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Buying property in Spain through a company
Ownership Structure

Buying Property in Spain
Through a Company

When a corporate structure makes financial sense — and when individual ownership is clearly preferable. The complete analysis for international buyers.

€3,000
Minimum share capital for Spanish SL
25%
Spanish corporate tax rate
3%
Annual levy on foreign company property holdings
1–3 wks
To form a Spanish SL
Pros and Cons

Honest Assessment: When a Company Works and When It Does Not

Potential Advantages

Inheritance simplification
Shares in a Spanish SL pass to heirs without triggering inheritance tax in Spain in the same way that direct property ownership does. Estate planning benefits can be significant for high-value assets.
Privacy
Property owned through a company is registered in the company name, not the individual's. Some buyers prefer this for discretion reasons, though beneficial ownership can still be traced through corporate records.
Multi-buyer scenarios
A company structure can simplify co-ownership arrangements between multiple buyers, family members, or business partners — particularly where buy-out mechanisms need to be documented.
Future transfer flexibility
A property held in a Spanish SL can potentially be transferred by selling the shares rather than the property — which can reduce transfer taxes for the buyer at that point (subject to anti-avoidance provisions).

Significant Disadvantages

Annual compliance costs
A Spanish SL must file annual accounts with the Mercantile Registry, file annual corporate tax returns, and pay an accountant to maintain books. Annual costs typically €1,500–€3,000 for a simple property-holding company.
Corporate tax on rental income
Spanish corporate tax (Impuesto sobre Sociedades) is 25% on net profits. For rental income, this may be less favourable than a non-resident's personal 19% rate (EU residents) or 24% (non-EU).
No principal private residence exemption
Companies cannot benefit from the principal private residence capital gains exemption available to individuals. If you intend to use the property personally and eventually sell it free of CGT (in your home country), a corporate structure may be counterproductive.
Complexity on purchase
Buying through a company adds administrative complexity. The company must be constituted before purchase, a company NIE obtained, and all documents signed in the company name. Lenders may be less willing to mortgage property held in an SL.
Foreign company complications
Buying through a foreign company (UK Ltd, Irish Ltd, BVI, etc.) is legal but creates additional compliance obligations — a Spanish tax representative must be appointed, and the foreign company may be subject to Spanish attribution rules.

The Honest Verdict

For the vast majority of Costa del Sol buyers — including most high-net-worth individuals — buying as a private individual is simpler, cheaper to administer, and at least as tax-efficient as a corporate structure. The perceived tax advantages of company ownership are often outweighed by ongoing compliance costs and the loss of individual buyer benefits.

Structures that genuinely benefit from corporate ownership: (1) families with significant estate planning concerns and high-value assets; (2) buyers acquiring multiple properties who want to consolidate ownership and rental management; (3) commercial investors. For a typical holiday home or investment apartment purchase, get specialist advice before adding the complexity of a corporate structure.

Questions & Answers

Company Purchase FAQs

An SL (Sociedad Limitada) is the Spanish equivalent of a limited liability company (UK Ltd, US LLC). It is the most common vehicle for property holding in Spain. Minimum share capital is €3,000 (can be reduced to €1 under the SAS fast-track formation). Formation takes approximately 1–3 weeks through a Spanish Notary and requires a company NIE. Annual accounts must be filed with the Mercantile Registry.

Not at the purchase stage — the same taxes (VAT, stamp duty or ITP) apply whether you buy as an individual or through a company. The potential savings come later: on inheritance, on future transfer (selling shares vs the property), or on capital gains tax depending on your home country's tax treatment of capital gains realised through a foreign corporate structure. You need specialist advice from both a Spanish tax adviser and a tax adviser in your home country.

Yes, but it is significantly harder. Most Spanish retail banks do not lend to Spanish property-holding SLs. Private banks and specialist lenders will lend against property in a company name, typically with lower LTVs (50–60%), higher rates, and stricter requirements. If mortgage finance is important to your purchase, buying as an individual is strongly preferable.

For most Costa del Sol buyers, a Spanish SL is preferable to using a foreign company. Foreign companies require a Spanish tax representative, may be subject to 3% annual wealth tax on the property value (the Gravamen Especial sobre Bienes Inmuebles de Entidades No Residentes), and create complex ongoing compliance obligations. The 3% annual levy alone makes a foreign company structure economically unviable in most cases. Specialist advice is essential.

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