Introduction
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 and GmbH structures for asset management back home. For most lifestyle purchases and second homes, private ownership is the common route; a company is mainly used where there is active rental income. In both cases the deciding factor is tax, driven by your residency and your intended use of the property.
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.
Quick comparison
Private vs company, at a glance
The table below sets the two structures side by side across the aspects that most affect the total cost and complexity of owning in Ibiza.
| 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 |
| Imputed income tax (not rented out) | 19% (EU/EEA) or 24% (non-EU) on 1.1–2% of cadastral value, annually | Not applicable, company taxed only on actual profit |
| Capital gains on sale | Flat 19% for non-residents (EU/EEA and non-EU alike, not a progressive scale) | 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 filings |
| Mortgage availability | Standard, banks comfortable | More complex, banks less flexible for foreign companies |
| Complexity and cost to set up | Simple | Notary, registration, ongoing accountant fees |
Buying as a private individual
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. Four advantages stand out.
- Lower ongoing costs. No annual accounts, no mandatory accountant, no corporate governance. Your only recurring tax obligation is the annual IRNR filing via Modelo 210, which is straightforward and inexpensive with a local tax adviser.
- Simpler mortgage access. Spanish banks are far more comfortable lending to private individuals than to foreign holding companies. If you need a mortgage, buying privately gives you access to more products at better rates.
- No double taxation risk. A foreign company owning Spanish property can trigger complex tax situations, including withholding taxes on distributions and dividend flows between jurisdictions. Private ownership avoids this entirely.
- Cleaner on sale. Selling a property owned privately is straightforward. Selling shares in a Spanish company that owns a property adds layers of complexity, buyer due diligence and potentially lower demand.
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.
Buying through a company
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.
- Active rental business. If you intend to run a genuine rental business, managing multiple properties, generating significant rental income, employing staff, a Spanish SL can make sense. Corporate tax (IS) is 25%, but all business costs are fully deductible including depreciation, mortgage interest, management fees and salaries.
- Estate planning and succession. For very high-value estates where inheritance tax is a concern, holding property through a company can make succession planning more flexible, particularly for buyers from countries with complex cross-border inheritance rules. However, Spain’s inheritance tax exemptions vary by autonomous community and specialist advice is essential.
- Multiple property portfolio. Investors building a portfolio of properties in Ibiza may benefit from consolidating ownership in a single Spanish SL for operational efficiency, unified accounting and simplified management.
- Wealth tax optimisation. In some cases, holding property through a company and then holding shares in that company can affect the Spanish wealth tax base, particularly for buyers with significant net assets in Spain above the threshold. This is a genuinely complex and contested area of Spanish tax law where the rules have shifted in recent years, so specialist structuring advice is essential rather than optional.
Important, the anti-abuse rules: 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.
The Dutch buyer’s specific situation
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 that it 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.
Cost comparison
What does each structure actually cost?
Beyond the taxes, the two structures differ sharply in what they cost to set up and run year after year.
| Cost item | Private purchase | Spanish SL company |
|---|---|---|
| Set-up costs | NIE and bank account (€50–€200) | Notary, registration and 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 and annual accounts (€1,500–€3,000) |
| Mortgage access | Standard products available | Very limited, most banks require a personal guarantee anyway |
| Sale complexity | Standard, buyer pays ITP | Higher, buyer due diligence on company, potential preference for an asset deal |
| Municipal capital gains tax (plusvalía municipal) | Payable by the seller on sale, applies regardless of structure | Payable by the seller on sale, applies regardless of structure |
Our recommendation
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.