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Yes, you can purchase property in Spain through a company rather than as an individual, and this approach offers specific tax advantages and simplified inheritance planning for property investors.
However, buying property through a Spanish company involves higher upfront costs, ongoing compliance requirements, and different tax obligations compared to individual ownership. The most common structure is a Spanish Limited Liability Company (SL) with a minimum share capital of €3,000, which typically costs between €1,000-€1,210 to establish and €1,000-€3,000 annually to maintain.
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Companies can legally buy property in Spain, with Spanish Limited Liability Companies (SL) being the most efficient structure requiring €3,000 minimum capital and costing €1,000-€1,210 to establish.
Corporate ownership offers tax advantages through deductible expenses and simplified inheritance planning, but involves higher ongoing costs of €1,000-€3,000 annually and 25% corporate tax on rental income versus progressive individual rates up to 47%.
| Aspect | Company Ownership | Individual Ownership |
|---|---|---|
| Setup Costs | €1,000-€1,210 + property taxes | Property taxes only |
| Annual Maintenance | €1,000-€3,000 | Minimal |
| Rental Income Tax | 25% corporate rate | Progressive rates up to 47% |
| Capital Gains Tax | 25% corporate rate | 19-26% sliding scale |
| Mortgage Financing | 60-70% of property value | Up to 80% of property value |
| Inheritance Planning | Share transfer (simplified) | Property transfer (complex) |
| Expense Deductions | Full business expenses | Limited personal deductions |
What are the exact legal requirements for a Spanish company to buy property?
Spanish companies must provide complete documentation including articles of association, tax identification number, proof of shareholders and legal representatives, and recent financial statements to purchase property legally.
Foreign companies face additional requirements including document translation into Spanish and legalization through Apostille certification. All shareholders typically need to obtain a NIE (tax identification number) even when purchasing through the company structure.
The company must open a Spanish bank account in its name for all property transactions and tax obligations. Most companies engage a Spanish lawyer for due diligence to ensure full compliance with Spanish property law and avoid legal complications during the purchase process.
As of September 2025, these requirements remain standardized across all Spanish regions, though some autonomous communities may have additional local documentation requirements for property transfers.
Can a foreign company register in Spain to purchase real estate, and how long does this process take?
Foreign companies can register in Spain specifically for real estate purchases, following a structured process that includes document collection, translation, legalization, and appointing Spanish legal representatives.
The typical timeline ranges from 4 to 12 weeks for completion, depending on the company's country of origin and documentation complexity. EU companies generally complete registration faster than non-EU entities due to simplified documentation requirements.
The process involves submitting translated and legalized corporate documents, obtaining tax identification, establishing a registered address in Spain, and appointing a fiscal representative. Companies from countries with Apostille agreements experience shorter processing times compared to those requiring consular legalization.
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What type of Spanish company structure works best for buying property, and what is the minimum share capital required?
| Company Type | Minimum Capital | Setup Cost | Best For |
|---|---|---|---|
| Limited Liability Company (SL) | €3,000 | €1,000-€1,210 | Most property purchases |
| Stock Corporation (SA) | €60,000 | €2,000-€3,000 | Large investments only |
| Professional Corporation | €3,000 | €1,200-€1,500 | Professional services |
| General Partnership | No minimum | €800-€1,000 | Rarely used for property |
| Limited Partnership | €3,000 | €1,000-€1,300 | Complex structures |
| Cooperative | €3,000 | €1,500-€2,000 | Group investments |
| Branch Office | Variable | €1,500-€2,500 | Foreign companies |
How much does it cost to buy property through a company compared to as an individual?
Property purchase costs through a Spanish company are typically €1,000-€1,210 higher than individual purchases due to company formation and additional legal requirements.
Both companies and individuals pay the same property transfer tax (ITP) of 6-10% of the property price, plus notary fees of approximately €600-€875 and registry fees of €400-€650. Companies incur extra costs for due diligence, corporate document preparation, and specialized legal services.
