Buying property in Spain through a company (SL) vs as an individual: the foreign buyer's 2026 guide

The question arrives in our inbox once a week, usually from a buyer looking at their second or third Spanish property. My lawyer in London says I should set up a Spanish SL and buy the flat through that — better tax, easier succession. My gestor in Málaga says the opposite. Who's right?

Both, actually. And that's why so many foreign buyers get this wrong.

Company ownership of Spanish real estate is one of those decisions that looks like a tax optimisation and turns out to be a lifestyle constraint. The corporate wrapper genuinely does open doors — deducting expenses against rental income, cleaner inheritance planning, keeping personal wealth invisible to the Spanish register — but it also brings annual accounting costs of €1,500–€4,000, a 25% corporate tax rate that only beats personal rates above a specific income threshold, and a set of anti-abuse rules (the sociedades patrimoniales regime, the personal-use imputation, the Article 314 anti-avoidance clause on share transfers) that were written specifically to stop people doing what your London lawyer just suggested.

This is the 2026 foreign-buyer's guide to that decision. It covers what a Spanish SL actually is, the tax comparison at each stage of ownership (buying, holding, renting, selling, passing on), the four cases where the SL genuinely wins, and the far more common cases where it quietly costs you money for a decade before you notice.

What a Sociedad Limitada actually is

A Sociedad Limitada (SL, or SRL) is Spain's equivalent of a UK Ltd, US LLC, or French SARL. It is a private limited company with:

• Minimum share capital of €3,000, paid up on incorporation. Since the 2022 Startup Law, you can now incorporate with as little as €1 under the SL en formación sucesiva variant, but until the capital reaches €3,000 you must retain 20% of annual profits and shareholders remain personally liable for the shortfall. For property ownership, everyone still uses the standard €3,000 version.
• Separate legal personality. The company owns the flat; you own shares in the company. Your name does not appear on the nota simple — the company's name and CIF do.
• Limited liability. Your personal assets are, in principle, ring-fenced from company debts. In practice, banks lending to a property SL almost always require a personal guarantee from the shareholder, so this protection is thinner than it looks for financed purchases.
• Its own tax number (CIF), its own annual accounts filed at the Registro Mercantil, its own corporate tax return (Modelo 200), its own quarterly VAT and withholding returns if it has employees or professional-service costs, and its own RETA obligation for the managing director (typically €300–€400 per month) unless carefully structured.

Setting one up costs €600–€1,200 in notary, register, and gestor fees, plus the €3,000 capital, and takes two to three weeks. Running it costs €1,500–€4,000 per year in accounting and filings — the range depends on rental activity, VAT status, and whether you file audited accounts (only required above certain thresholds).

Those costs are the floor. The tax comparison has to overcome them before the SL starts saving you money.

Purchase tax: identical for both

The single most common misconception is that buying through a company reduces the purchase tax. It does not.

Secondhand property attracts ITP (Impuesto sobre Transmisiones Patrimoniales) at 6–10% depending on the region — same rate whether the buyer is an individual or a company. Andalucía sits at 7%, Madrid at 6%, Valencia at 10%, Cataluña at 10% (11% above €1M).

New-build property attracts 10% VAT (IVA) + roughly 1.2–1.5% AJD (stamp duty) — again, same rate for individuals and companies. The one narrow exception: a company registered for VAT whose primary activity is buying and selling property can potentially reclaim the IVA on a new-build purchase if the property is then sold or rented commercially with VAT. For a foreign buyer setting up a single-property SL to hold a second home, this exception does not apply and the IVA is a straight cost.

The share-transfer trap. People sometimes imagine they can sell the flat later by transferring the company's shares instead of the property — dodging ITP for the buyer. Article 314 of the Ley del Mercado de Valores was written specifically to close this. If more than 50% of a company's assets are Spanish real estate not used in an active business (i.e. it is a patrimonial company), the share transfer is retaxed as if the underlying property had been sold, and full ITP applies. In 2026, tax authorities apply this rigorously and the assumption is guilty-until-proven-innocent.

