Buying in Ibiza: Private Person or Company
Buying in Ibiza: Private
Person or Company — Which is Better?
One of the most common questions we receive from international buyers. The honest answer: it depends on your situation. This guide explains the key differences, tax implications and when each structure makes sense.
There is no universal right answer
Whether to buy property in Ibiza as a private individual or through a company structure is one of the most frequently asked questions we receive — particularly from Dutch, Belgian and German buyers who are accustomed to using holding companies or BV/GmbH structures for asset management back home.
The answer is genuinely case-specific. It depends on your tax residency, whether you intend to rent the property, your estate planning goals, the property’s value, and the legal entity you already have or plan to create. What works well for one buyer can be the wrong structure for another.
“The decision between private and corporate ownership is one of the most consequential you will make — and one that is difficult to reverse. Get professional tax advice before you sign anything, not after.”
Private vs. company — at a glance
| Aspect | Private purchase | Company purchase (SL/BV/GmbH) |
|---|---|---|
| Purchase tax (ITP) | 8–13% — paid by buyer | Same ITP — no saving on purchase |
| Annual wealth tax | Payable on net property value | Shares in company — potentially lower base |
| IRNR (non-resident income tax) | 19% EU / 24% non-EU on rental income | Spanish corporate tax (IS) 25% — but deductions available |
| Capital gains on sale | 19–28% for non-residents | 25% corporate tax — but costs fully deductible |
| Rental income tax | 19% net (EU) or 24% gross (non-EU) | 25% IS — full expense deduction |
| Succession / inheritance | Spanish inheritance tax applies | Shares transferred — potentially more flexible |
| Annual administration costs | Minimal — IRNR filing only |
Accountant, annual accounts, tax filingsMortgage availabilityStandard — banks comfortableMore complex — banks less flexible for foreign companiesComplexity and cost to set upSimpleNotary, registration, ongoing accountant fees
When private purchase makes the most sense
For the majority of international buyers purchasing a property in Ibiza as a second home or lifestyle purchase — with no intention of actively renting it out — buying as a private individual is the simpler, cleaner and often more cost-effective structure.
“For a lifestyle purchase — a villa for personal use, a second home, a property you visit regularly — private ownership is almost always the right structure. The tax savings from a company rarely outweigh the cost and complexity.”
When a company structure can make sense
There are specific situations where purchasing through a company — typically a Spanish Sociedad Limitada (SL) or an existing foreign holding company — offers genuine advantages. These situations are the exception rather than the rule.
Spain has strict anti-avoidance legislation targeting companies that hold property primarily for personal use by shareholders. If a company owns a property but it is used mainly by the owner personally, the Spanish tax authority may reclassify the benefit as a taxable personal income item and impose additional taxes. The company structure only works fiscally if the property genuinely functions as a business asset.
What Dutch buyers need to know
Dutch buyers frequently ask whether they can use their existing Dutch BV to purchase a property in Ibiza. The short answer is: technically possible, but rarely advisable.
A Dutch BV owning Spanish property is subject to Spanish taxation on the property — the property’s income and gains are taxed in Spain regardless of the owning entity’s country of incorporation. The Dutch BV does not provide a tax shelter from Spanish property taxes. On top of this, the BV’s Spanish activities may trigger a Spanish permanent establishment, creating additional compliance obligations.
The more common Dutch structure that makes sense is a specifically incorporated Spanish SL — created solely to hold and manage Spanish real estate. This is cleaner, better understood by Spanish banks and tax authorities, and avoids the cross-border complexity of a Dutch BV owning foreign property.
“If you have a Dutch BV, do not simply use it to purchase a Spanish property without specialist advice from an adviser who understands both Dutch and Spanish tax law. The interaction between the two systems is complex and the consequences of getting it wrong are significant.”
What does each structure actually cost?
| Cost item | Private purchase | Spanish SL company |
|---|---|---|
| Set-up costs | NIE + bank account (€50–€200) | Notary + registration + minimum share capital (€3,000–€5,000) |
| Annual accountant | Not required | €1,500–€4,000/year |
| Annual tax filings | Modelo 210 (€200–€400 with adviser) | Corporate tax + VAT + payroll + annual accounts (€1,500–€3,000) |
| Mortgage access | Standard products available | Very limited — most banks require personal guarantee anyway |
| Sale complexity | Standard — buyer pays ITP | Higher — buyer due diligence on company, potential preference for asset deal |
What we see in practice
In our experience, the vast majority of international buyers purchasing a property in Ibiza — whether for personal use, occasional rental, or as a second home investment — are best served by buying as a private individual. The company structure adds cost, complexity and compliance burden that in most cases does not translate into meaningful tax savings.
The exceptions are genuine: an investor building a rental portfolio, a buyer with a very large estate and specific succession planning needs, or a buyer who already has an appropriate Spanish corporate structure in place. In these cases, the additional work is justified.
Whatever structure you choose, the decision should be made before you make an offer — not after you have signed a purchase contract. Restructuring ownership after completion is possible but expensive and involves additional tax exposure.
Not sure which structure
is right for your situation?
We work with trusted tax advisers and lawyers in Ibiza who specialise in advising international buyers on purchase structures. We can connect you with the right professional before you commit to anything.