Buying Property in Spain: Own Name vs a Company (SL)

Should you buy your Spanish property in your own name, or through a Spanish company (Sociedad Limitada, SL) — or even a foreign company? It is one of the first questions serious buyers and investors ask, and the right answer depends entirely on your circumstances. Choose wrong and you can pay tax you never needed to, or take on accounting and compliance costs that swallow the benefit.

At Platinum Legal Spain, our English-speaking lawyers and tax advisers help buyers structure Spanish property ownership correctly from the outset. This guide compares the main options in plain English.

Option 1: Buying in your own name

The vast majority of expat buyers purchase personally — it is the simplest and usually the cheapest route. You buy as an individual (or joint owners), and the property is held in your name(s).

Advantages:

• Simple, low-cost purchase — no company to set up or run.
• No annual company accounts, corporate tax returns or audit costs.
• Straightforward access to a non-resident mortgage.
• Main-home reliefs (such as capital-gains reinvestment relief) are available to resident owners.

Points to weigh:

• Non-resident owners file annual Modelo 210 and pay tax on any rental income.
• High-value ownership can engage wealth tax or the solidarity tax.
• On death, the property falls under Spanish inheritance tax rules and may need a Spanish probate.

Option 2: Buying through a Spanish company (SL)

Holding property through a Spanish SL can make sense for investors with several properties, for genuine business use (for example holiday-rental businesses run at scale), or where succession planning across many heirs is a priority. See our page on a Spanish company for property investors.

Potential advantages:

• Income and gains taxed under the corporate tax regime, which can suit an active rental business.
• Easier to bring in co-investors and to transfer ownership by moving shares rather than the property.
• A layer of liability separation for a genuine business.

The downsides are real:

• Set-up and running costs — incorporation, annual accounts, corporate tax filings and bookkeeping.
• Anti-abuse rules — a company that merely holds a home for the owners’ private use (an entidad patrimonial) gets few of the business tax advantages and can trigger benefit-in-kind issues if shareholders use the property.
• Buying the property into the company still attracts transfer tax or IVA in the normal way.

Option 3: A foreign company — usually a trap

Holding Spanish property through an offshore or foreign company is rarely advisable today. Spain imposes a special annual tax (gravamen especial) of 3% of the cadastral value on real estate owned by entities resident in certain low-tax jurisdictions, alongside heavy reporting. What once looked like privacy or tax planning is now often an expensive liability.

The inheritance angle

One reason buyers consider a company is succession. Transferring shares can be simpler than transferring property across borders and multiple heirs. But Spanish and international inheritance tax still bites, and the analysis is genuinely complex — it should be done with proper cross-border advice, not assumed. See our guide to inheritance in Spain and the Spanish vs foreign will question.

So which should you choose?

• Buying a holiday home or your main residence? Almost always own name — simpler and cheaper, with the reliefs individuals get.
• Building a portfolio or running a real rental business? A Spanish SL may be worth the overhead — model the numbers first.
• Considering a foreign company? Get advice before you do — the special 3% tax and reporting usually outweigh the perceived benefits.

The decision affects purchase tax, annual tax, rental tax, wealth tax, capital gains on sale and inheritance — so it pays to model it before you sign, not after.

How we help

We model the personal-versus-company comparison for your actual situation — your residency, the number and value of properties, your rental plans and your succession goals — and then implement whichever structure is genuinely best, including incorporating and running the SL if that is the answer. We can act for clients abroad under a power of attorney.

A worked comparison: holiday home vs rental portfolio

The right answer becomes obvious once you put real numbers against it. Two typical situations:

• A couple buying one holiday home for €350,000. Personal ownership wins easily — one set of purchase costs, simple annual Modelo 210 filings, and access to individual reliefs. A company here would add incorporation and yearly accounting costs for no real benefit, and could create a benefit-in-kind charge for using their own property.
• An investor buying several units to run as a letting business. Here a Spanish SL may earn its keep — income and gains under the corporate-tax regime, easier co-investment, and ownership transferred by moving shares. The overhead is justified by the scale and the genuine business activity.

The pivot point is usually whether the property is a private home or a genuine business with several assets.

Joint ownership for couples and families

Most couples simply buy in joint names, each owning a defined share (often 50/50). The split can be set for tax or succession reasons, but it should be deliberate, not accidental. If the relationship changes, the cleanest way to consolidate ownership into one party is usually an extinción de condominio, which is taxed far more lightly than a sale. Families buying together should also think ahead to inheritance from the outset.

Resident vs non-resident: how it changes the maths

Your tax residency materially affects the comparison. Non-residents face annual Modelo 210 obligations, possible wealth tax on Spanish assets, and 19% (EU/EEA) or 24% tax on rental income. Residents are taxed on worldwide income but gain access to main-home reliefs and, for long-term residential letting, a meaningful income reduction. The resident vs non-resident position should be modelled alongside the ownership-structure decision, not separately.

Can you change the structure later?

Yes, but it is rarely cheap. Moving a property you already own personally into a company is itself a taxable transfer — you can face transfer tax and potentially capital gains, plus the company set-up costs. That is exactly why the decision is best made before you buy, when the structure can be put in place at no extra transfer cost. If your circumstances later change, we can advise on whether restructuring is worthwhile.

Frequently Asked Questions

Should I buy property in Spain in my own name or through a company?

For a holiday home or main residence, your own name is almost always simpler and cheaper. A Spanish company can make sense for investors with several properties or a genuine rental business, but it carries set-up and running costs and anti-abuse rules.

Is it cheaper to buy through a Spanish SL?

Not usually for a single home. You still pay transfer tax or IVA on the purchase, plus the cost of incorporating and running the company, and a company holding a home for private use loses most business tax advantages.

What is the 3% tax on companies owning Spanish property?

It is a special annual tax (gravamen especial) of 3% of the cadastral value charged on real estate held by entities resident in certain low-tax jurisdictions, which makes offshore ownership of Spanish property expensive.

Can a company help avoid Spanish inheritance tax?

It can simplify transfers by moving shares rather than property, but Spanish and cross-border inheritance tax still applies. The analysis is complex and needs proper advice rather than assumptions.

Can I move a property I already own into a company later?

Yes, but transferring it into a company is itself a taxable transaction, so it is far better to decide the right structure before you buy.

Can you advise and set up the structure if I live abroad?

Yes. We model the options, incorporate and run the SL if appropriate, and complete the purchase under a power of attorney, all remotely.

Can a married couple split ownership shares for tax in Spain?

Yes. Couples commonly own in defined shares (often 50/50), which can be set for tax or succession reasons. The split should be a deliberate decision taken with advice, as it affects rental tax, wealth tax and inheritance.

Does buying through a company avoid wealth tax in Spain?

Not reliably. Spain looks through structures, and a company holding a home for the owners’ private use brings its own costs and anti-abuse rules. Wealth-tax planning should be modelled properly rather than assumed to follow from using a company.

Is it better to buy in one spouse’s name or both?

It depends on each spouse’s residency, income and the succession plan. Joint ownership is common and flexible, but the best split is a case-by-case decision — worth modelling before you buy.

Can a non-resident set up a Spanish SL to buy property?

Yes, a non-resident can incorporate and own a Spanish SL, but it brings incorporation, accounting and corporate-tax obligations. It usually only makes sense for a genuine property business, not a single home.