Spain is one of the most accessible European markets for international property investment. Foreign nationals — whether from EU member states or third countries — face no meaningful restrictions on purchasing Spanish real estate. The structural choices available to a buyer are broadly similar to those in other civil law jurisdictions: individual ownership, co-ownership, Spanish company, foreign company, or a trust-equivalent. However, the interaction between Spanish property law, succession law (now partly EU-harmonised), and the non-resident property tax regime makes the choice of structure consequential from the outset.

This guide is for general information only and does not constitute legal or tax advice. Spanish law and tax rates change; always seek independent advice from a qualified Spanish lawyer (abogado) and tax adviser (asesor fiscal) before making any investment decision.

Freehold in Spain

Spanish property law is based on a Napoleonic civil law tradition. The concept of freehold — plena propiedad — is well established. The buyer acquires full ownership of the property (the apartment, villa, or commercial unit) and, where applicable, the land on which it stands. Title is registered in the Registro de la Propiedad (Land Registry). There is no leasehold in the English sense; residential property is almost always purchased on a full-ownership (freehold equivalent) basis.

Horizontal property (comunidad de propietarios): Most apartment buildings and urbanisations in Spain operate under the Ley de Propiedad Horizontal (Horizontal Property Act), which governs the relationship between individual unit owners and the community of owners. Community fees (comunidad charges) are payable for the maintenance of common areas, pools, gardens, and lifts. These are set annually by the community and are a genuine ongoing cost.

Urban vs rural land: Residential property built on urban land (suelo urbano) is straightforward to purchase. Rural land (suelo rústico) and agricultural land are more complex — not all rural land may be legally built upon, and local planning rules (urbanismo) govern what is permissible. Some buyers have discovered that properties built on rural land without proper licences carry enforcement risk. Due diligence on planning status is essential.

NIE Number: A Prerequisite for Any Purchase

Before any foreign national can purchase property in Spain, they must obtain a Número de Identificación de Extranjero (NIE) — a tax identification number for foreigners. Without an NIE, a deed of sale (escritura) cannot be registered at the Land Registry, and taxes cannot be paid. Obtaining an NIE can be done in Spain (at a Police National station) or through a Spanish consulate in the buyer's home country. It is a bureaucratic step, not a substantive restriction, but failing to obtain it in advance delays the purchase.

Individual Ownership (Personal Name)

The most straightforward structure. The buyer purchases in their own name; the escritura (notarised deed of sale) is signed before a Spanish Notario and registered at the Land Registry. A single individual or up to a defined number of named co-owners can hold title.

Advantages: Simple; no corporate compliance costs; full use of the personal capital gains tax exemption on the principal residence (for Spanish tax residents, the main home exemption applies if proceeds are reinvested); clean title and exit.

Tax implications for non-residents:

Transfer taxes on acquisition: For second-hand (resale) property: Impuesto sobre Transmisiones Patrimoniales (ITP), the property transfer tax, at regional rates typically ranging from 6% to 10% depending on the autonomous community (e.g., Andalusia is 7%, Catalonia and Valencia are 10%, Madrid is 6%). For new-build property sold by a developer: IVA (VAT) at 10% plus Actos Jurídicos Documentados (AJD — stamp duty equivalent) at regional rates.
Non-resident income tax (IRNR): Non-residents owning Spanish property are subject to IRNR. If the property is rented out, rental income is taxed at 19% for EU/EEA residents or 24% for non-EU residents. If the property is not rented out but available for personal use, an imputed income (deemed rental income) of 1.1%–2% of the cadastral value is taxed annually at the same rates.
Capital gains on disposal: Taxed at 19% for EU/EEA residents and 19% for non-EU residents (the same rate applies to both following EU harmonisation). Importantly, the buyer is required to retain 3% of the purchase price from the sale proceeds and pay it directly to the Spanish tax authority (Agencia Tributaria) as a withholding on potential non-resident capital gains — the seller can then claim any overpayment back.
Wealth tax (Impuesto sobre el Patrimonio): Spain levies a wealth tax on the net value of Spanish assets held by non-residents. The tax-free threshold for non-residents is typically €700,000 (the precise threshold and rates vary by autonomous community). The Solidarity Tax on Large Fortunes introduced in 2023 also applies to Spanish property held by non-residents with Spanish assets above €3,000,000.

Joint Ownership (Proindiviso / Copropiedad)

Two or more individuals can hold Spanish property jointly (proindiviso). Spanish civil law provides for defined ownership shares (cuotas partes) — unlike English joint tenancy, there is no automatic survivorship; each co-owner holds a defined fractional interest that they can (in principle) sell, mortgage, or bequeath independently.

Co-owners have a right to request partition (división de la cosa común) at any time, which can force a sale if co-owners disagree. This is a significant practical consideration for investors who co-own with a business partner rather than a family member. A private agreement between co-owners (pacto de indivisión) can delay this right, but cannot permanently eliminate it under Spanish law.

For married couples, the applicable matrimonial property regime determines how property is owned. Under Spanish law, the default regime (in most regions) is sociedad de gananciales (community property), which means property acquired during the marriage is jointly owned regardless of who pays. Non-Spanish couples may bring their own matrimonial regime from their home country, but this should be declared and registered.

