The two structures at a glance
Personal ownership: the property is registered directly in your name (or joint names) in the Registro de la Propiedad. Standard acquisition taxes apply (ITP 7% on resale in Andalucia, or IVA 10% + AJD 1.2% on new build). Annual costs: IBI (council tax), and if resident, IRPF on rental income (or Beckham Law flat rate). Patrimonio on Spanish assets if non-resident; effectively zero if Andalucian-resident (100% bonificacion).
Company ownership via Spanish SL: the property is purchased by a Sociedad Limitada — Spain's equivalent of a UK private limited company or German GmbH. The SL pays Impuesto sobre Sociedades (IS — Corporate Tax) at 25% on net profits (rental income minus deductible expenses). The property appears on the SL balance sheet as a fixed asset. VAT treatment differs: an SL purchasing a property for business purposes (rental, development) can reclaim IVA on the purchase. Buying through an SL for "business" (professional use, rental-ready designation) triggers IVA at 21% rather than the 10% residential rate — but an IVA-registered SL recovers that input VAT if the property generates taxable outputs.
Foreign company holding (common structure): the property is owned by a foreign company (often a UK Ltd, Cyprus Ltd, Luxembourg SA, or BVI) with the foreign entity visible in the Registro. This approach has been progressively restricted since 2012. Spain's IRNR rules require a 3% withholding on property sales by non-resident entities; the 2012 anti-avoidance rules (ATAD implementation) treat foreign companies with predominantly Spanish real estate as de facto Spanish residents for property-holding purposes. The BICCIS/Pillar Two environment makes pure offshore structures increasingly non-viable for post-2025 transactions.
Acquisition tax — the first-cost comparison
Personal acquisition (resale): ITP 7% of declared purchase price in Andalucia.
SL acquisition — resale: ITP at 7% (SLs pay the same ITP rate as individuals on resale residential property). No advantage on acquisition if buying a completed residential property.
SL acquisition — new build: IVA 21% (commercial rate, not 10% residential) + AJD 1.2% if the SL intends to use the property commercially (rental business). However, an IVA-registered SL can deduct the input VAT against output VAT from rental receipts. Net IVA cost if the SL generates rental income: potentially zero over time, but requires active rental management and VAT registration. If the SL holds the property but does not actively rent it or deduct input VAT, the 10% residential IVA rate applies instead.
ITPAJD on transfers between companies: transfers of a company (accion or participacion in an SL) that holds Spanish property as the primary asset are subject to ITP at 7% on the underlying property value under Article 314 TRLITPAJD anti-avoidance rules. This effectively closes the "sell the company instead of the property" exit route for property-holding shells — the tax applies regardless.
Ongoing tax — Patrimonio, IRPF, Sociedades
Personal ownership — Andalucian resident: Patrimonio 0% (100% bonificacion). IRPF on rental income at progressive scale or Beckham Law flat 24%.
Personal ownership — non-resident: Patrimonio on Spanish assets above exemptions at 0.2%-2.5%. IRNR at 19% (EU/EEA) or 24% (non-EU) on rental income (or deemed 1.1% of cadastral value if not rented, same rates). Capital gains taxed as IRNR on disposal.
SL ownership: no Patrimonio on the property directly (it belongs to the company, not the individual). However, the shareholder's participaciones in the SL are Spanish-sited assets for Patrimonio purposes — the SL structure does not eliminate Patrimonio on the underlying value; it relocates it to the participaciones. For Andalucian residents, this distinction is irrelevant (both are zero-rated). For non-residents, the structure should be modelled carefully.
IS (Corporate Tax): the SL pays 25% on net profit. Deductible expenses include mortgage interest, depreciation (3% per year on the built structure, not the land), management fees, repairs, insurance, community fees, and IBI. An SL with active rental operations in Marbella typically generates a tax charge of 10-20% of gross rental receipts after deductions — often lower than the IRPF/IRNR personal rate on the same income for higher-bracket individuals.
