Purchasing property in Spain: private individual, company, or family foundation?
Buying property in Spain today is not only about fulfilling the dream of a home in the sun but increasingly a conscious investment decision. With the growing interest in the Costa del Sol market, however, a key question arises: in what form should you buy the property? Is it better to do it as a private person, through a company, or perhaps use a family foundation?
In this article, based on the experiences of Dream Property Marbella experts and topics discussed in the “Dream Property Talks” podcast, we explain the most important differences, costs, and consequences of each of these options.
What will you find in the article?
- Why does the form of purchasing property in Spain matter?
- Buying property in Spain as a private person
- Purchasing through a company: Polish company or Spanish S.L.?
- Family foundation and properties in Spain
- Taxes when purchasing property in Spain
- Maintenance costs: what needs to be considered?
- Financing: private person vs company
- Key formalities: NIF and NIE
- Most common investor mistakes
- Summary: what to choose?
- Listen to the podcast and make an informed decision
Why does the form of purchasing property in Spain matter?
The form of purchase directly affects:
- taxation method
- property maintenance costs
- rental and reinvestment possibilities
- level of asset protection
- inheritance and succession issues
Therefore, this decision should be made before starting property searches.
Buying property in Spain as a private person
This is the simplest and most commonly chosen purchase form, especially by people buying a second home or holiday apartment.
When is this the best solution?
Buying as a private person works well if:
- you are buying one property
- you plan to use it privately
- rental will be occasional or is not a priority
- you value formal simplicity
Taxes and costs
For non-residents, there is an income tax (IRNR) of 19% on net rental income. Importantly, this is one of the more competitive rates in Europe.
Maintenance costs are also lower compared to corporate structures, as there is no obligation to keep full accounting records.
Purchasing through a company: Polish company or Spanish S.L.?
Contrary to popular belief, property in Spain can be bought both through a Spanish company and a Polish company.
Can a Polish company buy property in Spain?
Yes, a Polish limited liability company (sp. z o.o.) can buy property in Spain without obstacles, but it requires meeting certain conditions:
- obtaining a NIF number
- translating documents (National Court Register, articles of association)
- appointing a representative with an NIE number
- opening a bank account in Spain
This solution is often chosen for smaller investment portfolios.
When is it worth establishing a Spanish S.L. company?
A Spanish S.L. company is a more advanced solution but offers greater possibilities.
It is worth considering if:
- you are building a portfolio of several properties
- you plan active rental
- you want to reinvest profits
- you act more as an investor than a user
The corporate tax (CIT) in Spain is generally 25% (for new companies 15% is possible initially), but it allows more flexible income management.
Family foundation and properties in Spain
A family foundation is a relatively new tool in Poland, which is increasingly appearing in the context of foreign investments.
Can a foundation buy property in Spain?
Yes, but the Spanish legal system treats it as a foreign entity, which means additional formalities.
The most important aspects:
- IRNR taxation at 19%
- the necessity to obtain a NIF
- obligation to present documents (statute, register, certificate of residence)
- need to indicate the ultimate beneficial owner (UBO)
When does this make sense?
A family foundation is well suited primarily for:
- asset protection
- succession planning
- long-term asset management
Taxes when purchasing property in Spain
Regardless of the form of purchase, transaction taxes are the same:
- secondary market: approx. 7% ITP
- primary market: 10% VAT + 1.2% AJD
Differences only appear at the stage of income settlement and property management.
Maintenance costs: what needs to be considered?
When purchasing through a company or foundation, you need to add:
- accounting: approx. 150–300 EUR per month
- requirement to file tax declarations
- additional formal obligations.
For a private person, these costs are significantly lower.
Financing: private person vs company
This is one of the key decision elements; banks in Spain are more willing to finance private individuals and offer up to around 70% of the property value.
For companies, financing usually amounts to 50–60%, financial results and business history are required, and often additional securities are needed.
Key formalities: NIF and NIE
Purchasing property in Spain requires “entering the system.”
- NIE – identification number for individuals
- NIF – tax number for companies and foundations
Without them, you cannot conduct a transaction.
Most common investor mistakes
Based on our experience, the most common mistakes are:
- choosing the purchase form without tax consultation
- underestimating maintenance costs
- lack of document preparation
- starting the process of obtaining NIF/NIE too late.
Summary: what to choose?
There is no single universal answer.
- Private person – simplicity and lower costs
- Company – scaling and investing
- Family foundation – asset protection and succession
The key is matching the structure to the investment objective.
Listen to the podcast and make an informed decision
If you want to better understand the differences between these solutions and learn practical examples, it is worth listening to the “Dream Property Talks” podcast, on which this article is based. It’s material that will help you avoid costly mistakes and approach purchasing property in Spain strategically.