Spanish Company (Sociedad Limitada — SL)

A Spanish Sociedad Limitada (roughly equivalent to a UK private limited company) can own Spanish property. This can be appropriate for:

Multiple properties where professional property management and corporate rental income accounting are beneficial.
Situations where the investor wants to own property in Spain while maintaining a corporate structure in their home country.
Genuine commercial property businesses (hotel, tourist apartment operation) where the business structure naturally fits property ownership.

Tax profile for an SL:

Rental income is subject to Impuesto de Sociedades (corporate tax) at 25%.
Capital gains on property disposal are also included in corporate taxable income.
The SL does not pay IRNR; instead, distributions to non-resident shareholders are subject to withholding tax at 19% (potentially reduced under applicable double tax treaties).
ITP surcharge: transfers to a company may attract the 3% higher rate of ITP (operaciones societarias).

Annual compliance: Filing annual accounts with the Registro Mercantil (Companies Registry), quarterly tax returns, audit (if above certain thresholds). Administrative burden is meaningful.

Transfer tax advantage: There is no 3% CGT withholding obligation when a company sells a property (as the seller is a Spanish legal entity in the tax system rather than a non-resident individual).

For a single residential investment or holiday home, an SL is generally not cost-efficient. For a portfolio of three or more properties or a commercial development, the corporate structure may be justified.

Offshore Company and Foreign Structures

Historically, some non-residents held Spanish property through offshore companies to defer or reduce Spanish taxes. Spain has progressively closed these routes:

Non-resident company owners of Spanish property are subject to the same IRNR rules as individuals (including imputed income tax on vacant properties).
A special 3% annual levy on the cadastral value of Spanish property held by entities based in zero-tax or non-cooperative jurisdictions (jurisdicciones no cooperativas) was introduced and remains in force.
Spain requires disclosure of overseas assets above €50,000 (Modelo 720), though this obligation applies to Spanish tax residents, not non-residents.

Offshore structures for Spanish property are generally inadvisable for a typical residential investment. If a foreign company already exists and holds multiple European assets, professional advice should be taken on whether a Spanish property can be cleanly held within that structure.

Inheritance and Succession

EU Succession Regulation (EU 650/2012): This EU regulation, in force since 2015, allows individuals to elect the law of their nationality (rather than the law of the country where the property is situated) to govern their succession. A foreign investor who is not a Spanish national can therefore include in their will a statement electing their home country law to apply to their entire estate — including Spanish property.

This is a significant practical advantage: rather than Spanish succession law (with its rules on forced heirship — the legítima, which gives children mandatory shares), the investor's national law applies. For example, a British investor can elect English law, under which there is no forced heirship.

Practical steps:

Instruct a Spanish lawyer to prepare or review a Spanish will (testamento), or ensure your existing will includes the EU Succession Regulation election expressly.
A Spanish will that deals only with Spanish assets is efficient and avoids the delay of applying to have a foreign will recognised in Spain.
Register the Spanish will with the Registro Central de Actos de Última Voluntad.

Impuesto de Sucesiones y Donaciones (ISD — Inheritance Tax): Spain levies inheritance tax on the transfer of Spanish property on death. Rates and allowances vary significantly by autonomous community — Andalusia and Madrid have effectively abolished ISD for direct descendants and spouses, while other regions retain meaningful rates. Non-resident heirs who are not Spanish nationals pay ISD at a national rate which can be substantial (up to 34% with a multiplier coefficient for larger inheritances, before regional allowances). Always verify the regional rules for the specific property location.

Annual Ownership Taxes and Costs

IBI (Impuesto sobre Bienes Inmuebles): Local council tax levied annually on all property owners, based on the cadastral value. Typically €200–€2,000+ per year depending on location and property value.
Basura (refuse collection tax): Small annual charge levied by the municipality.
IRNR imputed income: As noted above — annual tax on deemed rental income even for unlet property.
Wealth tax: Applicable if Spanish assets exceed the relevant threshold.
Community fees: Ongoing; check the annual budget before purchase.

Practical Recommendations for Foreign Investors

Obtain your NIE before or early in the purchase process — delays are common and can hold up exchange.
For a single investment property, personal ownership is usually the simplest and most cost-effective structure.
Consider the autonomous community for ISD purposes — owning in Madrid or Andalusia and leaving to a spouse or children carries a far lower inheritance tax burden than the same property in Catalonia.
Draft a Spanish will, or expressly address Spanish property in your existing will with a nationality law election under the EU Succession Regulation.
Factor in the 3% CGT withholding when selling — plan for cash flow on disposal.
Get an NIE and fiscal representation in place before purchase — a Spanish fiscal representative (representante fiscal) is not legally required for all non-residents but simplifies IRNR filings significantly.

How Global Investments Can Help

Global Investments has extensive experience supporting non-EU investors purchasing in Spain, including along the Costa del Sol, Costa Blanca, Madrid, and the Balearics. We work with qualified Spanish lawyers and tax advisers who specialise in non-resident acquisitions and can guide you through NIE applications, structure selection, and ISD planning for your specific situation.

Contact our team to discuss your investment in Spain.

This guide reflects the law as understood in June 2026. Spanish property law, regional tax rates, and the EU Succession Regulation remain subject to change. This is not legal or tax advice. Always seek independent professional advice before proceeding.

This guide is for general information only and does not constitute financial, legal or tax advice. Programme rules, prices and tax rates change; verify current requirements with a qualified adviser before acting.

Property Ownership Structures in Spain for Foreign Investors