So on the way in, the SL costs you the same as personal ownership, plus €600–€1,200 to set the company up. The comparison is entirely about what happens during and after ownership.

The annual holding cost, side by side

This is where the numbers actually diverge. Take a scenario a lot of foreign buyers recognise: a €500,000 flat in Valencia, bought as a second home, used personally for eight weeks a year, rented out for twenty weeks, sitting empty the rest of the time.

Individual, non-resident, non-EU

• Modelo 210 imputed income for the weeks the flat is not rented — 1.1% of the valor catastral (or 2% if the catastral value hasn't been revised in the last decade) × 24% flat rate. On a €500,000 flat with a catastral value of, say, €200,000, that's €200,000 × 1.1% × 24% ≈ €528/year.
• Modelo 210 rental income for the weeks it's rented — 24% on gross rental income, no expenses deductible. Twenty weeks at €1,500 gross = €30,000 × 24% = €7,200/year.
• IBI (municipal property tax), basura, comunidad fees, home insurance — all payable but not deductible against the rental income for a non-EU non-resident.

Annual tax bill: roughly €7,700, ignoring wealth tax which we'll come to.

Individual, non-resident, EU/EEA

Identical structure to the above except the rate drops to 19% and expenses become deductible. Deduct interest, IBI, insurance, community fees, repairs, agent commissions, depreciation (3% of the construction value per year). A well-managed EU non-resident rental typically drops taxable income by 40–60% versus the gross figure.

Annual tax bill: roughly €2,500–€3,500 on the same rental income — the EU/EEA benefit is enormous and is one of the two most under-appreciated facts about Spanish non-resident tax. It also disappeared for British buyers after Brexit; see the British buyer's guide for the specific consequences.

Company (SL), non-resident shareholder

The SL pays Impuesto sobre Sociedades at the general rate of 25% on its net profit. Rental income minus deductible expenses (interest, IBI, insurance, community fees, repairs, depreciation, accountant fees, RETA) gets taxed at 25%. That looks worse than the EU individual's 19% but better than the non-EU individual's 24% gross.

Then two things happen that most first-time analyses miss.

First, the patrimonial company surcharge. A company whose assets are more than 50% non-business real estate (a single flat held for rental, in almost every case, qualifies) is a sociedad patrimonial. This is not a separate tax — it is a status that removes several benefits: no 15% reduced rate for new companies, no compensation of losses across group companies, no exemption on the sale of subsidiaries, and — critically for property-holding structures — the shares held by the shareholder do not qualify for the wealth-tax exemption for business assets. Your SL still pays 25%, but you lose the escape hatches that make corporate ownership genuinely attractive for operating businesses.

Second, the personal-use imputation. This is the rule that catches almost every foreign buyer using an SL for a second home. If you personally use a property owned by your SL — even for one weekend a year — the tax authority treats this as retribución en especie, a benefit in kind. The SL must charge you (the shareholder) rent at market value, or Hacienda will impute market rent to the company as income and tax you personally on receiving a benefit worth the same amount. You get taxed twice on rent you never actually paid. For a €500,000 flat used personally for eight weeks a year, this can easily add €3,000–€5,000 of imputed tax per year on top of everything else.

Add the €2,000–€3,000 annual accounting cost, the €3,600–€4,800 in RETA social security if you administer the company yourself, the double taxation of dividends when you eventually take the profit out of the SL as a shareholder (25% at the company + 19–28% withholding on the dividend), and the patrimonial-company disadvantages, and the SL loses badly against the individual EU/EEA scenario, and roughly ties the non-EU scenario before you count the personal-use trap.

For a second home the shareholder personally uses, an SL almost always loses. Full stop.

When the SL actually wins

There are four scenarios where the numbers reverse and the corporate wrapper pays for itself. If you don't recognise your situation in one of the four, you probably shouldn't be using an SL.

1. Multi-property rental portfolios above roughly €200,000 of net annual profit

At this scale, the flat 25% corporate rate beats the top personal IRPF bracket (which hits 45–54% depending on region above €300,000 combined income). The SL also lets you retain profits inside the company to reinvest in further acquisitions without triggering the personal top rate on undistributed earnings. This is the classic build a portfolio case, and it's the one your London lawyer is imagining. It stops making sense below three or four properties.

