May 23, 2016 at 10:52 am #190967
Apologies if this has been asked before, but I’m looking for any advice on the best structure for managing a property in Ibiza, from a rental perspective.
The idea is that we will set up a management company that will deal with the financial side of holiday lets in the property, along with the ongoing maintenance etc.
As a UK citizen, my preferred solution would be to use a UK company. However, I’m concerned that there may be legal reasons why this can’t be done or tax issues that would make it very expensive, i.e. if there are Spanish taxes on foreign companies doing something like this is Spain?
It’s a complicated subject and I am keen not to make a mistake that could cost us dearly in the long-run, so any advice or suggestions of who to speak to about how to handle it would be very gratefully received!
May 24, 2016 at 4:02 pm #190981
A good place to start is this article by Raymundo Larraín: Buying and Owning Spanish Property through Companies: Pros and Cons.
Have a read of that and come back here if you have any further questions. Someone might have answers.
May 24, 2016 at 4:09 pm #190982
Many thanks for pointing me towards the article, I will read it carefully this evening!
May 25, 2016 at 1:07 pm #190987
Thanks again for linking me to the article, it was very useful. However, it is focused on the ownership of Spanish property via a corporate structure, whereas we are intending to own the property as individuals.
The only purpose of setting up a company for the property is just for the management of lettings, so I am really just trying to get an understanding of whether the Spanish system allows for us to do this with a UK company?
If it’s relatively simple for a UK Ltd Company to operate in this way in Ibiza, it seems preferable to setting up a Spanish company, but I’m concerned that they might have a range of obstacles or additional taxes that would make it difficult or expensive?
Any further input would be greatly appreciate!
May 25, 2016 at 6:18 pm #190988
My experience in Real Estate in Spain is that you could perfectly have your management company in the UK as I assume your main clients will be from there.
New rental laws are up in Spain and rental properties should be registered as so, which is free of charge, the townhall in IBIZA can help you out.
As private owners of the property and not residents the Spanish assume you are renting it out and you pay a special tax annually anyway.
As having the property registered for ocassionally rent out purposes you can deduct costs involved on your annual tax declaration, as there is no control of the amounts received I would not think it will be any problem for you to make it worthwhile.
If you would assign a person to look after the property in between guests, cleaning, pool, keys etc it would be handy to have an invoice for their services.
May 25, 2016 at 8:17 pm #190989
Thanks so much for your comments, that’s really helpful and, from what you say, it sounds like we could structure things the way I was hoping.
Thanks again for taking the time to respond.
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