Ongoing annual costs for company-owned properties range from €1,000-€3,000 for accounting, tax filing, and regulatory compliance, while individual ownership requires minimal annual maintenance costs beyond property taxes and insurance.
The total additional cost for the first year typically ranges from €2,000-€4,210 when purchasing through a company versus individual ownership, not including the ongoing annual compliance expenses.
What are the annual corporate tax obligations for a Spanish company that owns property?
Spanish companies owning property must pay corporate income tax at a flat rate of 25% on all taxable income, including rental income and capital gains from property sales.
Foreign companies without a permanent establishment in Spain face non-resident income tax rates of 19% for EU companies and 24% for non-EU companies on Spanish-sourced income. Annual corporate tax returns must be filed by July 25th each year, regardless of whether the company generated income.
Companies must also file annual accounts with the Spanish Mercantile Registry, prepare financial statements, and maintain proper accounting records throughout the tax year. Professional accounting services for these obligations typically cost €1,000-€3,000 annually depending on company complexity and transaction volume.
Additional obligations include quarterly VAT returns if applicable, annual information declarations, and potential wealth tax on high-value properties exceeding €700,000 in certain regions like Madrid and Andalusia.
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How is rental income taxed when owned through a company versus as an individual?
Rental income from company-owned properties is taxed at the flat corporate tax rate of 25%, while individual owners face progressive income tax rates ranging from 19% to 47% depending on their total annual income.
Companies can deduct all legitimate business expenses before calculating taxable income, including property management fees, maintenance costs, insurance, financing interest, and depreciation. Individual owners also qualify for expense deductions but face more restrictions on deductible amounts and categories.
For rental income above €50,000 annually, corporate ownership typically results in lower tax liability due to the flat 25% rate versus the higher individual marginal rates. However, individuals benefit from a €60,000 annual exemption on rental income from their primary residence in certain circumstances.
Corporate ownership requires quarterly advance payments of corporate tax throughout the year, while individual rental income is typically declared and paid annually through personal income tax returns filed between April and June.
Are there tax advantages when purchasing property through a company?
Corporate property ownership offers significant tax advantages through comprehensive expense deductions, including maintenance costs, property management fees, insurance, financing interest, and annual depreciation of the property value.
1. **Full Business Expense Deductions**: Companies can deduct 100% of legitimate property-related expenses, including repairs, renovations, professional services, and administrative costs.2. **Depreciation Benefits**: Annual building depreciation of 3% can be deducted from taxable income, providing substantial tax savings over time.3. **Inheritance Tax Planning**: Property transfer through company share sales can significantly reduce Spanish inheritance tax exposure, especially beneficial for non-resident heirs.4. **Capital Gains Timing**: Companies can potentially defer capital gains tax through reinvestment strategies and structured asset exchanges.5. **Professional Service Costs**: All legal, accounting, and property management fees are fully deductible business expenses for corporate owners.The inheritance tax advantage is particularly significant, as non-resident individuals face inheritance tax rates up to 34% in most Spanish regions, while company share transfers may avoid these taxes entirely through proper structuring.
What are the ongoing accounting and compliance requirements for a property-owning company in Spain?
Spanish companies owning property must prepare annual accounts, file corporate tax returns, maintain accounting records, and submit annual reports to the Spanish Mercantile Registry by specific deadlines each year.
Annual accounting requirements include preparing balance sheets, profit and loss statements, and notes to the accounts, which must be approved at the annual shareholders' meeting and filed with the registry by October 31st. Corporate tax returns are due by July 25th annually.
Companies must maintain detailed accounting records throughout the year, including all property-related income, expenses, invoices, and supporting documentation for tax authorities. Professional accounting services for these compliance requirements typically cost €1,000-€3,000 annually depending on transaction complexity.
Additional requirements include quarterly VAT filings if applicable, maintaining a legal books registry, and ensuring proper corporate governance through annual shareholder meetings and board resolutions for major property decisions.
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Do Spanish banks offer mortgages to companies, and under what conditions?
Spanish banks do provide mortgages to companies for property purchases, typically financing 60-70% of the property value compared to up to 80% for individual buyers.
