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The Spanish Lawyer Online

Can I transfer a property from myself to a company owned by me?

Property Law

Antonio Flores Vila

14th of October 2004

Q. We are group of individuals who came together to fomr a club and bought two properties in the names of two members and this is affecting their personal records and which to transfer the property back to the club since we are thinking of incorporating the club to a limited liability company.

We would be grateful if you can advise us on how to go about it.

    A. You are able to form a company (Spanish Limited Liability Company) and transfer the properties to it by means of a capitalisation of it, against fully paid shares. The cost of this scheme would include legal fees for the incorporation of a Spanish limited company (1.500 Euros + VAT), 1% Stamp duty on the value attributed to the property when capitalising the company with the property and approximately 700 Euros for Notary and Land Registry fees.

    In addition to the aims you wish to attain you can also avail of other interesting situations, for example, inheritance tax.

    In this regard, if the property is owned by a Spanish limited company, due to certain exemptions on Transfer tax on shares (7%), it could be possible to establish a calendar to organize the transfer of shares from the current owners to the named inheritors, in a given period of time, at almost no cost. Alternatively, you could also split ownership of the shares and allocate the inheritors the bare ownership of the shares, you retaining a life interest on them.

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