There are no tax advantages, but there are many extra costs and tax liabilities
Hi All,
Just a brief note to clarify a frequent occurrence for which we receive requests for advice at our Law office.
Many clients are advised to set up limited companies to buy properties in Spain or sometimes it is suggested that they purchase the shares of an existing limited company which is the legal owner of a property.
Should you be thinking of buying a real estate property (either for your own use or as an investment), never use a limited company for this purpose. Limited companies are for running a business, not for holding ownership of real estate properties.
Despite what you are told by many investment and financial companies about the advantages of limited companies, I can confirm that there are no tax advantages or savings of any kind to be gained by using a limited company, but there are many extra costs and potential tax liabilities.
You must always purchase your real estate in your own name. It is much simpler, cheaper, and safer. You should never set up a company or purchase the shares of an existing company that holds the ownership of a property, just to buy real estate. The ownership of a limited company or shares in a limited company would imply taxes to be paid and a risk of taking over the company’s previous duties or commitments.
Please also note that apart from the costs and risks of setting up a company or buying an existing company, you would also be liable to pay the annual maintenance costs. Years pass by very quickly and you will see that having a company would involve spending money like water, with no benefits at all.
Finally, please also be aware that the Spanish Tax Office considers that if you are using a property owned by a company you should be paying rent for said property to your own company. This would implicate an important tax liability for the company who would have to pay annual corporate taxes at the rate of 25 % of the assumed annual rental that you should be paying to the company.
CONCLUSION: Never set up a company to buy a property, nor purchase an existing company holding ownership of real estate. You should always purchase properties in your own name.
And if you have already made the mistake of using a company to buy a property, we would recommend that you liquidate it ASAP and register the property in your own name. This way you would avoid an unpleasant claim from the tax office and would also save a lot of money by avoiding the maintenance costs.
If you have any further questions or doubts regarding this matter, or need assistance for liquidating your Ltd company, please do not hesitate to contact us.
MARBELLA SOLICITORS GROUP
Jose M. Lopez-Avalos – Solicitor
Tel. 952 901 225 – mail@marbellasolicitors.com
This is such a fun idea. I keep telling myself I need to be more crafty. Zondra Jules Gabriella
Really appreciate you sharing this post. Really looking forward to read more. Awesome. Laurel Inglis Hayden
I have been reading the posts, and I pretty much agree with what Mary said. Nona Jamil Kenelm
Great post. I will be going through a few of these issues as well.. Camellia Gard Nerin
This is my first time visit at here and i am in fact happy to read everthing at alone place. Gretal Raimundo Yona
I truly appreciate this blog post. Thanks Again. Want more. Hannie Trumann Bessy
Hello! I simply want to offer you a huge thumbs up for the great information you have here on this post. I am coming back to your site for more soon. Florry Gottfried Courcy
Major thanks for the blog article. Really looking forward to read more. Really Great. Modestia Simon Darach
Weekly or when the news is important, we always write news, we like you to be able to read them, best regards Modestia.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
I blog frequently and I seriously thank you for your information. Your article has truly peaked my interest. Katheryn Mathias Einberger
Thank you Katheryn for your comments, it is always nice to read them.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
There is certainly a lot to know about this subject. I love all of the points you have made. Darsie Ganny Wengert
It’s true Darsie, this is a subject for a lot of reading.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
I like reading an article that will make men and women think. Also, many thanks for allowing for me to comment. Alie Odell Lynsey
Greetings Alie, it is always good to have other points of view.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
Major thanks for the blog post. Thanks Again. Cool. Sena Kirk Linetta
Thank you very much Sena, we always try to keep up to date with the news.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
Only wanna remark that you have a very decent site, I enjoy the layout it actually stands out. Gabriellia Munmro Christin
Thank you very much Gabriellia, we have recently redesigned our website, we are glad you like it.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
You must be very astute at research and writing. This shows up in your original and unique content. I agree with your primary points on this topic. This content should be seen by more readers. Sharity Stirling Edwin
Thank you very much Sharity, every topic we propose we try to make it interesting, you can recommend the site to people like you who could get valuable information from these publications. Best regards.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
I was excited to uncover this great site. I need to to thank you for ones time due to this fantastic read!! I definitely savored every bit of it and i also have you bookmarked to look at new stuff in your website. Kym Stephan Rexford
Thank you for your comment Kym.
It is always a pleasure to be able to share information that will help resolve any questions you may have. We are at your service.
Marbella Solicitors Group
+34 952 901 225
mail@marbellasolicitors.com
It’s a shame you don’t have a donate button! I’d without a doubt donate to this superb blog!
I suppose for now i’ll settle for bookmarking and adding
your RSS feed to my Google account. I look forward to new updates and will share this website with my Facebook
group. Talk soon!