Buying a property in Mallorca through a German GmbH might seem, at first glance, like an efficient structure for a business owner or investor who already has a company in Germany. Limited liability, centralized assets, and future succession planning are often among the reasons for considering this option.
However, the fact that a German company is listed as the owner of a property located in Spain has tax consequences in both Spain and Germany that must be analyzed before formalizing the acquisition.
At the notary's office, the transaction is recognized immediately: the attorney arrives with the apostilled Handelsregister extract, a sworn translation, and an agreement from the partners, which the notary carefully reviews.
There is usually a decision behind it made months earlier in Germany, when the buyer, who has owned a GmbH for years, concluded that the house in Mallorca would be better in the name of the company, due to the limitation of liability or because of a succession that is supposedly simpler.
What has often gone unmeasured is the effect in Spain, and indirectly in Germany, of a company owning a family home.
The following applies equally to the Austrian GmbH and the Swiss AG or GmbH; differences in the country of origin are noted where relevant.
Key summary
Buying a property in Mallorca through a German GmbH does not, in itself, offer a tax advantage. The company acquires the property as a non-resident entity and must comply with certain tax and formal obligations in Spain.
The main issues that need to be analyzed before structuring the purchase are:
- Taxation of the acquisition in Mallorca.
- The annual tax treatment of housing.
- Taxation if the company rents the property.
- The private use of the dwelling by the partner or his family.
- The Wealth Tax and the Temporary Solidarity Tax on Large Fortunes.
- The taxation of a future sale of the property or the shares.
- The inheritance consequences.
- The coordination of Spanish taxation with Germany.
For a home primarily intended for family use, a GmbH (limited liability company) is rarely the simplest option. However, it can make sense in certain asset structures or when the property is part of an organized business activity.
At Resitax, based in Palma de Mallorca, we advise German, Austrian, and Swiss buyers on cross-border real estate transactions and asset structures, jointly analyzing the Spanish tax implications and their coordination with the investor's country of residence.
Acquisition of a property in Mallorca by a German GmbH
The company buys as a non-resident entity, and the notary, the bank and the Property Registry require proof of its existence, its representation and its beneficial owner.
In the purchases we advise on, the preparation of the file normally follows these steps:
- The company requests a Spanish NIF as a foreign entity.
- The updated extract of the commercial register and the statutes are provided, with apostille and sworn translation.
- The competent body adopts an agreement that authorizes the purchase and empowers the signatory.
- The notary identifies the actual owner based on the corresponding declaration.
- The company appoints, where appropriate, a tax representative in Spain.
These formal requirements must be prepared in advance. The lack of a company document, an apostille, or a proper translation may prevent the sale from being finalized on the scheduled date.
ITP and taxes on the purchase of housing
In the tax levied on the purchase, the company does not provide any advantage.
The Balearic ITP on second-hand housing is progressive in stages, from 8% up to €400,000 to 13% on the part that exceeds €2,000,000, and its base is the higher of the price recorded in the deed and the reference value of the Cadastre.
There is no access to reduced rates, and new construction is taxed at 10% VAT plus Stamp Duty.
Therefore, buying a home in Mallorca with a German GmbH does not automatically allow for a reduction in the tax corresponding to the acquisition.
Current taxation in Spain of a home owned by a GmbH
The most relevant difference with direct purchase lies in the Non-Resident Income Tax.
The non-resident individual who has a home at his disposal declares each year, through Form 210, an imputed income of 1.1% of the cadastral value, or 2% if this has not been revised in the last ten years.
Article 24.5 of the LIRNR limits this imputation to natural persons, so the owning company does not bear it.
This difference, however, should not be analyzed in isolation. The potential savings from imputed income may be offset by other tax consequences arising from the partners' use of the property.
What happens if the GmbH rents the property?
When the company rents, the income is taxed in Spain.
A German or Austrian GmbH, resident in the European Union, does so at 19% with deduction of expenses directly related to the lease; a Swiss company, at 24% on the total income and without any deductible expenses.
If the rental is organized with own resources and a certain continuity, it must be assessed whether the company has a permanent establishment in Spain, with the consequent subjection to Corporate Income Tax.
For this reason, acquiring a home for family use is not the same as acquiring it to incorporate it into a genuine real estate exploitation activity.
