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