Purchase of real estate companies from now on with transfer tax.

Was previously a property for more than 3 years in the possession of a S.L. (Sociedad de Responsabilidad Limitada), namely a company with limited liability according to the English Ltd., so was the purchase or sale of the property exempted from the transfer tax, provided that on the buying side none of the shareholders kept more than 50% holdings of the company.    

 

The transfer of ownership of the property took place in the form, that the purchaser or purchasers did not buy theproperty, but by a so-called share deal acquired 100% shares of the owning company.

Although this method has not been applied at any time by the broad masses of property buyers, business experienced buyers or those with appropriate legal assistance could so far save a lot of money in this manner.

Thus this is now past.

By law n° 7/2012 from the 29.10.2012 the exemption from the transfer tax when buying shares of a real estate-S.L. has been abolished with immediate effect.

Exceptions are made when it does not concern a purely real estate company, but a business such as for example hotels. Here the share deal is exempt from the transfer tax even if the majority of corporate assets consists of real estate.

Posted in: Purchasing a Majorca real estate