Should you buy as an individual or through a company?

Purchasing property in Marbella, a sought-after destination on Spain’s Costa del Sol, requires careful consideration of whether to buy as an individual or through a company. Each option carries specific legal, tax, and financial implications that can impact long-term benefits.

Buying as an individual is straightforward and often preferred for personal use properties. Spanish tax authorities offer allowances for primary residences, and individuals may benefit from lower capital gains tax rates upon resale. Moreover, if the property is intended for holiday or second-home purposes, personal ownership avoids the administrative burden and annual corporate obligations tied to company ownership. It also simplifies mortgage processes and access to local utilities and services.

On the other hand, purchasing through a company may be advantageous for high-value properties, rental investments, or estate planning. A corporate structure can offer tax efficiencies, especially if the property generates rental income, allowing for the deduction of expenses and potential VAT recovery. Additionally, owning through a company may provide asset protection and facilitate succession planning, particularly for non-resident buyers concerned with inheritance tax.

However, corporate ownership comes with additional responsibilities, including accounting, annual filings, and ongoing costs. Spanish authorities also scrutinize corporate purchases to prevent tax avoidance, which can lead to higher taxation if not properly managed.

In conclusion, if the property in Marbella is primarily for personal use, buying as an individual is usually more practical. For investment purposes or complex ownership scenarios, a company structure might offer long-term advantages. Professional legal and tax advice is essential to making the right choice.