Spain property investment

D

Danielle Alex

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Hello
Myself and my husband own an LTD , we build up some cash and we want to buy an property in Spain.
What is the best way to buy it please personal or though the LTD?
If we buy it for personal we have to pay nearly 52% income tax, if we will buy it as LTD is too much hassle latter on , double CGT ?
What's is the best option and why , please?
Thank you
 
Danielle Alex said:
What is the best way to buy it please personal or though the LTD?
Click to expand...
Probably not at all.

Key Post - Why you should never use a limited company to invest in residential property

I am not a tax expert, so corrections welcome. Some of the figures have been deliberately simplified e.g. 50% for personal taxes. This comes up a lot in various formats so I thought I would update the Key Post on the topic. This post is about an Irish individual investor who wants to buy...
www.askaboutmoney.com
 
If you make any profit from property letting in Spain the local council will want 22% to 24% of it Then you can deal with Irish Revenue regarding the crumbs.

Your Best Option:- Rent, don’t buy. See y many previous posts on the subject.
 
I thought that post is applying to Irish property investment , not overseas property:
"This does not cover:
  • Property development
  • A business operating through a company which wants to buy its own premises
  • An existing company which has built up a big cash pile and wants to buy a property
  • Buying a property through a pension fund
  • Buying overseas property"
 
Danielle Alex said:
I thought that post is applying to Irish property investment , not overseas property:
"This does not cover:
  • Property development
  • A business operating through a company which wants to buy its own premises
  • An existing company which has built up a big cash pile and wants to buy a property
  • Buying a property through a pension fund
  • Buying overseas property"
Click to expand...
Yes, but there are still enough relevant issues that night mean that buying foreign property through an Irish limited company isn't a good idea other than in exceptional cases. And there are probably better ways to use and extract cash built up in the limited company. Such issues/questions are covered in key post and other threads about this issue. You should read them to apprise yourself if the issues. You should probably also talk to your accountant and maybe a tax specialist.
 
I think Lepers advice is the best to take on-board and consider renting - especially now.

Spanish property price rises have boomed since covid and have hit, what I believe to be, an unsustainable level. You'll read articles in various news outlets that Spanish property rose by ~8% in the past year but that seems to hide the truth. The less desirable, inland, locations have barely budged but anything desirable near the coast has risen by ~20% in the past year.

Some anecdotal stories I've seen include:
  • Prices in Villamartin having increased by ~80% in the past 4 years;
  • The Malaga province as a whole having increased by ~18% last year;
  • Torremolinos, within Malaga, having increased by ~23% last year;
  • Many parts of Valencia up ~80-90% since 2016;
Add to this the cost of buying property in Spain - with taxes and fees, you need to be budgeting about 13% of the property value.

With current pricing, you're going to have to be charging serious rent - levels that I don't believe are achievable. In decent areas, you're probably going to be looking at a gross yield close to 5%.

Spanish property prices MAY move higher again but, to me, it appears to be showing signs of a bubble. The locals can't afford property in many areas and these areas are reliant on a constant stream of foreign investors. The potential CGT liability would be the least of my worries if buying property in Spain in 2025.
 
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