Buying a property in Mallorca with an LLC raises a prior legal and tax decision: determining whether the property should be acquired directly by the limited liability company or personally by its partner.
When a Delaware LLC whose partner resides in Munich, Vienna or Zurich appears as the buyer at a notary's office in Palma, the transaction requires substantially more preparation than an ordinary real estate sale.
This situation is becoming increasingly common among German-speaking entrepreneurs, consultants, and investors who formed an LLC to develop a digital or investment activity and subsequently plan to acquire a home in Mallorca.
The choice of buyer affects not only the deed of acquisition. It also impacts the annual property tax, wealth tax, future transfers, and estate planning.
When the partner resides in Germany, Austria, or Switzerland, the analysis incorporates an additional difficulty: the same LLC may be subject to a different classification in the United States, Spain, and the partner's state of residence.
At Resitax, we are experts in international taxation, real estate law, and estate planning, and we are based in Palma de Mallorca. We analyze these types of transactions before acquisition, coordinating the Spanish tax treatment of the property with the LLC structure and, where applicable, with the advisor in the partner's country of residence.
Legal and tax summary
A US LLC can acquire and register real estate in its name in Spain. However, this does not mean that acquiring property through a company is necessarily more tax- or legally efficient than purchasing it directly. An LLC requires specific corporate documentation, a Spanish tax identification number (NIF), and proof of beneficial ownership. It may also face greater financing difficulties, and its tax treatment depends on its classification in Spain and in the countries of residence of its members. For a home intended for personal or vacation use, direct acquisition is usually simpler; using a company requires individualized analysis when it is part of a genuine economic activity or broader international planning.
Acquisition of a property in Mallorca in the name of an LLC
Nothing prevents a US LLC from acquiring a property located in Spain and registering it in its name in the Property Registry.
The legal capacity to acquire does not, however, eliminate the documentary and identification requirements associated with the intervention of a foreign entity.
Spanish NIF of the LLC
The LLC needs, first of all, to obtain a Spanish NIF for foreign entities.
This element is necessary for the formalization of the acquisition and for the subsequent fulfillment of the corresponding tax obligations in Spain.
US corporate documentation
The notary must have sufficient documentation to verify the existence of the company, its structure, and the powers of representation of the person involved in the sale.
The relevant documentation includes the Articles of Organization and the Operating Agreement, duly apostilled and accompanied by a sworn translation.
A recent Certificate of Good Standing must also be provided to prove that the company exists and is up to date with its obligations.
Finally, the agreement of the partners or the corresponding power of attorney will be necessary, which will show the powers of the person appearing to acquire the property on behalf of the LLC.
Identification of the beneficial owner
The deed must also include the corresponding statement regarding the actual ownership of the company.
The use of a US LLC as an acquisition vehicle does not eliminate Spanish obligations to identify the natural persons behind the structure.
Banking control and money laundering prevention
Financial institutions subject transactions carried out by foreign companies to enhanced procedures for identifying and preventing money laundering.
The corporate structure, the origin of the funds, the activity of the LLC and the identity of its beneficial owner may be part of the bank analysis prior to the transaction.
Mortgage financing of a US LLC
One of the main practical differences appears in the financing.
In our experience, obtaining a mortgage for a US LLC is very difficult.
Therefore, the structure chosen to acquire the property must also be analyzed from a financing perspective before assuming contractual commitments.
Taxation of buying a property in Mallorca with an LLC
Using a U.S. company does not, in itself, reduce the taxation on the acquisition.
Property Transfer Tax
The Property Transfer Tax (ITP) is the same as in an acquisition made directly by a natural person.
In the Balearic Islands, a progressive scale of 8% to 13% is applied to the higher of the following amounts: the price recorded in the deed or the reference value of the Cadastre.
Therefore, the use of an LLC does not in itself reduce the cost of purchasing the property.
The tax classification of the LLC in three legal systems
One of the main elements of complexity for a US LLC that owns a property in Mallorca is its tax classification.
There is not necessarily a single answer that is valid for all the States involved.
LLC rating in the United States
In the United States, a sole shareholder LLC is normally considered a disregarded.
When there are multiple partners, the LLC is generally taxed as a partnership.
LLC rating in Spain
The Directorate General of Taxes has classified US LLCs in various binding consultations as entities under the income attribution regime, that is, as transparent entities.
This means that an LLC can also receive transparent treatment in Spain.
The conclusion, however, depends on its specific configuration.
The Operating Agreement must be reviewed individually, as its characteristics are relevant to determining the legal and tax nature of the entity.
LLC rating in Germany
When the partner resides in Germany, a third level of analysis appears.
German law applies the so-called comparison of types (Typenvergleich) and, depending on the content of the Operating Agreement, may treat the LLC as a capital company or as a partnership.
Austria and Switzerland also carry out their own rating of these structures.
