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Do you own a holiday property in Spain through a Spanish limited liability company?

Not long ago it was usual for foreign buyers to acquire property in Spain through Spanish companies to optimize their tax liabilities.

The Spanish Revenue has recently started reviewing the tax situation of companies which do not carry out any economic activity other than owning property. The Revenue is taking an aggressive policy against them as it considers that these companies have a property available to its directors who should be paying a market rent. The company will be taxed on the deemed income received.

If you already own a property through a Spanish company it may be advisable to seek advice as to the potential costs and taxes in either dissolving the company and transferring it into the names of the beneficial owners or alternatively regularizing the companies tax affairs, otherwise you may be facing hefty surcharges and penalties from the Spanish Revenue.

October 2018
Alvaro Aznar Azcárate
Solicitor and Spanish Abogado
Sykes Anderson Perry Limited