How to Structure Property Ownership in Spain and Portugal: Trusts, LLCs, and Tax Strategies for U.S. Citizens

When high-net-worth U.S. individuals invest in European real estate—particularly in Spain or Portugal—the real challenge lies not in the property, but in how it’s held. Ownership structures aren’t just legal formalities: they’re powerful tools for asset protection, tax efficiency, succession clarity, and financial control.

With decades of experience guiding global families, Beyond offers clarity in a landscape full of nuance and complexity.

1. Why Ownership Structure Matters

A simple personal purchase may introduce serious risks:

🇺🇸 U.S. Estate Tax Exposure: Without strategic planning, estates over ~$13 M may trigger up to 40% U.S. inheritance tax on foreign real estate.
🔄 Double Taxation: Owning abroad can lead to unwanted global tax burdens unless structure and residency are managed correctly.
⚖️ Legal Liability: Personal ownership exposes your global assets to lawsuits or claims connected to the foreign property.

Conversely, with effective structures like LLCs, Trusts, or International Holdcos, you can maintain control while benefiting from:

✅ Limited liability protection
✅ Tax treaty advantages
✅ Easier succession and transparent disposition
✅ Professional-grade asset management

2. Structuring Options for U.S. Clients

🔒 A. U.S. LLC Owning Property Abroad

Why it works: Pass-through entity keeps U.S. tax reporting simple while shielding your global estate.

Care points: Must file FBAR, Form 5472, pay Spanish/Portuguese taxes on net rental income.

Best for: Investors who live in the U.S. and want strong control and asset separation.

🏝️ B. Offshore Holding (e.g., BVI, Jersey)

Advantages: Privacy, estate planning, UK/Portugal’s Non-Habitual regimes, plus possible VAT benefits.

Risks: U.S. Controlled Foreign Corporation (CFC) rules apply; demands structured compliance to avoid “Subpart F” income triggers.

🧑‍⚖️ C. Domestic Trusts

Why they help: Can protect against U.S. estate taxes and hold foreign real estate efficiently.

But: Complex to implement and manage across jurisdictions—best with legal coordination.

🏛️ D. Hybrid Model: EU Parent + U.S. LLC

Structure: Spain/Portugal property → EU entity → U.S. LLC

Benefits: Strong asset protection, deductible interest, estate tax efficiency, and treaty advantages.

Ideal for: Clients valuing both EU tax alignment and U.S. liability separation.

3. Spanish & Portuguese Tax Considerations

🇪🇸 Spain

Estate Tax: Applies to all worldwide property if you become tax resident
Wealth Tax: Progressive up to ~3.5%, with small allowances per region
Rental Income: Taxed at ~19–24% for EU firms, 24% for non-residents

🇵🇹 Portugal

D7 & Golden Visa residence may allow use of the NHR regime
Wealth Tax: None
Rental Income: ~28–35% flat; reduced to 20% under NHR
Capital Gains: 50% exclusion under NHR; otherwise taxed at 28%

4. Beyond’s Approach: Clarity, Oversight & Integration

As your strategic partner—not a faceless agency—Beyond provides:

Personal consultation to assess goals, residency strategy, and legacy plan
Coordination with leading tax, legal, and trust experts across both continents
Implementation of the optimal structure for liability, taxation, and estate planning
Ongoing oversight, especially around compliance, legal changes, or renewal of residency status

5. Sample Scenario: Tech Entrepreneur Buying in Lisbon

✔️ Held through a U.S. LLC → mitigates U.S. estate tax
✔️ Benefiting from Portugal’s NHR → 20% tax on dividends, 0% on most foreign income
✔️ Rental income is taxed at 28%, with straightforward declaration via tax advisor
✔️ Property inherited seamlessly by spouse without multiple probates

⚠️ Key Warnings to Avoid

Personal ownership in Spain/Portugal exposes your entire global estate
U.S. entities must maintain strict records, timely tax filings, and avoid “Subpart F” traps
Never mix personal funds with corporate accounts—risking recharacterization or fines
Improper use of residency—like the 183-day rule—can abruptly shift your global tax status

✨ Conclusion: Build Wealth Beyond Borders—Strategically

Structuring your real estate investment transcends geography—it secures lifestyle, legacy, and liquidity across continents.

At Beyond, we don’t just connect you with properties — we deliver integrated, global-grade systems for sustainable wealth and mobility.

👉 Next step

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