Capital gains at exit — the critical difference
Personal exit (resident): capital gains on Spanish property are taxed as IRPF ahorro rate — 19% on gains up to €6,000; 21% on €6,000-€50,000; 23% on €50,000-€200,000; 26% on €200,000-€300,000; 27% above €300,000 (2026 rates). If the property is the primary residence and the owner reinvests in another primary residence within 2 years, the gain can be tax-exempt. Buyers over 65 years of age who sell their primary residence are exempt from capital gains without the reinvestment requirement.
Personal exit (non-resident): IRNR applies to the capital gain. Rate: 19% for EU/EEA residents; 24% for non-EU. A 3% withholding on the sale price is deducted by the buyer and paid to the Hacienda on behalf of the seller; any excess over the final tax liability is reclaimed.
SL exit — sell the property: the SL pays IS at 25% on the capital gain. The proceeds sit in the SL and then require a further tax event (dividend to the shareholder) to extract. Dividend withholding under the Spain-home country DBA typically runs 5-15% depending on the treaty (Spain-UK DBA: 0% for 25%+ holdings; Spain-Germany DBA: 5% for 10%+ holdings). Net blended rate can be higher than personal exit for buyers with clean tax positions.
SL exit — sell the shares (participaciones): the transaction is subject to ITP at 7% on the underlying property value under Article 314 (anti-avoidance, noted above). This removes the structural advantage that company structures historically provided by allowing a "share sale" to avoid ITP.
Conclusion: for most Marbella buyers with straightforward tax positions, personal ownership is simpler and often more tax-efficient on exit. Company structures add value in specific scenarios: active multi-property rental portfolios where IS rate and deductions are favourable versus personal IRPF rate; developers or promoters where IVA recovery is structural; and complex cross-border inheritance scenarios where a specific holding structure simplifies the transmission.
The right questions to ask your advisor
The company structure question cannot be answered in isolation from:
1. Your tax residency at the time of purchase and your expected residency at exit 2. The home country tax treaty with Spain and its specific rates on dividends, capital gains, and inheritance 3. Whether the property will be actively rented (material bearing on IS efficiency and IVA recovery) 4. The anticipated holding period (longer holds benefit more from IS depreciation deductions; short holds may face IS on a large gain immediately) 5. Your inheritance intentions — the SL structure can simplify generational transfers in some scenarios and complicate them in others
Advisors you need: a Spanish gestor or tax advisor (asesor fiscal) qualified to advise on IS and IRNR; a Spanish property lawyer (abogado) for the purchase itself; and in most cases a dual-qualified or international tax specialist who can model the cross-border interaction.
Muse Selection works with several dual-qualified advisors covering UK-Spain, Germany-Spain, and US-Spain scenarios and can make introductions at the brief stage. Reach info@musemarbella.es.
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Frequently asked questions
Should I buy property in Spain personally or through a company (SL)?
For most buyers with a straightforward tax position, personal ownership is simpler and often more tax-efficient. SL structures benefit active rental portfolios (IS 25% on net income, deductible depreciation and expenses) and situations where IVA recovery is valuable. Key risk: Article 314 anti-avoidance applies ITP 7% on share sales of property-holding shells, negating the traditional "sell the company" exit benefit.
What is the corporate tax rate on rental income in Spain?
A Spanish SL (Sociedad Limitada) pays Impuesto sobre Sociedades (IS) at 25% on net rental profit after deductible expenses (mortgage interest, depreciation at 3%/year on built structure, management fees, insurance, IBI, community fees). Effective rate on gross rental receipts is typically 10-20% after deductions — often lower than personal IRPF for higher-bracket individuals.
Can I sell a Spanish property company (SL) to avoid property transfer tax?
No. Article 314 of TRLITPAJD closes this route: a transfer of shares in a company whose primary asset is Spanish real estate is subject to ITP at 7% on the underlying property value, regardless of whether it is structured as a share sale. This anti-avoidance rule applies to companies where real estate represents the majority of assets.