Mortgage conditions for companies are more stringent, requiring detailed financial statements, business plans, proof of income, and often personal guarantees from shareholders. Interest rates for corporate mortgages are generally 0.25-0.75% higher than individual mortgage rates.
Banks require companies to demonstrate stable income streams, adequate debt-to-equity ratios, and proven ability to service the mortgage payments. The application process takes 6-10 weeks longer than individual mortgages due to additional corporate documentation and analysis requirements.
Loan terms typically range from 15-25 years for companies compared to up to 30 years for individuals, and banks may require additional collateral or cross-guarantees for higher loan amounts or riskier company profiles.
Are there restrictions for companies owned by non-residents or based outside the EU?
Non-EU companies face additional reporting requirements and anti-money laundering measures when purchasing Spanish property, but no fundamental ownership restrictions exist for real estate investments.
Companies owned by non-residents must comply with enhanced due diligence procedures, including beneficial ownership disclosure, proof of funds legitimacy, and additional tax reporting obligations. These requirements add 2-4 weeks to the purchase timeline and increase legal costs by €500-€1,500.
Non-EU companies require consular legalization of corporate documents rather than simple Apostille certification, creating additional complexity and processing time. Tax authorities may also require more detailed annual reporting on property ownership and income generation.
Companies based outside the EU must appoint a fiscal representative in Spain for tax purposes and maintain higher levels of documentation transparency compared to EU-based entities.
How are capital gains taxed differently for companies versus individuals when selling property?
Companies pay capital gains tax at the flat corporate tax rate of 25% on the difference between sale price and adjusted acquisition cost, while individuals face capital gains tax at sliding rates from 19-26% depending on the gain amount.
Corporate capital gains calculation allows full deduction of acquisition costs, improvements, selling expenses, and accumulated depreciation taken during ownership. Individual calculations follow similar principles but with more restrictions on deductible improvement costs.
Companies can potentially defer capital gains tax through reinvestment strategies or structured exchanges, while individuals have limited options for capital gains deferral except for primary residence rollovers under specific conditions.
The effective tax rate for companies remains constant at 25% regardless of gain size, while individual rates increase progressively: 19% on gains up to €6,000, 21% on gains from €6,000-€50,000, and 26% on gains exceeding €50,000.
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How does inheritance planning work when property is held by a company?
Property held through a Spanish company simplifies inheritance planning by transferring company shares rather than the property itself, potentially avoiding Spanish inheritance tax obligations for non-resident heirs.
Succession planning through company ownership allows gradual transfer of shares over time, gift tax planning strategies, and potential use of holding company structures to minimize tax exposure. Share transfers require notarial documentation but avoid property registry changes and associated costs.
Non-resident heirs of company-owned property may avoid Spanish inheritance tax rates of up to 34% by inheriting company shares instead of direct property ownership. However, proper legal structuring is essential to achieve these tax benefits legitimately.
The inheritance process for company shares typically takes 2-4 months compared to 6-12 months for direct property inheritance, reducing legal costs and administrative complexity for international families with Spanish real estate investments.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Purchasing property through a Spanish company offers significant advantages for investors seeking tax optimization and inheritance planning benefits, despite higher setup and maintenance costs.
The Spanish Limited Liability Company (SL) structure with €3,000 minimum capital provides the most efficient vehicle for property ownership, offering 25% flat tax rates and comprehensive expense deductions that often outweigh the additional compliance requirements.
Sources
- LawAnts - Buying Property in Spain Through a Company
- Legaliuris - Buying Property in Spain Through a Company
- Terreta Spain - Buying Property Through a Company
- LawAnts - Buying a House in Spain
- HelloHere - Property Purchase Timeline in Spain
- Lawyers Spain - Minimum Capital Share for Spanish Companies
- Bolder Group - Legal Structures in Spain
- Hessler del Cuerpo - Spanish Company Forms Comparison
- My Lawyer in Spain - Property Ownership Options
- UTrust - How to Invest in Spain Using a Company