2. Genuine hospitality or short-let businesses

If the property is run as an active hospitality business — booked out professionally, staffed, marketed as a brand, potentially with a licencia turística and dedicated management — it can escape patrimonial classification and access the reduced 15% rate for new companies, the wealth-tax business exemption on the shares, and the 95% inheritance-tax reduction on family-business shares. See the tourist rental licence guide for what "active business" requires in 2026 (spoiler: one flat on Airbnb is not enough — you typically need a physical office and a dedicated employee).

3. Cross-border succession planning where the family sits in a low-inheritance-tax jurisdiction

Spanish shares in a Spanish SL can be transferred by lifetime gift with careful use of the 95% family-business reduction (again, requires the SL to be an operating business, not a patrimonial). Even without the reduction, a share transfer is administratively cleaner than a property transfer — no notary at the property, no re-registration at the Registro de la Propiedad — which matters for families spread across multiple countries. But note: the underlying property is still Spanish-situs, so Spanish inheritance tax on the shares can still apply based on the deceased's residence and the heirs' residence. See the inheritance tax guide for the interaction.

4. Owning through an existing foreign holding structure

Some foreign families already hold their global wealth through a Luxembourg SOPARFI, a UK Ltd, a Delaware LLC, or a family trust. In those cases, adding a Spanish SL as the local operating layer beneath the existing structure can be the cleanest way to slot the Spanish property into the group — subject to Spain's CFC rules, its treaty network, and the 2023 tightening of the sociedad de mera tenencia rules that target passive foreign holding structures. This is not a DIY decision; if this describes you, an international tax adviser has to model it.

Outside these four, foreign buyers using an SL for one or two Spanish properties usually spend €25,000–€40,000 in cumulative extra costs over a decade for no tax benefit — and often for a genuine tax penalty once you count the personal-use imputation.

The wealth-tax question

Spain's Impuesto sobre el Patrimonio is levied by the autonomous regions. Rates go from 0% (Madrid, historically; largely offset by the Solidarity Wealth Tax since 2023) up to about 3.75% in Extremadura and the Balearics, with tax-free allowances typically starting at €700,000 per person and a further €300,000 exemption on the primary residence.

For a non-resident, wealth tax applies only to Spanish-situs assets — including the flat (if held personally) or the shares in the Spanish SL (if held through a company). At first glance the SL looks like it should be transparent — you own shares, not the flat, so the SL "wraps" the wealth-tax exposure differently.

In practice, since 2022–2023 reforms, Spanish shares whose value derives more than 50% from Spanish real estate are treated as Spanish-situs for wealth tax purposes regardless of whether they are held directly or via a foreign holding company. The SL does not escape wealth tax on a property that would otherwise attract it. It can, however, help order the deductions and interact more favourably with the primary-residence exemption if the shareholder is a Spanish resident using the property as their main home — but that is a different scenario than the second-home case most foreign buyers are in.

For the Solidarity Wealth Tax (the national tax that applies from €3M of net wealth), the same principle applies: real-estate-heavy shares in a Spanish SL count as Spanish assets and cannot be structured out of scope by a foreign shareholder.

The RETA question

If you are the administrador (managing director) of a Spanish SL and hold more than 25% of the shares (or 50% with family), you must register as autónomo societario under Spain's special self-employed social security regime, RETA. The minimum contribution for a societario in 2026 is around €377/month (€4,524/year) — regardless of whether you draw a salary.

This is the single largest ongoing cost of an SL for most foreign buyers, and one of the two things people forget to model. There are structural workarounds — using a Spanish-resident director you pay separately, or structuring the shareholding so no single shareholder crosses the threshold — but each has its own costs, and each defeats the keep it simple appeal of the corporate wrapper.

If you are a non-resident who doesn't live in Spain, RETA can sometimes be avoided if the effective management is offshore. This is a case-by-case Hacienda determination and is being scrutinised more aggressively since 2024. Do not assume you can skip it.

