Is there any way of structuring my property ownership to avoid paying wealth tax on a portfolio consisting of tree Spanish properties?

robert
London

A. It is customary for property owners with a portfolio of two or more properties to own them through a Spanish Limited company (SL). This in turn is now seen as a disadvantage from a CGT perspective for Corporate tax is currently at 30% (plus a retention on dividends of 15% for non-residents), whereas CGT for non-residents is of 18% straight.

On the contrary non-residents do not pay wealth tax on shares whereas they do on property, and wealth tax can be hefty depending on the equity on the properties you own. If you have large mortgages on these properties and your equity is low, you’d be better off by keeping them in your own name. If on the contrary the value of the properties is high and you have no mortgage I would be inclined to look at the SL option, ALWAYS bearing in mind the profit you could be making on selling these, as by keeping them in your name you have a 18% CGT versus a 45% Corporate tax plus dividend retention.

On the rental front, a non-resident will pay a flat fee of 25% whereas a company will pay 30% but being able to deduct any expenses associated with the rental.

As you can see the best option will depend on a number of factors which have to be carefully weighed one another.