- RosaRosa is an experienced English-speaking lawyer in Mallorca and provides expert legal advice and assistance in the following legal areas: Property conveyances, Inheritance, Family, Criminal, Business, Employment and Tax law.
There certainly are advantages to purchasing the property in the name of a foreign or Spanish based Company in Spain. You can either create a Spanish Limited Company and own the property indirectly by owning shares in the said Company.
This option is recommended when there is a need for relative anonymity, in which case you obviously cannot be administrator of the company –all information about administrators is public and can be easily found in the Spanish Mercantile Registry-.
It has also been asserted that purchasing via a company may reduce the liability to pay inheritance taxes in the future. However it should be borne in mind that the European Court of Justice has recently ruled that the Spanish tax authorities cannot charge different rates of inheritance tax for residents and non-residents and the relevant Spanish Laws have been modified accordingly, by Ley 26/2014, which came into force on January 1st, 2015.
The new legislation provides that European Union citizens, ordinarily resident in another European country, may benefit from the same deductions as are available to residents of the region in Spain in which their assets are located. Therefore, this tax liability may already be much lower than previously was the case.
It is also worth bearing in mind that, if you put the property in the name of a foreign company that does nothing other than merely hold this property in Spain, it is possible that the beneficiaries will need to pay inheritance taxes in Spain for having inherited a Spanish property, even though the property is transmitted in the country of origin together with the shares, if it is construed that the only objective of the company is to evade taxes. There would also be potential liability to fines in such as case.
Fiscal Obligations of Owning a Company
If buying via a corporate entity, you will also need to consider the following factors:
- Non-resident individuals or companies that are owners of a property in Spain that is not offered for rent to third parties (eg holiday makers), must pay a yearly “non resident” tax to the Spanish Tax authorities which is an amount equal to 24% of 1% of the rateable value of the said property. Meanwhile, Spanish Limited Companies that accrue a property pay corporation tax that varies between 0 and 30% of the profits, depending on how high they are. In both cases, there are other annual taxes, ie local tax for having a property in Spain -IBI- etc…
- Spanish companies are obliged to keep some records, such as shareholder’s registry, balance sheets, inventories, daily journals and to deposit annual reports and balances in the Spanish Mercantile Registry. You will therefore most likely need to budget for this to be managed on your behalf.
- Foreign companies need to name a tax representative in Spain and pay yearly tax representation.
Taxes Payable When Purchasing a Property
Taxes when purchasing a property in Spain are the same for individuals and Spanish companies, and they normally represent approximately 12% of the value of the property.
- Capital gains tax: typically, paid by the seller to the central government
- Government Transfer tax: may vary but normally 8% of the value of the property
- Notary fees
- Lawyer’s fees
- Land Registry fees.
- Capital Gains Tax (plusvalía), this is paid by the seller to the local administration if they are a Spanish resident -or retained from the price by the buyer if they are not.
– Purchasing a property in the name of a foreign company is a good choice if this company operates in Spain -ie, for renting or selling properties here, etc…- but not if the only reason for this is paying lower inheritance taxes in the future, since the Spanish law has been changed as a result of the recent European Court of Justice decisión.
– Purchasing the property in the name of a Spanish company for mere enjoyment involves the payment of annual taxes and reporting obligations. This will almost certainly require that the purchaser retains the services of a tax specialist to manage this responsibility, thereby incurring additional fees.
When taking into consideration all of the above, including the benefits and the drawbacks, if you are planning to buy a home in Spain for mere enjoyment, I would advise to do so in your own name.
Below is a list of recent reviews received from our clients, obtained via the Wufoo client survey platform:
- David Stack, Lliria, SpainThursday, June 21, 2018Francisca was extremely helpful. She made the whole process easy to understand. I would definitely recommend her service to friends.
- Susanna Buckley, United KingdomWednesday, June 20, 2018Lidia is very approachable and friendly and I never felt that anything was a problem.
She was also very sympathetic to my situation (my mother had passed away) and supportive. As soon as she was c...ontracted, she acted quickly to sort things out so that I could return home to the UK as soon as possible.
She always tried her best to answer any questions very quickly and promptly and matters proceeded without too much worry on my part.
- Wendy Dickson, MarbellaTuesday, June 19, 2018It was all done very quick. Very good value for money. How easy it all was to communicate via email.
- Peter & Anita Bradshaw, Leeds, EnglandMonday, June 18, 2018We could not be more happy with the service we received from Jaime.
He responded immediately to our enquiry and it was clear from the outset that he fully understood our position. It was vital tha...t Jaime acted quickly in this matter and he did so in a highly professional and competent manner, providing us with clear and concise updates throughout.
We found Jaime to be very polite and approachable and we believe his fees to be very reasonable. We would genuinely not hesitate to recommend his services.
Before contacting Jaime, our previous experiences of Spanish Lawyers had been appalling - in fact we needed Jaime's help to resolve issues which previous Lawyers had created. Our only regret is not finding Jaime sooner!
Thanks so much for all your help Jaime.
- Jan Neate, NerjaWednesday, May 30, 2018Very satisfied with the service provided by Beatriz. She extremely helpful and spoke more or less fluent English. We would definitely recommend her to friends.
- Serena Bhatia, LondonWednesday, May 30, 2018Anna has been nothing but helpful in providing information, sound advice and genuine care, My fiancé and I adore her! She is timely, professional and extremely knowledgeable about world wide law.
- Ronald Peter Downs, SpainTuesday, May 29, 2018A lady staff member took us under her wing and managed to sort out my residency. Overall no complaints.