Selling: capital gains, on both sides

Individual sales of Spanish property attract capital gains tax at 19–28% depending on the gain for residents, 19% for EU/EEA non-residents, and 24% for non-EU non-residents — all with the sale price reported on Modelo 210 within four months. See the selling as a non-resident guide for the Modelo 211 3% retention and the plusvalía municipal.

Sales by a Spanish SL are taxed at the corporate rate of 25% on the gain. That looks worse than 19%. But the SL can then reinvest the gross proceeds inside the company without triggering the 19–28% dividend withholding that a personal shareholder would face if they wanted to redeploy the cash in a new property.

Where the corporate structure is genuinely selling — closing down, distributing proceeds to the shareholders — the combined effective tax rate (25% corporate + 19–28% dividend withholding, with some relief via double-tax treaties) is typically 38–47%, materially worse than the 19% an EU individual would have paid on the same gain. This is the exit trap: the SL is easy to enter and expensive to leave.

Common mistakes and myths

Five things you will hear from an over-confident adviser that are not quite right in 2026.

• "An SL avoids Spanish inheritance tax on the property." It does not, on its own. It changes the mechanism (you inherit shares, not real estate), but the shares in an SL that owns Spanish property are Spanish-situs for inheritance tax. The 95% family-business reduction only applies if the SL runs an active business — not a passive rental.
• "An SL keeps your name off the nota simple." It does — the nota simple shows the SL as the owner. But the Registro Mercantil shows the SL's shareholders publicly, and Hacienda knows exactly who owns the shares via the Modelo 232 related-party return. Privacy from a casual searcher, yes. Privacy from the state, no.
• "I can pay all my personal costs through the SL." Extremely dangerous in 2026. Hacienda's inspections of small property SLs have tightened significantly since 2023, and personal expenses charged to the company are the fastest route to a simulación tributaria finding — with penalties of 50–150% of the tax underpaid plus interest.
• "New-build IVA is recoverable through the SL." Only if the SL is a proper VAT-registered business selling or renting with VAT (commercial premises, dedicated apartamentos turísticos under a hospitality regime). A holding SL for a residential rental cannot recover the 10% IVA on a new-build.
• "The SL protects me from Spanish creditors." Limited liability holds for company-level trading debts. It does not hold when the shareholder personally guaranteed the mortgage (the norm), when the tax authority pursues a shareholder for the company's unpaid taxes under the responsabilidad subsidiaria rules (increasingly common since 2020), or when a court pierces the corporate veil for abusive structures.

The short version

For a foreign buyer thinking about a Spanish SL as a wrapper for one or two properties, the honest 2026 answer is: almost certainly no. The purchase tax is identical. The annual holding cost is higher after accounting, RETA, and corporate tax. The personal-use imputation quietly punishes anyone using the flat for themselves. The wealth-tax escape doesn't exist. And the exit tax on winding the company down is materially worse than a personal sale.

The SL genuinely wins in four cases: multi-property rental portfolios above roughly €200,000 of net annual profit; genuine hospitality businesses with real operations; cross-border succession planning where the corporate wrapper simplifies transfers between jurisdictions; and existing international family holding structures where the SL is the local layer, not the entire structure. In those cases, run the numbers with a Spanish tax adviser and a lawyer in your home jurisdiction working together — never one without the other.

For everyone else, own it in your own name, file Modelo 210 once a year, keep your life simple, and put the €25,000 of ten-year corporate overhead into the property instead.

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Buvivo helps foreign buyers find Spanish property without scrolling through portals built for the Spanish market. Post your requirements and matching agents and owners come to you — and if the structuring question matters to your purchase, our partner network of cross-border tax advisers can sit alongside the property search rather than being bolted on after completion.

Related reading: The Beckham Law for foreign buyers moving in · Spain property taxes explained · Modelo 210 non-resident tax guide · Spanish inheritance tax and wills for foreign owners · Selling property in Spain as a non-resident · Hidden costs of buying property in Spain