Investing in Spanish property from abroad: in your own name or through a company?

For an international investor, buying in Spain is rarely just a matter of buying a home. It means deciding who will own the property (you personally, a Spanish company or a company in your home country), and that decision, often taken in a single afternoon in the rush to sign the arras (the deposit contract that usually precedes completion), shapes the tax bill for the entire life of the asset: on acquisition, in every year of ownership, on sale and on the day it passes to your heirs. This guide covers what has changed in recent months, what should be reviewed before signing and how to compare the available structures by running the numbers.

What has changed: the golden visa is gone and a new tax hangs in the balance

With effect from 3 April 2025, Ley Orgánica 1/2025 abolished the residence permit for investors commonly known as the golden visa. Buying property in Spain, however expensive, no longer confers a right of residence. Those who wish to settle here have other routes (non-lucrative residence, the international remote work visa or the permits for entrepreneurs and professionals) and, if they are moving their tax residence, should first look at the special regime for inbound workers, known as the Beckham Law, because the application is subject to strict deadlines.

The other development is one that does not yet exist. In January 2025 the Spanish Government announced a levy of up to 100% of the value on residential purchases by non-residents from outside the European Union. At the date of this article it has not been approved, nor has it made any progress through Parliament, and there are serious doubts as to whether it is compatible with the Constitution and with EU law. It should not shape a transaction today, but it does justify one precaution: where completion is deferred, the contract should provide for what happens if the tax treatment changes before the deed is signed.

Before signing the arras

The legal review of a high-end property is less a formality than an exercise in spotting expensive problems. The starting point is the Registro de la Propiedad (Land Registry): title, charges, easements and whether the registered description matches the Catastro (cadastre) and what has actually been built. The second is planning, which on the coast and on rural land is where the unpleasant surprises tend to surface: extensions built without a licence, homes classed as fuera de ordenación (non-conforming, cannot be legalised or extended) or structures that simply cannot be legalised. The third is the debts that travel with the property, such as IBI (annual local property tax) or the charges owed to the owners' association. And if the business plan includes holiday lets, the regional and municipal rules and the building's bylaws must be checked: since April 2025, the Ley de Propiedad Horizontal (Spanish condominium law) has required a favourable vote of three fifths of the owners before that activity can begin in a building (art. 17.12 LPH, as worded by Ley Orgánica 1/2025).

On the formal side, a foreign buyer needs an NIE (foreigner identification number) to sign the deed, and the funds must arrive through traceable channels that are identified in the deed. An investment by a non-resident must be declared to the Registro de Inversiones Exteriores (Foreign Investment Register) under Real Decreto 571/2023; where the transaction is executed before a Spanish notary and the investor provides the relevant details, the notary files the information directly. If the property is on the eastern Costa del Sol, our page on property investment in Frigiliana and Nerja sets out the risks typical of the area.

Tax at the four stages of the investment

On acquisition. A resale property is subject to Impuesto sobre Transmisiones Patrimoniales (ITP, transfer tax), whose rate is set by each autonomous community and varies widely at the top end of the market: in 2026 it stands at 6% in Madrid, 9% in the Valencian Community (11% above one million euros) and rises progressively to 13% in Catalonia or the Balearic Islands for the highest values. New-build property bears VAT (IVA, 10% on residential property) plus Actos Jurídicos Documentados (stamp duty). On top of this come notary and registration fees and, where applicable, the cost of arranging the mortgage.

During ownership. A non-resident individual is liable to Impuesto sobre la Renta de No Residentes (IRNR, non-resident income tax) even if the property is not let: deemed income of 2% of the cadastral value is attributed (1.1% if that value has been revised in the last ten years), taxed at 19% for residents of the EU or the European Economic Area and at 24% otherwise. If the property is let, an EU resident pays 19% on net income, after deducting expenses, whereas everyone else pays 24% on gross income, with no deductions at all. In addition, assets located in Spain are subject to Impuesto sobre el Patrimonio (wealth tax), with a general exempt threshold of 700,000 euros and the option of applying the rules of the autonomous community where most of those assets are located, and above three million euros the Impuesto Temporal de Solidaridad de las Grandes Fortunas (solidarity tax on large fortunes) may come into play.

On sale. A non-resident's capital gain is taxed at 19%, and the buyer is required to withhold 3% of the price and pay it over on account of that tax, so the seller recovers the difference if the amount withheld exceeds the tax due. The plusvalía municipal (municipal land value tax) is also payable. On inheritance. Property in Spain is subject to Spanish Impuesto sobre Sucesiones (inheritance tax) wherever the heir lives, and the differences between autonomous communities are enormous. This is the stage that receives the least planning and costs the most.

Personal ownership or a company?

Buying in your own name is the simplest option and, for a second home for personal use, usually the most efficient: there is no structure to maintain, a sale is taxed at 19% and the owner can use the property without any further consequences. Its weak point is succession, which should be planned from the moment of purchase.

Buying through a Spanish company makes sense for a portfolio of rental properties or an operation that includes services: income is taxed under Impuesto sobre Sociedades (corporate income tax), with expenses and depreciation deductible, and profits can be reinvested without passing through the investor's hands. There are costs to weigh against this: bookkeeping and annual accounts, withholding tax on dividends paid to the foreign shareholder (limited by double tax treaties or, in some cases between EU companies, eliminated altogether) and, if the shareholder uses the property, the obligation to value that use at market rates. And a point that often catches investors out: selling the shares instead of the property does not avoid transfer tax where control is acquired of a company whose assets consist mainly of real estate, because the law taxes the transaction as if the properties themselves were being bought (art. 338 de la Ley 6/2023, de los Mercados de Valores).

Buying through a foreign company is common among investors who already hold their wealth this way at home. The company will be taxed in Spain as a non-resident on income from the property, and the applicable double tax treaty needs to be reviewed. The special annual charge of 3% on cadastral value that alarms so many investors has, since the 2021 reform, applied only to entities resident in non-cooperative jurisdictions; a company based in an EU country or a treaty country does not bear it. What this route does demand is transparency about beneficial ownership and a structure with a genuine economic rationale, because the Spanish tax authorities scrutinise companies without substance very closely.

Frequently asked questions

Does buying a home in Spain still give a right to residence?

No. The residence permit for investors was abolished on 3 April 2025 by Ley Orgánica 1/2025. Residence now has to be obtained through other routes, such as non-lucrative residence or the international remote work visa.

Has the 100% tax on buyers from outside the EU been approved?

No. It was announced in January 2025 but, at the date of this article, it has neither been approved nor made any progress in the Spanish Congress. If it were ever approved, its precise scope and its compatibility with EU law would need to be examined.

Do I have to pay tax even if I do not let the property?

Yes. A non-resident is taxed every year on deemed income of 2% (or 1.1%) of the cadastral value, at 19% if resident in the EU or the EEA and at 24% otherwise, in addition to IBI and, depending on their assets in Spain, wealth tax.

Will I save tax by buying through my foreign company?

It depends on how the property will be used, where the company is based and the investment horizon. The special 3% charge only affects companies in non-cooperative jurisdictions, but the company will be taxed in Spain on income from the property, and personal use by the shareholder has tax consequences. The options have to be compared, with figures, case by case.

How we work at Satya Legal

We act for investors based outside Spain throughout the transaction, in Spanish, English, German, French or Italian: design of the structure with a tax simulation of all four stages, Land Registry and planning due diligence, negotiation of the arras and the purchase contract, incorporation of the company where appropriate and ongoing compliance as a non-resident. We work on a fixed fee and the first consultation is free: tell us about your transaction. See how we work in property investment for non-residents.