Why it doesn’t pay to own property in Spain through a company
27 Jun 17
As tax laws have changed in recent years the disadvantages of owning Spanish property through a company have increased, says Jason Porter, director of European IFA firm Blevins Franks.
Again, if the property is available to shareholders, they pay a market rent to the company.
Distributions of profits are liable for Spanish income tax.
The company is required to pay non-resident tax.
Rental income and capital gains are taxed in Spain at company level at 19%.
Some of Spain’s double tax treaties, including with UK, Germany and France, include a clause allowing Spain to tax shareholdings of foreign companies which mainly own Spanish real estate.
Therefore shares in these companies are subject to Spanish wealth tax for non-Spanish residents.
Tags: Spain
