law is significant: unlike the Beckham Law, which following its 2014 amendment ceased to apply to professional athletes, the Mbappé Law has become the most powerful tax benefit available for attracting talent to Madrid's sports clubs. In other words, the Beckham Law regulates how employment income is taxed for those relocating to Spain. The Mbappé Law rewards the investments made in Spain by those who establish their residence in Madrid.
Both measures are compatible and, combined, make Madrid one of the most competitive tax environments in Europe for international high-net-worth individuals.
What the deduction consists of
The deduction equals 20% of the acquisition value of certain eligible assets, including debt securities, both public and private, as well as shares or equity interests in any type of entity, whether listed on organised markets or not.
One of its most significant features is that it is not subject to any limit, either on the maximum base or on the deductible quota.
To illustrate the impact with a larger example: an international investor who establishes residency in Madrid and invests 10 million euros in eligible assets could apply a deduction of 2 million euros. Any deduction not applied due to insufficient quota can be carried forward and applied over the following five tax years.
Who can benefit from the Mbappé Law
This deduction is available to non-resident individuals who, from 1 January 2024 onwards, establish their tax residency in the Community of Madrid, provided they meet two main requirements:
- They must not have been tax resident in Spain during the five years prior to the change of residence, and they must maintain their status as an income taxpayer in the Community of Madrid throughout the investment holding period, set at six years.
- The transfer of the invested assets before that period is permitted, provided that the full amount obtained is reinvested in eligible assets within one month of the date of transfer.
Which investments are eligible and which are not
Investments must be made in the tax year in which Madrid residency is acquired or in the following year. Investments made in the year prior to acquiring residency are also admitted when they consist of variable income securities or debt issued by Spanish entities.
However, the deduction has its limits. Investments cannot be made in entities resident in tax havens, in companies in which the taxpayer holds a significant stake, or in companies of which the taxpayer is a director or employee.
A measure exclusive to Madrid
For the time being, the Mbappé Law is exclusive to the Community of Madrid. Cantabria has proposed a similar tax deduction for non-residents choosing to establish residency there, though it remains under review. Madrid is therefore the only territory where this advantage is already a reality.
This exclusivity reinforces the appeal of the Spanish capital compared to other regions and other European countries, at a time when competition to attract international high-net-worth individuals is becoming increasingly intense.
Mbappé Law, Beckham Law and the prime property market in Madrid
For the international investor who values Madrid as a destination, the combination of the Beckham Law and the Mbappé Law represents a tax advantage that is hard to find in any other European capital. A flat 24% rate on employment income for six years, plus a 20% deduction on investments with no quota limit, creates a particularly favourable scenario for those who plan their relocation correctly.
In this context, demand for luxury homes in Madrid, high-end apartments and prime properties in neighbourhoods such as Salamanca, Almagro or Chamberí, or in residential areas such as La Moraleja, continues to grow driven precisely by this buyer profile: international, with consolidated wealth and a clear vision of what they are looking for both fiscally and residentially.
An advantage that may not always be available
Tax advantages change. What Madrid offers today may not be available on the same terms in the future. For those considering establishing their residence in Spain, the current moment brings together a combination of particularly favourable conditions that deserve careful analysis with the right professional advice.
At Christie's International Real Estate Madrid, we work with buyers who make complex decisions and who need a comprehensive view of the market. If you are considering settling in Madrid, our team would be delighted to guide you in finding the property that best fits your vision for life.
