Ownership Structures for Foreign Property Buyers in Spain: A Complete Guide

Spain consistently ranks among Europe's most popular destinations for foreign property buyers, particularly in Andalucía, the Costa Blanca, the Balearic Islands, and Madrid. The country has a well-established legal framework for foreign ownership, transparent land registration, and a range of ownership structures to suit different investment objectives. The Golden Visa programme's closure in April 2025 has removed one incentive, but Spain's fundamentals — climate, lifestyle, EU legal system, and property liquidity — continue to attract international buyers.

This guide covers the main ownership structures for foreign buyers as of 2026. Spanish tax law varies by region and changes regularly; always engage a qualified Spanish tax adviser (gestor or asesor fiscal) and a Spanish property lawyer (abogado) before completing any transaction.

Individual Ownership

Sole or Joint Ownership

Any foreign national can purchase Spanish property in their own name without restriction on nationality or residency status. You will need a NIE (Número de Identificación de Extranjero) — Spain's foreigner identification number — before signing any property contract or completing at a notary. NIE applications are made at Spanish consulates or police stations within Spain.

Cost summary — purchase:

Cost / Tax	Rate / Note
Transfer Tax (ITP)	6–11% depending on region and property value (resale property)
VAT (IVA) + AJD	10% IVA + ~1.5% AJD (new-build from developer)
Notary fees	~0.2–0.5% of declared price
Land Registry fees	~0.1–0.25%
Lawyer fees	Typically 1% of purchase price
Non-resident surcharge	None — no nationality surcharge in Spain

Non-Resident Income Tax (IRNR)

Non-residents owning Spanish property are subject to IRNR whether or not they rent the property out.

If the property is let:

• EU/EEA residents: 19% on net rental income (expenses deductible — mortgage interest, depreciation, insurance, community fees, etc.)
• Non-EU/EEA residents: 24% on gross rental income (no deduction for expenses). This is a significant disadvantage for buyers from non-EU countries such as the UK post-Brexit, USA, Australia, and others.

If the property is not let (personal use or vacant):

• An imputed income (renta imputada) charge applies equal to 2% of the cadastral value (or 1.1% if the cadastral value was reviewed after 1994). This is taxed at the applicable IRNR rate. For a property with a cadastral value of €100,000, the imputed income would be €2,000, taxed at 19% for EU/EEA residents = €380 per year.

IRNR returns are filed quarterly (if renting) or annually. Non-resident owners must appoint a Spanish tax representative if they are non-EU.

Capital Gains Tax for Non-Residents

Capital gains on the sale of Spanish property by non-residents are taxed at 19% on the net gain (sale price less acquisition cost, including purchase taxes and improvement costs). The 3% retention at source (retención) is important: the Spanish buyer or their notary is required to withhold 3% of the sale price and pay it to HMRC (AEAT) on behalf of the non-resident seller. This is an advance payment against the final CGT liability, with a reclaim available if actual CGT is less than 3% of the price.

Double-tax treaties between Spain and the seller's country of residence may affect the final position.

IBI (Impuesto sobre Bienes Inmuebles)

IBI is the annual municipal property tax, levied by the ayuntamiento (local council) based on the property's cadastral value. Rates vary by municipality but typically range from 0.4% to 1.1% of cadastral value per year. Cadastral values are generally well below market values. This tax applies regardless of ownership structure or residency status.

Inheritance Tax in Spain

Spain's inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones) is levied at regional level, and the variation is dramatic:

Region	Effective IHT rate for close relatives (spouse/children)
Madrid	Near-zero (99% reduction)
Andalucía	Near-zero (99% reduction after 2019 reform)
Galicia	Very low (near-exempt for direct family)
Catalonia	Moderate — reductions but national scale partially applies
Valencia	Partial reductions — check current rate
Balearic Islands	Moderate — significant reductions for direct family
National scale (default for non-residents)	Up to 34% on amounts over ~€798,000

For non-residents, the rule is: if the deceased was not a Spanish tax resident, Spanish inheritance tax is governed by the national scale (not a regional scale). However, following EU Court of Justice rulings, non-residents who are EU citizens can elect to apply the regional rules of the region where the property is located. Non-EU nationals (UK post-Brexit, USA, etc.) may be limited to the national scale, which can be significantly higher.

This is one of the most important structuring considerations for high-value property purchases in Spain.

Spanish Company: Sociedad Limitada (SL)

A Sociedad Limitada (SL) is Spain's private limited company, equivalent to a UK Ltd or French SARL. It can own Spanish property and is used by investors who:

• Hold multiple Spanish properties
• Operate a commercial letting or hospitality business
• Want to deduct corporate expenses (including full mortgage interest)
• Are claiming VAT refunds on commercial developments

Tax Position — Spanish SL

Tax	Rate / Note
Corporate income tax (IS)	25% (15% for new companies in first two profitable years)
Rental income	Deduct expenses including mortgage interest, depreciation
Capital gains	Taxed as corporate income at 25%
IBI	Same as individual — annual municipal tax
Dividend withholding	19% on dividends distributed to non-resident shareholders
Transfer on sale of shares	Share sale (not property transfer) — may avoid ITP

VAT (IVA): A Spanish SL engaged in commercial property activities is VAT-registered. On commercial property transactions, IVA can be reclaimed. For residential property, IVA is not reclaimed (residential is ITP, not IVA).

