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Should I incorporate a company to purchase property?

Property Law

Antonio Flores Vila

16th of January 2000

Q. My lawyer says it would be a good idea to incorporate a company in order to purchase property. The initial costs are much higher. Can you tell me whether the corporate infrastructure is at all a good option?

F. JJ.
Copenhagen

    A. It certainly may be a good option depending on your personal circumstances and needs. Some investors want total anonymity with regards to any investment in Spain, and for total legitimate reasons. For example, market strategy may impose the need to conceal the identity of the investor. If anonymity is not an issue, then if your aim is to avoid Spanish death duties, a company based offshore addresses this issue.

    Other than that, incorporating a company can save you taxes depending on the price of the property. Some lawyers say 300.000 is the threshold, after which it is worth the while. Others say only a purchase price of over 420.000 will enable you to save taxes. Two values have to be taken into consideration: the ratable value of the property and the declared value on the deeds. Depending on these figures, a company is deemed as a good option.



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