International rating disputes
The difficulty arises when the States involved attribute a different nature to the same entity.
If the United States and, eventually, Spain consider the LLC transparent while Germany treats it as an opaque company, a classification conflict.
The same income may be attributed to the company in one State and to the partner in another.
The result can lead to situations of double taxation or the existence of taxes that cannot be properly deducted later.
This classification also determines whether real estate income is exempt in Germany on a progressive basis according to the Spanish-German Convention or whether the distributions are taxed there as dividends.
These matters must be confirmed by the advisor of the State of residence.
At Resitax, we analyze the Spanish aspect of these international structures from Mallorca and coordinate it with advisors in Germany, Austria, or Switzerland before formalizing the acquisition, preventing the US structure, Spanish taxation, and treatment in the country of residence from being studied in isolation.
Annual taxation of the property acquired through an LLC
The annual regime again depends on the tax classification of the entity.
Imputation of income from own-use property
In the Non-Resident Income Tax, the imputation of income derived from a property intended for own use or kept empty —1.1% of the cadastral value— only applies to natural persons, in accordance with art. 24.5 LIRNR.
Therefore, the treatment changes depending on whether the owner is directly a natural person or an entity.
LLC treated as an opaque entity
If the Administration considers the LLC an opaque entity, the rental income is taxed at 24% on the full amount, without the possibility of deducting expenses.
LLC treated as transparent
When the LLC receives transparent treatment, the income is attributed to the partners and taxation depends on their residency.
The partner resident in Germany or Austria applies the 19% provided for residents of the European Union and can deduct directly related expenses.
The partner resident in Switzerland, outside the European Economic Area, remains subject to 24% on the full amount.
Special 3% tax on real estate owned by non-resident entities
One issue that frequently arises in the analysis of these operations is the special 3% tax on real estate owned by non-resident entities, regulated in Articles 40 to 42 of the LIRNR.
Since Law 16/2012, this tax only affects entities resident in tax havens.
The United States is not on the Spanish list.
Therefore, a US LLC is not subject to this tax simply by virtue of owning a property located in Spain.
US LLC and Wealth Tax
The use of a company does not in itself constitute a mechanism to exclude the property from Wealth Tax.
Shares in companies with real estate located in Spain
Since 2022, shares in entities whose assets consist mainly of real estate located in Spain are considered assets located in Spain when their owner is a non-resident.
Therefore, the incorporation of an LLC does not necessarily prevent the economic value of the property from being subject to Spanish wealth taxation.
Minimum exemption in the Balearic Islands
The Balearic Islands apply a minimum exemption from 3.000.000 €.
Temporary Solidarity Tax on Large Fortunes
Above that comes the Temporary Solidarity Tax on Large Fortunes (ITSGF), which taxes taxable bases exceeding €3,000,000 after the state minimum of €700,000 and allows deductions for payments made under the Wealth Tax.
The use of an LLC should therefore also be analyzed from the partner's asset perspective.
Sale of a property in Mallorca owned by an LLC
The structure chosen in the acquisition also conditions a future exit from the investment.
3% retention in the transmission
When the LLC sells the property, the buyer must withhold 3% of the price, in accordance with art. 25.2 LIRNR.
Taxation of profits
The capital gain derived from the transfer is taxed to 19 %.
The operation also generates the corresponding municipal capital gains tax.
Sale of LLC shares
Transferring the LLC shares instead of the property does not necessarily avoid Spanish taxation.
Article 338 of Law 6/2023, on Securities Markets, allows the taking of control of a company whose assets are mainly real estate in Spain to be taxed with ITP as if the property were being transferred directly.
Furthermore, most double taxation treaties, including Article 13 of the Convention with Germany, reserve for Spain the right to tax the gain obtained from the sale of these shares.
There is also a practical issue: few buyers are willing to acquire a foreign company and assume its entire legal, corporate, and tax history.
Property inheritance in Mallorca: direct ownership or LLC
The acquisition structure also produces succession consequences.
Property acquired directly by the individual
When the property is owned directly, the heirs receive an asset located in Spain.
Law 6/2025 extends to non-residents, when applicable to Balearic regulations, the 100% bonus in Inheritance Tax for spouse, descendants and ascendants.
Inheritance of LLC shares
When the property belongs to the LLC, the object of the succession is the shares of the entity.
Its treatment in Spain again depends on the company's rating, while the transfer of shares is also linked to US law.
Germany, Austria and Switzerland
The country of residence of the deceased or the heir adds another level of analysis.
In Germany, the Erbschaftsteuer is unlimited when the deceased or the heir resides there.
Austria has not taxed inheritances since 2008.
In Switzerland, the tax is cantonal and depends on the canton of residence.
Real estate acquisition and estate planning should therefore be studied together when there is an international structure.
