Setting up a Special Purpose Vehicle (SPV) can be an advantageous strategy for buying property in Spain. An SPV is a distinct legal entity, typically a Spanish limited company, designed to maximize tax efficiency for specific business purposes. You can utilize SPVs for purchasing property, and they can either cease trading post-purchase or continue to rent out the property.
Mortgage Options for SPVs
We help both Spanish and foreign entities secure mortgages through SPVs. Recently, foreign companies have successfully obtained mortgages for properties across Spain. Generally, the maximum loan-to-value (LTV) ratio is 60%, and the mortgage term is capped at 20 years. Banks assess the financial stability of the SPV. They typically evaluate the profiles of company directors or shareholders, or they may require a guarantee from a parent company.
Tax and Legal Considerations
Before proceeding with an SPV for property purchase, obtaining tax advice is crucial. We collaborate with top tax and wealth planning experts in Spain to ensure you structure your purchase effectively. This step helps you manage tax liabilities and maximize financial benefits.
Case Study: SPV in Action
For instance, we assisted a client with a Maltese company held through a Guernsey trust. They sought to release equity from an unencumbered property in Barcelona valued at €17 million. We managed to secure a €9 million mortgage, showcasing our expertise in handling complex transactions.
Get Expert Help
To explore how an Special Purpose Vehicle in Spain can benefit you or to get a free consultation, contact us or request a meeting with one of our experienced advisers. We are here to guide you through purchasing property in Spain.
An SPV is a legal entity – usually a Spanish limited company – that is set up for a specific business purpose in order to maximise tax efficiency. SPVs can be used for property purchase in Spain and can either cease to trade post-purchase or can be used for subsequent rental of the purchased property.