Pros and Cons of Spanish SL

Factor	Pro	Con
Income tax	25% corporation tax vs. up to 45% IRNR for individuals	Double taxation on extraction (dividend withholding 19%)
Mortgage interest	Fully deductible	—
Inheritance	Share transfer — potentially simpler succession	Capital gains may be triggered on restructuring
ITP on sale	Share sale possible — avoids ITP	AEAT increasingly challenges share sales as avoidance
Annual compliance	—	Accounts, corporate returns, audit if thresholds met

For a single residential investment property, the SL structure rarely justifies the compliance costs. For two or more properties, or where rental income is substantial, the maths can favour corporate ownership.

Non-EU Buyers and the Beckham Law

The Beckham Law (Régimen Especial de Trabajadores Desplazados) allows qualifying individuals who relocate to Spain for work or business to elect to be taxed as non-residents for up to six years, paying a flat 24% rate on Spanish-source income up to €600,000 (19% on capital gains). This is not directly an ownership-structure issue, but it affects the tax rate applicable to rental income from Spanish property for buyers who relocate to Spain.

Modelo 720: Overseas Asset Declaration

Modelo 720 is a disclosure obligation for Spanish tax residents with assets abroad exceeding €50,000 per category (bank accounts, investments, real estate). Penalties for non-compliance have been controversial — the original draconian penalties were largely struck down by the European Court of Justice in 2022, but the obligation to file remains. Non-residents are not required to file Modelo 720 for their Spanish property; it only applies once you become a Spanish tax resident.

SOCIMI (Spanish REIT)

Spain's listed property investment vehicle is the SOCIMI (Sociedad Anónima Cotizada de Inversión en el Mercado Inmobiliario), broadly equivalent to a REIT. SOCIMIs are listed on Spanish exchanges, distribute at least 80% of rental income, and benefit from a 0% corporate tax rate (provided distribution requirements are met). Investing via listed SOCIMIs is the simplest route for foreign investors who want diversified Spanish real estate exposure without direct ownership — but it is not individual property ownership and is beyond the scope of this guide.

Ownership Structure Comparison

Structure	ITP on Purchase	Rental Income Tax	Capital Gains	IHT Treatment	Annual Costs	Complexity
Individual non-resident (non-EU)	6–11% ITP	24% gross (no expense deduction)	19%	National scale (up to 34%)	IBI + imputed income tax	Low-Medium
Individual non-resident (EU/EEA)	6–11% ITP	19% net	19%	Regional rules may apply	IBI + imputed income tax	Low-Medium
Spanish SL company	6–11% ITP (on property)	25% corporation tax (expenses deductible)	25% (via corporation tax)	Shares subject to IS rules	IBI + annual accounts + filings	Medium-High
Spanish trust/foundation	Rarely used	Complex	Complex	Specialist territory	High	Very High

Practical Tips

NIE first: Obtain your NIE before any contract is signed — it is required at every step of the transaction.

Escritura and Land Registry: Ensure the purchase deed (escritura) is signed before a Spanish notary and registered at the Registro de la Propiedad. Unregistered purchases do not have full legal protection.

Community fees: Properties in urbanisations and apartment buildings pay community fees (gastos de comunidad). Check the community's financial health and any outstanding special levies before purchase.

Plusvalía municipal: On sale, a municipal capital gains tax (plusvalía municipal) is levied by the local authority on the increase in land value during ownership. The calculation was reformed in 2021 — check the current position with your lawyer, as it can be significant in areas with strong land value appreciation.

Residency implications: Spending more than 183 days in Spain in a calendar year generally makes you a Spanish tax resident, subject to IRPF (progressive rates up to 47%) on worldwide income. This fundamentally changes your tax position — plan your time carefully.

How Global Investments Can Help

Spain is one of our core markets. Our team can:

• Help you identify the right properties across the Costa del Sol, Costa Blanca, Balearics, and Madrid via our Spain listings
• Connect you with Spanish abogados and gestors who specialise in non-resident property transactions
• Model the after-tax return on rental income under different structures
• Advise on how Spanish property fits within your broader international portfolio

Explore our Spain property investment hub, read our best areas to invest in Spain, and review our Spain taxes and fees guide.

Disclaimer: Spanish tax law varies by region and changes frequently. The information in this guide reflects our understanding as of June 2026 but does not constitute legal or tax advice. Always seek independent, qualified advice specific to your circumstances and the region in which you are buying. The value of property investments can fall as well as rise, and you may receive back less than you invested.