Many international clients own their home in Spain through a company. When they sell, a common question is how the gain is taxed. A recent ruling by the Central Economic-Administrative Tribunal (TEAC) offers a useful rule: the tax authorities cannot take for granted that a company’s property was rented out or made available to others, and therefore cannot reduce its acquisition value with depreciation without proving it.
The case in brief
A civil company with non-resident partners sold a property in Spain in 2022 for 450,000 euros. In its Non-Resident Income Tax (IRNR) return it declared a capital loss. The Tax Agency adjusted the return and claimed tax plus interest, assuming the home had been rented or at the partners’ disposal for 4,191 days, and deducted the corresponding depreciation from the purchase value.
What the TEAC says
On this point the Tribunal sided with the taxpayer in essence. It explains that the authorities must show, with direct or indirect evidence, that the property was rented or made available. Ownership by a company is not enough. Without proof, that depreciation cannot be applied.
There is an important nuance, though. The company itself acknowledged in its defence a period of 1,500 days of rental or use, and the TEAC accepted that acknowledgement: the assessment must be recalculated using depreciation for those 1,500 days only. In other words, what you admit can be used against you.
The Tribunal did reject other claims: adding roughly 356,000 euros of building costs to the acquisition value, because the partner, not the company, had contracted and paid for the works before the company existed, and deducting 25,000 euros for furniture, because its purchase and separate sale were not proven.
What this means if you own property in Spain
First, keep your evidence. Anyone claiming an improvement, building works or furniture must prove it with invoices, payments and contracts in the name of whoever actually bears the cost. A deed mentioning an amount is not enough.
Second, be careful about who pays for what. If a partner pays for works before the company is set up, that investment does not automatically become the company’s acquisition value. It is better to sort this out before buying or renovating, not when a sale is already under way.
Third, think about how the property is used. If it has been made available to partners or directors, or rented out, there are tax consequences; if not, document it. A clear record of occupancy, contracts and utility bills can be decisive.
Fourth, do not forget the deadlines and Form 210, the return non-residents use to pay tax on these gains.
Conclusion
This ruling reinforces a simple idea: in international property taxation, the one who can prove what they say comes out ahead. If you own, or plan to sell, a property in Spain through a company or from abroad, review your situation before signing. At EBF Consulting we can help you prepare the paperwork and estimate the expected tax.
Official reference: Resolution of the Central Economic-Administrative Tribunal (TEAC), First Chamber, R.G. 7794/2023, 24 September 2026.