Purchase by person or through an LLC: decision criteria
There is no universally suitable structure for any real estate acquisition in Mallorca.
The choice depends on the actual use the property will have and the tax and asset context of each investor.
Holiday home or own residence
For a home intended for holiday use or as a personal residence, personal acquisition is generally the simplest alternative.
Using an LLC increases documentary and administrative requirements and can generate classification conflicts between jurisdictions without there necessarily being a Spanish tax advantage that compensates for this complexity.
Property intended for an economic activity
A corporate structure may be more justified when there is a real rental business with its own resources.
Even in that case, the specific regulations applicable to the property and the activity must be analyzed.
Holiday rental in the Balearic Islands
Decree -Law 4/2025 prevents the granting of new tourist rental licenses in homes located in multi-family buildings.
Single-family homes are subject to the corresponding capacity limit.
When a prior tourist license —ETV— exists, its legal status requires a specific review before assessing the operation.
Decide on the structure before the earnest money contract
The choice between personal acquisition and acquisition through an LLC should not be left until the time of granting the public deed.
The purchase structure affects taxation, financing, corporate documentation, succession and future sale.
For this reason, it is especially important to determine the identity of the buyer before signing the earnest money contract.
When the partner resides in Germany, Austria or Switzerland, the decision must also be coordinated with the tax advisor of the State of residence to avoid an apparently efficient structure in Spain generating unfavorable treatment in the other jurisdiction.
Frequently asked questions about buying a property in Mallorca through an LLC
Can a US LLC buy a property in Mallorca?
Yes. A US LLC can acquire a property located in Spain and register it in its name in the Property Registry.
It will be necessary to have, among other things, a Spanish NIF (Tax Identification Number), duly apostilled and translated corporate documentation, accreditation of the powers of representation and documentation relating to the beneficial owner.
Does buying through an LLC reduce the ITP in the Balearic Islands?
No.
The ITP applicable to the acquisition is the same as in a personal purchase: a progressive scale from 8% to 13% on the higher of the price recorded in the deed and the reference value of the Cadastre.
Is it easier to get a mortgage by buying yourself?
Financing a US LLC presents additional difficulties.
In our experience, obtaining mortgage financing for an LLC is very difficult, a circumstance that must be assessed before defining the acquisition structure.
How is a US LLC taxed in Spain?
It depends on your rating.
The specific configuration of the company and, especially, its Operating Agreement must be analyzed to determine whether it receives transparent or different treatment for Spanish tax purposes.
Does an LLC avoid wealth tax?
Not necessarily.
Since 2022, shares in entities whose assets consist mainly of real estate located in Spain can be considered assets located in Spain when their owner is a non-resident.
Does the LLC pay the 3% special property tax?
Not simply because it is a US LLC.
According to Articles 40 to 42 of the LIRNR and the amendment introduced by Law 16/2012, the tax affects entities resident in tax havens, and the United States is not on the Spanish list.
Does selling LLC shares avoid paying taxes on the sale of the property?
Not necessarily.
Article 338 of Law 6/2023, on Securities Markets and agreements to avoid double taxation, may maintain Spanish taxation when the value of the company comes mainly from real estate located in Spain.
Which structure is simplest for a privately owned home in Mallorca?
From the perspective analyzed in this article, personal acquisition usually presents a simpler structure for a holiday home or one's own residence.
The final suitability must be assessed taking into account the buyer's residence, their assets, the purpose of the property, and the tax and inheritance consequences in the jurisdictions involved.
Resitax's reputation as LLC experts in Spain
The legal possibility of buying a property in Mallorca through a US LLC does not necessarily imply that this structure is more efficient.
The acquisition of a company adds documentary obligations, financing difficulties and, especially, an international rating problem that can be relevant when the partner resides in Germany, Austria or Switzerland.
For a property primarily intended for personal or vacation use, direct purchase typically offers a simpler legal and tax structure. Using an LLC requires additional justification when there is genuine economic activity, an international asset structure, or specific circumstances that make it advisable to keep ownership within the company.
Resitax, experts in international taxation and real estate law in Mallorca
We advise international businesspeople, investors and individuals on real estate acquisitions in Mallorca, including transactions involving US LLCs, foreign companies, changes of tax residence and international asset structures.
Our analysis is not limited to the moment of the sale. We jointly review the acquisition structure, annual taxation, wealth tax, a potential transfer, and inheritance consequences.
When residents of Germany, Austria or Switzerland are involved, we coordinate the Spanish side of the operation with the advisor in the State of residence to identify potential conflicts of qualification before the structure is consolidated.
For this reason, the appropriate time to analyze whether the property should be acquired by the individual or the LLC is before committing to the transaction through an earnest money contract.
Resitax — International taxation, real estate law and estate planning in Palma de Mallorca.
This article is for general information purposes only and does not constitute legal or tax advice for a specific case.