Buying Property in Spain Through a Family Trust
Are you thinking about buying property in Spain? Many people consider buying property in Spain through a family trust. But how realistic is that option?
Is it possible to purchase property in Spain through a family trust?
Spain does not generally recognise a family trust as a legal entity. However, this does depend on the legal document regulating the trust in question. In some cases, it is possible to register property in favour of a family trust.
Would it be possible to buy property in Spain via a company controlled by a family trust?
Buying property in Spain through a limited company, controlled by a family trust or otherwise, is a very realistic and common option. Below we outline the main advantages and disadvantages of buying property in Spain as a limited company as opposed to as an individual.
Buying Property in Spain as an Individual |
Buying Property in Spain Via a Company |
||
Pros |
Cons |
Pros |
Cons |
| Lower start-up costs compared to a company.
|
Set up costs: minimum of €1,000. Increases according to the share capital. | ||
| Lack of anonymity. The information contained in the Spanish land registry is accessible to anyone who registers with them on the Internet or requests information in their offices, in which case there is no need for them to even register. | Greater anonymity. It is possible to limit who is able to view the owner and shareholders of a company.
|
||
| No running costs.
|
Company running and maintenance costs. | ||
| Better mortgage: It’s easier to obtain a mortgage, and at a better loan-to-value ratio than when buying a property through a company. | Worse mortgage: It’s more difficult and expensive to obtain a mortgage. | ||
| More difficult to control the amount of inheritance tax due.
|
Easier to control the amount of inheritance tax due, especially if the shareholders are non-residents. | ||
| You will pay more capital gains tax if you decide to sell your property in the future. | You will pay less capital gains tax if you decide to sell your property in the future.
|
||
| If you are a non-Spanish resident, you will have to pay non-resident personal income tax yearly calculated on the cadastral value of the property. | No annual corporate tax due if there isn´t profit.
|
||
| You can’t deduct the property’s annual running costs against the profit on selling the property. This is only possible with limited running costs and home improvements. | You can deduct the property’s annual running costs from your profits.
|
||
Consult with Andalucía Lawyers
Are you considering buying property in Spain through a family trust or company? Contact us to arrange a consultation about your particular situation either in person in one of our offices, via telephone or online.
Related Articles by Andalucía Lawyers