Buying a Property in Spain through a Limited Company: advantages and disadvantagesFiscal 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.