Strategic tax planning for property purchases
for non-residents in Spain
At Aroca Seiquer & Asociados, we understand that purchasing a property in Torrevieja or Orihuela Costa is a long-term investment that involves critical tax decisions. Our Purchase Tax Planning service is designed for non-resident clients, ensuring that your initial investment does not become an unnecessary future tax burden.
We advise you before the signing of the public deed so that the ownership and structure of your property achieve two key objectives: legal security and maximum future tax efficiency.
Why is tax planning crucial before the purchase?
Spanish taxation is complex, and the way in which a property is acquired directly affects three main taxes that you will have to deal with in the future: annual taxation, Wealth Tax, and—most importantly—Inheritance and Gift Tax (ISD).
Engaging in preventive tax planning allows you to:
Avoid future costs: Choose the most appropriate ownership structure (individual, company, etc.) to minimize long-term taxation.
Optimize succession planning: Coordinate the purchase with the applicable succession law for your heirs, avoiding disputes and high taxes at the time of inheritance.
Ensure annual compliance: Understand and simplify your recurring tax obligations as a non-resident property owner in Spain.
Key elements in ownership structure planning
The decision regarding who appears as the owner in the public deed is the most important aspect of the planning process. We assess your personal and asset situation in order to recommend the most efficient structure:
Individual ownership vs. corporate structures
We determine whether it is more advantageous for you to appear as an individual (sole owner or co-owner) or whether a corporate entity (company) is the best option for property management, inheritance planning, or future sale, taking into account taxation in your country of origin.
Impact on Inheritance Tax (ISD)
Property ownership is the determining factor in the Inheritance and Gift Tax that your heirs will be required to pay. We ensure that the regulations of the Valencian Community (where the main value of the asset is located) are applied, so that your beneficiaries can benefit from the maximum possible tax reductions and allowances.
Purchase planning is directly linked to succession planning. Learn more about the advantages of regional tax allowances on our page dedicated to Inheritance and Gift Tax in the Valencian Community
Tax obligations arising from the purchase
Planning also addresses the taxes you must face immediately (Transfer Taxes) as well as those that will arise annually as a non-resident.
Initial transfer taxes
We analyze the purchase transaction to accurately determine the initial tax cost, which may include:
Property Transfer Tax (ITP): Applicable to the purchase of a resale property.
Value Added Tax (VAT): Applicable to the purchase of new-build properties, together with Stamp Duty (AJD).
Annual tax obligations for non-residents
We prepare you for the management of Non-Resident Income Tax (IRNR), which is mandatory if you own property in Spain:
Imputed income (Form 210): Understanding your obligation to declare an annual imputed income for periods when the property is not rented out.
Fiscal representation: We advise you on the legal requirement to appoint a fiscal representative in Spain for communications with the Spanish Tax Agency.
For ongoing management of your taxes and the filing of your annual returns, please consult our Fiscal Representation and Form 210 services.
Integration of tax planning with the conveyancing process
Our tax planning begins in parallel with the legal review of the property.
We work closely with our Conveyancing service to ensure that the tax structure we recommend is correctly implemented in the purchase agreements and the Public Deed. This comprehensive coordination prevents costly mistakes that may be irreversible after completion.
Plan your purchase with security and tax efficiency from day one.
