{"id":9559,"date":"2020-10-18T11:03:59","date_gmt":"2020-10-18T09:03:59","guid":{"rendered":"https:\/\/www.white-baos.com\/?p=9559"},"modified":"2020-10-18T11:04:03","modified_gmt":"2020-10-18T09:04:03","slug":"transferring-a-property-in-spain-to-a-limited-company-sl","status":"publish","type":"post","link":"https:\/\/www.white-baos.com\/en\/transferring-a-property-in-spain-to-a-limited-company-sl\/","title":{"rendered":"Transferring a property in Spain to a Limited Company (SL)"},"content":{"rendered":"\n
Question: Sir, I am British, and for tax reasons I would like to transfer a property I own in Alicante to a Limited Company (SL). Could you please indicate what is the best way to do so, transfer the property into the company as capital base, or by selling it?.<\/em><\/p>\n\n\n\n Dear reader, thank you for your enquiry.<\/p>\n\n\n\n These are two completely different types of transactions. Therefore, to answer properly, we should know the circumstances of your case and know what is your ultimate goal.<\/p>\n\n\n\n If you want to know which of these two options is the most economical, then you should know that:<\/p>\n\n\n\n . – The first option, i.e., the contribution or transfer of a property into a company<\/strong>, means that you transfer your property into the company in exchange for equivalent value in shares. This operation is taxed by the Corporate Transactions Tax. Normally this is 1%, but depending on where you have to pay taxes, it can vary, being set by each region<\/p>\n\n\n\n Thus, it is not a property sale to a company, but it is a contribution as its capital base, for this reason it is not taxed as a transfer. This is the cheapest option.<\/p>\n\n\n\n .-The second option, the sale,<\/strong> is a completely different transaction. You sell your property to a limited company (SL), who purchase it, without other consequence or involvement, i.e.: there is no change in the company capital base. You do not become a shareholder of the company, etc. Of course, the company will need to pay you the property price, and the payment must be duly accredited in accordance with money laundering regulations.<\/p>\n\n\n\n Sometimes, real estate properties are incorporated into companies with the aim of later on transferring the shares to try to avoid transfer tax on property sales, which in the Valencian Community currently amounts to 10%.<\/p>\n\n\n\n Under Article 108 of the Spanish Securities Market Law (Ley de Mercado de Valores), the transfer of company shares do not incur Transfer Tax or VAT. However, these taxes must be paid if the shares\u2019 sale actually intended to convey property without paying taxes. That article outlines some of the cases where it would be understood that the intention is to avoid the property transfer tax: i.e.: when the buyer of the shares gains control of a company whose assets are formed in at least 50 % by properties in Spain which are not subject to a commercial, company or professional activity , etc.<\/p>\n\n\n\n If you want to buy a property through a company , or transfer a house to a company, our firm can help you, informing about the most effective way to do so, and advise on your best course of action, depending on your circumstances , current legislation , etc .<\/p>\n\n\n\n You can follow the Spanish Legal Issues that affect you and consult us by following us on facebook: https:\/\/www.facebook.com\/WhiteBaosAbogadosLawyers<\/p>\n\n\n\n The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.<\/p>\n\n\n\n Carlos Baos (Lawyer)<\/p>\n\n\n\n White & Baos<\/p>\n\n\n\n Tel:+34 966 426 185<\/p>\n\n\n\n E-mail: info@white-baos.com<\/p>\n\n\n\n White & Baos 2014 \u2013 All rights reserved.<\/p>\n","protected":false},"excerpt":{"rendered":" Transferring a property in Spain to a Limited Company (SL) […]<\/p>\n