Special 3% tax on real estate owned by non-resident entities
The special 3% tax on the cadastral value of real estate belonging to non-resident entities (arts. 40 to 42 LIRNR) is often invoked against corporate purchases.
However, since Law 16/2012 it only affects entities resident in tax havens, so neither the German or Austrian GmbH nor the Swiss AG are subject to it.
Taxation in Germany of a property located in Mallorca
In Germany, the 2011 Convention for the avoidance of double taxation exempts Spanish real estate income with a progressive reservation.
Its treatment within the GmbH in corporate tax and in the Gewerbesteuer should be reviewed with the advisor in Germany.
The agreements with Austria and Switzerland follow the same method of progressive exemption.
The structure must therefore be analyzed from the perspective of both countries. A favorable tax outcome in Spain does not necessarily imply that the operation will be efficient when the treatment it receives in Germany is taken into account.
Private use of the property in Mallorca by the partner of the GmbH
This is one of the most important points when buying a home in Mallorca with a German GmbH.
Usually, the partner and their family enjoy the property, and in that case, the structure is more expensive.
If the GmbH transfers the house without a market rent, the German administration may consider it a disguised distribution of profits (verdeckte Gewinnausschüttung).
In Spain, the transfer constitutes a related-party transaction, and the Tax Agency can value it at market price and impute to the company the rent that a third party would have paid, even if nothing has been collected.
Agreement for the transfer of use with market rent
We suggest documenting a lease agreement with market rent before the purchase and quantifying its effects in both countries.
It is not advisable to acquire the property through the company first and then analyze how to arrange its private use.
At Resitax, we analyze these types of structures before acquisition, comparing the tax implications of the property belonging directly to the buyer with the consequences of holding it within a GmbH (General Limited Company). Our experience with international asset structures in Mallorca allows us to comprehensively assess the purchase, the property's use, its potential development, and the future exit strategy.
Wealth tax on a property owned by a GmbH
Since 2022, holdings in entities whose assets consist mainly of real estate located in Spain are considered assets located in Spain for the purposes of Wealth Tax.
In the Balearic Islands, the minimum exemption is €3,000,000, and the Temporary Solidarity Tax on Large Fortunes (ITSGF), in force without an end date, also applies to non-residents, with a deduction of the Wealth Tax paid.
This means that placing a GmbH between the owner and the property does not automatically lead to the conclusion that the real estate assets are exempt from Spanish wealth taxation.
The composition of the company's assets, the value of the property, the percentage of participation and the circumstances of the partner must be studied individually.
Sale of a property in Mallorca owned by a GmbH
For the exit, the idea is often to sell the shares in the company instead of directly transferring the property.
The gain derived from holdings in companies with a predominance of real estate is taxed in Spain in accordance with most of the treaties, including the Spanish-German treaty in its art. 13.
In addition, Article 338 of Law 6/2023, on Securities Markets, subjects the acquisition of control of a company whose assets are mainly composed of real estate in Spain to the ITP as if the property itself were being transferred, a cost that the buyer will deduct from the price.
Therefore, a structure that seems efficient at the time of acquisition may present drawbacks when trying to sell.
The exit strategy should be analyzed before buying
The future sale of the property or the company should be part of the initial analysis.
When considering buying a property in Mallorca with a German GmbH, it's not enough to simply calculate the initial taxes. It's also necessary to simulate how a future transfer would occur and what the consequences would be in both Spain and Germany.
Succession of a property in Mallorca acquired through a GmbH
In terms of inheritance, Law 6/2025 established in the Balearic Islands a 100% reduction in Inheritance Tax for spouses, descendants and ascendants, which since July 2025 can also be taken advantage of by non-residents when the Balearic regulations are applicable.
With the intermediary company, however, the heirs receive shares from a foreign entity, while the property remains in the name of this entity.
Whether Spain taxes that transfer, and on what terms, depends on the classification of the asset and the residence of the heirs.
Inheritance of shares in a German GmbH
German Erbschaftsteuer on shares requires a separate study.
Austria has not taxed inheritances since 2008, and in Switzerland the tax is cantonal.
Anyone in Austria considering contributing their home or company to a Privatstiftung should first clarify how Spain will classify that structure.
Therefore, estate planning through a foreign company cannot be considered advantageous simply because the heirs receive shares instead of the property directly.
