The Spanish real estate market remains highly attractive to foreign buyers. For many, it involves a second home on the coast or inland, often combined with rental income as an investment.
Entrepreneurs who already own a company frequently ask themselves whether it is possible—and beneficial—to purchase property in Spain through their company.
The answer depends on the purpose of the purchase, how the property will be used, and the fiscal implications in Spain. Below, you will find what you need to consider today.
1. Private purchase: usually the simplest option
If you are buying mainly for personal use—a second home for yourself or your family—a private purchase is generally the most logical and straightforward choice.
In Spain, you pay the following taxes upon purchase:
Transfer tax (ITP) on resale properties. Rates vary by autonomous region, generally between 6% and 10%, but can rise to 12–13% in certain regions such as the Balearic Islands for higher price categories.
VAT (IVA) on new-build properties. The standard rate is 10%, supplemented by a registration tax (AJD – Actos Jurídicos Documentados), which is set regionally and usually ranges between 1% and 1.5%.
After the purchase, every owner pays the annual municipal property tax (IBI – Impuesto sobre Bienes Inmuebles).
This tax is calculated based on the cadastral value of the property—an administrative valuation determined by the Spanish Cadastre (Catastro Inmobiliario), part of the Ministry of Finance.
The cadastral value takes into account several factors:
- the location of the property,
- the size,
- the use or purpose of the building,
- the age of the construction,
- the building quality and materials,
- the surrounding infrastructure, and
- whether the property is in an urban or rural area.
The cadastral value is generally lower than the market value (often by 30% to 40%), although this is only a practical guideline, not a legally fixed ratio.
IBI rates typically range between 0.4% and 1.1% of cadastral value, depending on the municipality.
Even if you do not live in Spain, you remain taxable there for owning real estate. Spain levies the Non-Resident Income Tax (IRNR), even when the property is not rented out. The return is filed through Modelo 210.
For more information on Modelo 210, we refer to our previous article.
2. Purchasing through a company
A company can acquire real estate in Spain without issue. This is common for businesses that intend to rent out the property or use it commercially (for example, as an office, guest property, or investment).
a. Identification and formalities
Several identification numbers are required for the purchase:
- The representative signing the deed in Spain must obtain a NIE (Número de Identidad de Extranjero). All details on the NIE and how to apply for it can be found here.
- The company itself must obtain a NIF (Número de Identificación Fiscal). This number is mandatory for any foreign company carrying out a legal or fiscal action in Spain.
How to apply for a NIF for your company
1. When does your company need a NIF?
A NIF is the Spanish tax identification number for companies. Your company needs a NIF as soon as it performs any action in Spain with tax consequences, such as:
- purchasing property,
- signing a notarial deed,
- opening a Spanish bank account,
- receiving rental income,
- filing a tax return (such as IRNR).
Without a NIF, a company cannot carry out legally valid or fiscal actions in Spain.
2. Appointing a legal representative
Your company must appoint a representative to act on its behalf in Spain. This person must have:
- a valid identity document,
- in most cases, a NIE number,
- a power of attorney, if the person is not an authorised director.
3. Required documentation
To apply for a NIF, you must submit documents proving that your company legally exists:
- the deed of incorporation and company statutes,
- a recent extract from the commercial register,
- a power of attorney (if the representative is not an authorised director),
- the representative’s ID.
Foreign documents generally require:
- legalisation via apostille, and
- a sworn Spanish translation.
4. Filing Modelo 036
The NIF is requested using the official form Modelo 036.
In the form, select:
“Solicitud de asignación de NIF a entidad.”
The form can be submitted:
- online through the Sede Electrónica, or
- in person at a Spanish tax office.
All legalised documents must be attached. If anything is missing, the tax office will request additional documentation.
5. Issuance of the NIF
Once approved, your company will receive an official NIF number. This number is required for:
- notarial property purchases,
- banking procedures,
- tax filings,
- invoicing,
- contracts.
6. Obligations after receiving the NIF
After issuance, your company is registered with the Spanish tax authorities. This may create additional obligations, such as:
- reporting changes of address, statutes, or representation,
- filing IRNR returns if the company owns property,
- VAT obligations if business activities take place.
b. Tax framework
The applicable taxation depends on the degree of presence in Spain:
Without a permanent establishment
If the company owns property in Spain but has no office, staff, or ongoing business activity there, it is taxed in Spain as a non-resident. It pays IRNR on Spanish-source income (e.g., rent), filed via Modelo 210.
With a permanent establishment
If there is a sustained business activity in Spain (e.g., a local rental office or management team), the company becomes subject to Spanish corporation tax (Impuesto sobre Sociedades). The standard rate is 25%.
3. When is a company structure advantageous?
Buying through a company is only worthwhile in practice when there is genuine exploitation or investment activity.
Possible advantages:
- The company may deduct various costs (maintenance, insurance, building depreciation).
- Rental income is treated as business income in Spain.
- Company shares can be easier to transfer later than the property itself.
Important considerations:
- For private use by a director or shareholder, a market-rate rent must be charged.
- There are double filing obligations in Spain and in the company’s home country.
- Double taxation risks may arise when selling the property or distributing profits.
For buyers who only want a second home for personal use, a company structure is rarely fiscally beneficial.
4. Practical steps during the purchase process
- Determine the purpose of the purchase: primarily a second home, an investment with rental income, or a combination of both.
- Check your company statutes: is property exploitation permitted?
- Apply for the identification numbers in time: NIE for the individual, NIF for the company.
- Conduct due diligence on the property. This means an in-depth legal and financial review, including title, debts, permits, and cadastral records. The NB-ESTATES legal department can assist you throughout this process.
- Sign the notarial deed (escritura) and have the property registered in the Spanish Land Registry (Registro de la Propiedad).
- Handle the required tax filings: IRNR (Modelo 210) or, where applicable, corporation tax (Impuesto sobre Sociedades).
5. Conclusion
For foreign individuals purchasing a second home in Spain, private ownership is generally the simplest and most transparent fiscal choice.
Buying through a company may be advantageous when the property is rented out, used commercially, or part of a broader investment strategy. In such cases, thorough professional advice is essential, both regarding Spanish taxation and the tax rules in your home country.
Because regulations and tax rates differ between regions and may change annually, up-to-date guidance is crucial. Always have a specialised advisor review your case before signing the purchase deed.