When to set up Special Purpose Vehicle (SPV) company
Many of our clients choose to set up Special Purpose Vehicle (SPV) companies to purchase their properties 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.
We can also arrange mortgages for foreign companies buying properties in Spain, recently we have had a number of approvals for both Spanish and foreign entities purchasing properties throughout Spain. Usually in such cases, the maximum LTV would be 60% and mortgage term is limited to 20 years.
The banks will always apply their own affordability criteria when considering an application through a Special Purpose Vehicle. We therefore base our own analysis of the application on either the financial profiles of the company directors or shareholders (who may also be required to give personal guarantees), or on that of a fully operating parent company, which would also be expected to guarantee the borrowing.
We recommend our clients seek tax advice before buying a property via an SPV. We work with some of Spain’s top tax, wealth and Inheritance Tax Planning (ITP) firms who will be able to advise you on the best way to structure your purchase.
For a free, no-obligation consultation, please contact us or request contact from one of our experienced advisers and we will be delighted to assist you.
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.
Learn more about Special Purpose Vehicle (SPV) companies
We understand that every transaction is unique. See our case study of a client who owned a Maltese limited company through a trust in Guernsey and wanted to release equity on an unencumbered property valued close to €17 million in Barcelona. We were able to secure a mortgage of €9 million. All via a SPV.