Why not hold titles in company to avoid the ITP?

Spanish Property Insight Forums Spanish Property Forums Property Questions & Answers Why not hold titles in company to avoid the ITP?

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    • #224059
      entropy
      Participant

      Why don’t investors who sooner or later plan to sell hold titles in a company and sell that company’s shares, in order to avoid the buyer having to pay the ITP? Given the ITP is very material, I don’t understand why don’t investors structure the investment to minimize it. I am sure many do, but I also see many sellers (foreign) hold in personal titles, so making buyers subject to the tax.

      • This topic was modified 2 years, 6 months ago by entropy.
    • #224131
      SurveySpain
      Participant

      The Spanish tax authorities are aware of this avoidance. If a property is held by a Spanish company and that company has no other activity, the authorites will charge tax based on a notional rent that the company should have been charging for the property to give a return to shareholders. They can do the same if there is a car in the garage also registered to the company. One way or another, they will ‘get’ you. Check with a responsible lawyer or accountant who will give advice and not just take your money to do what you ask and not answer the questions you don’t know to ask.

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