- Tracey and Mike Iliffe Bradley, Colchester, United KingdomTuesday, May 29, 2018From our very first contact through to the end of our purchase, Rosa surpassed all expectations.
She was helpful, efficient, always quick to return our communications and a pleasure to deal with. ...We have already recommended her services to a friend.
- Cheryl, SevilleMonday, May 28, 2018Miguel was helpful and kind. We will use his service in the future.
- Ken & Margaret, TorreviejaThursday, May 24, 2018Pedro was extremely helpful, he couldn't have done more. We would definitely recommend his services to friends.
- Rl, AlicanteThursday, May 24, 2018Felt very comfortable at all times. Nothing was too much. Understood everything mentioned in our meeting. Very reasonable rate, money wise.
- KL, Valencia, SpainWednesday, May 23, 2018Inma is easy to talk to, is prompt in replying to emails, is helpful and above all achieved the solution I wanted.
- MF, LanzaroteMonday, May 21, 2018My lawyer Cristina was extremely understanding , friendly and reassuring. With Cristina on my side, it gave me confidence to continue.
- RA, ParisFriday, May 18, 2018The service I needed wasn't complex, just verification of documents, but the service was rapid, friendly and exactly what I needed.My lawyer Julia was bilingual.
- Sham Naib, Callao Salvaje, TenerifeFriday, May 18, 2018My lawyer Oliver was very helpful, always happy to assist. He professionally checked the law before dispensing advice.
- Smith, FranceFriday, May 18, 2018Caroline is bilingual and was very helpful throughout. There is nothing I would suggest to improve. I was very happy with the service and would definitely recommend to friends.
- SJ Thiele,Tuesday, May 15, 2018Inma was very helpful and we were very satisfied with the service overall. We would definitely recommend her services to friends.
- John Stecher, EnglandTuesday, May 15, 2018Very satisfied with the service received. OUr lawyer was very easy and straightforward to deal with. Would definitely recommend to friends.
- Cian O'Grady, IrelandTuesday, May 15, 2018We bought a property in spain and Lidia assisted us through the buying process.
She was very professional and reassured us throughout the process.Her english was very good and we felt that we got ...good value for our money.
- PJU, Torun, PolandWednesday, May 09, 2018Béatriz responded quickly to any queries I raised, with easily comprehensible answers.
Her fee was very reasonable and she proved to be a very personable and approachable person when we finally m...et at the Notary.
- Barry Gracey, Melbourne, AustraliaMonday, May 07, 2018I found Jaime helpful and responded promptly to my emails. I was very happy with the service provided and if needed would use him in the future
- Geraldine King, IrelandMonday, May 07, 2018I was extremely happy with Pedro,and Ana. They were honest,and answered my queries promptly.
Pedro had to evict my squatter tenants, and then organised an estate agent to sell my apt. This agent un...dertook renovating the apt, and got me a good price.
Pedro and his brilliant co-worker Ana finalised the sale and I received the money into my account, without me ever setting a foot in Spain.(Power of attorney).
I will be recommending Pedro to friends, who are going to sell their apartment in Torrevieja. I highly recommend him.
- Joy Ellis, SanxenxoTuesday, May 01, 2018Sabela was extremely professional in her dealings with us, very patient and understanding of the situation and gave very good advice and a good solution to our problem.
We feel very confident that... she has dealt with the complaint against a third party and know that if we need any further assistance in this matter she will be more than able to resolve it for us.
She responded immediately to our contact and arranged a meeting on site to enable us to explain fully the problem we had.
- Caroline R, BarcelonaTuesday, April 24, 2018Miguel has been great!
His English is excellent, he explains everything clearly, emails when he says he will, and is very efficient in the service he provides.
I'd definitely recommend him to ...friends.
- George Salib, LondonMonday, April 23, 2018Jose Antonio was very professional and has assisted me in every step of the purchase of my flat in Alicante.
He also assisted me by advising of the most suitable area according to my needs. His com...mitment and dedication is excellent.
Jose Antonio was very easy to approach and happy to help in any way he can.
I will definitely recommend him to my family and friends.
- Liezl Pulido, PhilippinesMonday, April 23, 2018Rosa never stopped working very hard, she went way above what she needed to do...she never gave up on me and always did more than I thought anyone would.
I am so blessed I got Rosa to help me I co...uldn't have gotten a better lawyer she's the best.
Thank you Rosa from the bottom of my heart you are a wonderful person, I am so grateful to you.
- KJB, United KingdomFriday, April 20, 2018Francisco was professional and efficient. Very good value for money.
- Duncan Martin, Wolverhampton, EnglandFriday, April 20, 2018Lidia, was extremely helpful and patient throughout the process.
She was very attentive and responsive and explained everything in detail.
Lidia represents excellent value for money and the so...lutions she recommended were very beneficial, especially as you hear and read about a lot of horror stories on the web.
Lidia was the best legal representative i have employed and i will always use her where Spanish legal affairs are concerned.
- Julie Smith, TorrellanoFriday, April 20, 2018I can't compliment my solicitor enough.
From our initial meeting right through to my ultimate divorce (with no unpleasant surprises the entire duration of the entire process), he immediately respo...nded to my many enquiries, always had mine and my daughter's best interests at the forefront of any considerations and was well worth every penny of his extremely reasonable fee.
Excellent value for money, totally approachable and very professional and understanding. I highly recommend him and will continue to retain his services for other matters in the future.
- SH, EnglandFriday, April 20, 2018Very satisfied with the service provided. Miguel was approachable and prompt in replying.