Is it advisable to buy a property in Mallorca with a German GmbH?
For the home the family will use, the GmbH is rarely the right vehicle.
It avoids imputed income, but generates costs in private use, in Wealth Tax and in exiting.
Practical difficulties are added because Spanish banks finance foreign companies with reserves and, if the property is intended for tourist rental, it is necessary to check in whose name the license (ETV) is registered, whether it was validly granted and whether it complies with Decree-Law 4/2025.
The company makes sense in a rental arrangement organized as a business or within an existing asset structure.
We recommend making a decision based on a comparative calculation between direct purchase and corporate purchase, coordinated with the advisor in the country of origin.
Direct purchase versus purchase through a German GmbH
Before making a decision, it is advisable to compare both alternatives for the same investment.
The analysis should include:
- Taxation of the acquisition.
- Annual property taxation.
- Imputed income.
- Rental taxation.
- Private use of the dwelling.
- Related party transactions.
- Wealth Tax.
- Temporary Solidarity Tax on Large Fortunes.
- Taxation in Germany.
- Financing.
- Future sale.
- Succession.
The most efficient structure will not necessarily be the one with the lowest initial tax cost.
In international real estate investments, it is especially important to analyze the complete investment cycle.
Our experience at Resitax with German buyers in Mallorca
At Resitax we specialize in international taxation and cross-border asset structures in Mallorca.
From our office in Palma, we regularly advise German, Austrian, and Swiss buyers who want to acquire homes and properties in the Balearic Islands, either directly or through foreign companies.
When a client proposes to us to buy a property in Mallorca with a German GmbH, we analyze the operation from a global perspective: acquisition, ownership, private use, rental, wealth taxation, divestment and succession.
Our goal is for the structure to be decided before the purchase based on its real consequences and not solely on the prior existence of a company in Germany.
We work in coordination with the client's advisors in the country of origin when the operation requires joint analysis of Spanish and German, Austrian or Swiss regulations.
We provide service in Spanish, German, English, and French.
Frequently asked questions about buying a property in Mallorca with a German GmbH
Can a German GmbH buy a property in Mallorca?
Yes. A German GmbH can acquire real estate in Spain as a non-resident entity. It will need to obtain a Spanish tax identification number (NIF) and prove to a notary, among other things, its existence, legal representation, and beneficial ownership.
Does buying a property in Mallorca through a German GmbH allow you to pay less ITP (Property Transfer Tax)?
Not simply by using a company. The Balearic Property Transfer Tax (ITP) on second-hand housing is progressive, tiered from 8% up to €400,000 to 13% on the portion exceeding €2,000,000.
Does a German GmbH pay the imputed real estate income under Form 210?
Article 24.5 of the LIRNR limits this imputation to natural persons, so the owning company does not bear the imputed real estate income applicable to a non-resident natural person.
Can the partner use the property owned by their GmbH free of charge?
Free use should be analyzed with particular care. In Germany, it can be seen as a disguised distribution of profits (verdeckte Gewinnausschüttung). In Spain, the transfer constitutes a related-party transaction and can be valued at market price.
Is it advisable to sign a contract between the GmbH and the partner?
We suggest documenting a lease agreement with market rent before the purchase and analyzing its tax implications in both Spain and Germany.
Is a property owned by a GmbH exempt from Spanish Wealth Tax?
Not necessarily. Since 2022, holdings in entities whose assets consist mainly of real estate located in Spain are considered assets located in Spain for the purposes of Wealth Tax.
Is it possible to sell the GmbH shares instead of selling the property?
It is possible to consider this, but it should not be assumed that the transaction will be exempt from Spanish taxation. Gains derived from holdings in companies with a predominantly real estate focus may be taxable in Spain, and Article 338 of Law 6/2023, on Securities Markets, should also be analyzed.
Is it better to buy personally or through a GmbH?
It depends on the specific circumstances. For a home primarily intended for the use of the partner and their family, a GmbH is rarely the appropriate vehicle. It may make different sense when the property is integrated into a genuine rental business or an existing corporate asset structure.
Does Resitax advise German buyers who want to purchase a property in Mallorca?
Yes. From Palma de Mallorca, we advise German, Austrian, and Swiss buyers on the tax structuring of real estate acquisitions, both personal and corporate, and we coordinate the analysis with their advisors in their country of origin when necessary.