SL vs Holding vs SOCIMI vs Individual: Which Structure Saves You the Most Taxes?

Choosing the right structure can mean paying 24% or only 15% in taxes. Here are the 4 main structures with real cases and when to use each one.

The 4 Fiscal Structures for Real Estate Investment

Quick comparison:

• Individual: 24% fixed | Limited deductions | Low complexity | Best for < €500K

• Spanish SL (Limited Company): 25%/23% | Maximum deductions | Medium complexity | Best for €500K–2M

• International Holding: Variable | Maximum deductions | High complexity | Best for > €2M

• SOCIMI (Spanish REIT): 0%/1% (transparency) | High complexity | Best for > €5M

Individual: The “Simple” Trap

When to use it:

• Small portfolios (< €500K)

• Single investment, no growth plan

• Need for maximum simplicity

• Partial personal use

Advantages:

• Maximum simplicity

• No company formation

• Minimal maintenance costs

• Direct tax transparency

Disadvantages:

• Non-resident tax: 24% fixed

• Very limited deductions

• No dividend planning

• Complex inheritance rules

• Unlimited liability

Case – Apartment in Seville (€400K):Annual rent: €20,000Deductions: €2,000Taxable base: €18,000Tax: €4,320 (24%)Effective: 21.6%

Spanish Limited Company (SL): The Perfect Balance

When to use it:

• Portfolios €500K–2M

• Growth strategy

• Priority on tax optimization

• Separation of personal and business assets

Advantages:

• Corporate Tax: 25% (23% first €300K)

• Depreciation: 3% annual deductible

• 100% deductible expenses

• Dividend planning: 5–19%

• Profit reinvestment deferral

Case – Madrid Portfolio (€800K, SL):Annual rents: €48,000Deductible expenses: €18,500Depreciation: €8,000Interest: €6,200Maintenance/insurance: €4,300Taxable base: €29,500Corporate Tax (25%): €7,375Effective: 15.4% vs 24% individualSavings: €4,145/year

International Holding: For Sophisticated Portfolios

When to use it:

• Large portfolios (> €2M)

• Multiple jurisdictions

• Complex succession planning

• Leverage Spain’s treaties

Typical structure:

• Investor (home country)

• Holding in Spain

• Subsidiaries in each country (Portugal, France, Italy)

Strategic advantages:

• Access to Spain’s 104 treaties

• Group tax consolidation

• Indefinite deferral

• Succession planning optimization

• Jurisdiction diversification

• Maximum flexibility

Case – LATAM Family Office (€5M):

• Spanish Holding: €2M in Madrid + Barcelona

• Portugal Subsidiary: €1.5M (NHR regime)

• France Subsidiary: €1.5M (treaty network)

Tax optimization:

• Spain: 25% Corporate Tax + deductions

• Portugal: 20% NHR

• France: tax credits

Consolidated effective tax: 12.8%Without structure: 27.3% averageWith holding: 12.8%Savings: €72,500/year (53%)

SOCIMI: Professional Tax Transparency

When to use it:

• Institutional portfolios (> €5M)

• Diversified assets

• Multiple sophisticated investors

• Long-term buy-and-hold

Requirements:

• Minimum capital: €5M

• 80% in real estate assets

• 80% of income from rental/sales

• 80% profits distributed

• Stock exchange listing or > 25 shareholders

Advantages:

• Corporate Tax: 0% (if 80% distributed)

• Corporate Tax: 19% (on reserves)

• Transparency: shareholders taxed

• Dividend exemption (EU residents)

• Capital gains exemption for qualifying properties

Case – SOCIMI Madrid (€8M):Annual rents: €480,000Expenses: €180,000Profit: €300,000Mandatory distribution: €240,000 (80%)Tax on reserves: €11,400 (19% of €60K)Effective tax: 2.4%Final taxation: at shareholder level

Decision Matrix

• Portfolio €300K–500K: Individual (or SL if growth expected)

• Portfolio €500K–1M: SL (savings €8K–15K/year)

• Portfolio €1M–3M: SL + Holding (savings €15K–40K/year)

• Portfolio > €3M: Holding (savings €40K–100K+/year)

• Portfolio > €5M: SOCIMI vs Holding (savings €80K–200K+/year)

Additional Factors

Operational: properties, geography, investor profile, time horizonFiscal: residency, other income, succession, global vs local optimizationFamily: family structure, generational planning, asset protection, flexibility

Implementation

SL:Week 1: designWeek 2: incorporationWeek 3: bank accountsWeek 4: transfer assetsMonth 2: full setup

Holding:Month 1: designMonth 2: jurisdiction setupMonth 3: fiscal implementationMonths 4–6: asset migration

Costs:

• SL: €3K–5K

• Holding: €15K–25K

• SOCIMI: €50K–100KTypical ROI: 2–6 months

The right structure is the one that maximizes your wealth after taxes, not before.Want to design the optimal structure for your portfolio? Request your personalized analysis.