Tips for High-Net-Worth Individuals investing in property in Spain 

In our last article, we explored some of the initial and practical considerations that High-Net-Worth Individuals (HNWI) should bear in mind when acquiring property in Spain. Now, we turn our attention to several more strategic and often overlooked issues which, particularly in the luxury market, can have a significant legal, tax and financial impact. 

Once you find a property you want to purchase, you should focus on structuring the acquisition correctly and understanding the long-term obligations that come with owning property in Spain. This is where careful planning becomes essential. 

One of the first aspects that buyers often underestimate is the true cost of acquisition. In Spain, the purchase price is only part of the overall investment. Depending on the region and whether the property is a new build or a resale, buyers should expect to budget an additional 10% – 14% of the purchase price to cover taxes and professional fees. These will typically include transfer tax or VAT, Notary fees, Land Registry fees and legal costs. Having a clear understanding of these figures from the outset allows for more accurate financial planning and avoid surprises shortly before completion. 

Equally important for HNWI buyers is deciding how the property should be owned. The way in which a high-value property is held can have far-reaching consequences, not only at the time of purchase but also in the event of a future sale or on death. Depending on personal circumstances, ownership may be structured in an individual’s sole name, jointly with a spouse or family member, or in some cases through a Spanish or foreign company. Each option carries different implications for inheritance and succession; capital gains tax, ongoing taxation and asset protection. It is essential that legal and tax advice is coordinated across jurisdictions.  

Another area that deserves particular attention is succession planning. A common misconception among foreign buyers is that their existing Will automatically and seamlessly covers their Spanish property. While this may be technically possible, it often leads to delays, additional administrative burdens, and increased costs for beneficiaries. Putting in place a separate Spanish Will, limited exclusively to Spanish assets, can significantly simplify matters. It usually speeds up probate procedures, reduces costs, and, most importantly, provides clarity and certainty to heirs. This becomes especially relevant for HNWI clients with complex estates. 

Beyond the initial purchase, buyers should also be fully aware of the ongoing costs and taxes associated with owning property in Spain. These obligations apply even if the property is not rented out. They may include local property tax (IBI or SUMA), Non-Resident Income Tax, Wealth Tax, Community of Owners fees, as well as general maintenance and security costs. Understanding these recurring liabilities is essential when assessing the long-term financial commitment involved in owning Spanish property. 

For those intending to rent out their property, rental and usage restrictions must be carefully assessed before completion. Many luxury property buyers assume that short-term or seasonal rentals are straightforward, but this is not always the case. In most regions, a tourist rental license is required; some communities of owners expressly prohibit short-term rentals, and penalties for non-compliance can be substantial. Confirming that the intended use of the property is legally permitted should form part of the due diligence process. 

Finally, for HNWI purchasing with funds held in Sterling pounds, currency exchange planning is an often overlooked but potentially significant factor. Exchange rate movements can have a material impact on the final cost of a high-value transaction. Using specialist currency exchange providers rather than traditional banks can help reduce exchange rate risk, locked in favourable rates and, in some cases, save tens of thousands of euros. This is a point that should ideally be addressed at a very early stage of the buying process. 

Purchasing luxury property in Spain can be a rewarding and secure investment when handled correctly. However, the higher the value of the asset, the greater the importance of proper planning, specialist advice, and careful execution. It’s important to remember that each buyer’s circumstances, residency intentions, and long-term objectives are different, and tailored legal and tax advice remains essential. 

If you would like guidance on navigating Spanish property transactions, or if you are advising a client buying in Spain, get in touch now.