Taxation
Tax advantages of Sale & Leaseback for companies in Spain
The transaction not only frees up capital: when well structured, it generates significant tax benefits that many companies are unaware of.
Verónica Martín·MRICS·May 2026·8 min read
Introduction
When a company assesses a sale and leaseback transaction, the focus is usually on liquidity: how much capital it can release and at what cost. But there is one dimension that is often underestimated in the initial analysis: the tax treatment of the transaction.
In Spain, a properly structured sale and leaseback can generate significant tax advantages both at the time of the asset transfer and during the subsequent lease phase. It can also entail obligations that, if not anticipated, will erode the net result of the transaction.
This article does not replace specialist tax advice —each transaction has its own specifics— but it does offer a clear map of the tax landscape every company should understand before sitting down to negotiate.
Important note: The taxation of sale and leaseback in Spain depends on multiple factors: the company's legal form, the type of asset, the lease structure and the applicable accounting framework. This article describes the most common general treatment. Always consult a specialist tax advisor before making decisions.
1. Corporate Income Tax: capital gain on the transfer
The sale of the property triggers, in almost all cases, a capital gain —the difference between the sale price and the asset's net book value— taxed as ordinary income under Corporate Income Tax (CIT) at the general 25% rate.
Can the capital gain be deferred?
In certain circumstances, article 22 of the Spanish CIT Law allows deferral of the capital gain when there is reinvestment in assets used in the company's activity. However, in a sale and leaseback, qualifying for deferral requires careful analysis: the company is no longer the owner of the asset, and the lease does not always qualify as reinvestment for tax purposes.
The Spanish General Directorate of Taxes (DGT) has issued binding rulings on this point with criteria that should be reviewed before designing the transaction. A planning error can result in the entire capital gain being taxed in the year of transfer.
Net book value: the critical variable
The more depreciated the property, the larger the gap between the sale price and its net book value and, consequently, the larger the taxable capital gain. In many cases, the properties of mid-sized companies have been on the balance sheet for decades and their book value is marginal. This pushes the taxable gain to its maximum and makes prior planning essential.
The capital gain is not an obstacle, it is a variable to be planned. A well-structured transaction can partially neutralise its impact through perfectly valid legal mechanisms.
2. Deductibility of lease payments
This is where sale and leaseback offers its main sustained tax advantage over time: lease payments are, as a general rule, deductible expenses for Corporate Income Tax purposes.
This means that, from closing onwards, the company can deduct 100% of the annual rent paid to the investor as an operating expense. On a contract with €500,000 of annual rent and a 25% tax rate, the annual tax saving is €125,000.
Comparison with the previous situation (ownership)
When the company owned the asset, the only deductible expense was the annual depreciation of the property, calculated on the acquisition value and capped by the maximum legal coefficients (typically in the 2-3% per year range for buildings).
| Scenario | Annual deductible expense | Annual tax saving (25%) |
|---|---|---|
| Owned — Depreciation (2% on €5M) | €100,000 | €25,000 |
| After S&L — Lease payment | €350,000 | €87,500 |
| Annual difference | €250,000 | €62,500 |
Indicative example based on a €5M market value asset. Actual rent depends on market yield and negotiated terms.
3. VAT: the area that generates the most mistakes
The transfer of a property in a sale and leaseback may be subject to 21% VAT or, conversely, exempt if it is the second or subsequent transfer of a completed building.
When is VAT due on the transfer?
The transaction will be subject to and not exempt from VAT mainly when the transferor is a VAT taxable person who has waived the exemption. Waiver is possible when the acquirer is also a taxable person with full or partial right of deduction.
In many sale and leaseback transactions with institutional investors, the reverse charge mechanism applies, which simplifies settlement, although it does not eliminate the formal obligation.
The subsequent lease: subject to VAT
Lease payments on properties used for economic activities are subject to 21% VAT. The company will pay rent with VAT included, which in most cases it can deduct in its periodic VAT return if it carries out taxable activities. The net cost is nil for companies with full right of deduction.
Caution: If the tenant company has a prorata deduction below 100% (because it carries out VAT-exempt operations such as certain financial, healthcare or educational activities), the VAT on lease payments can become a real cost that must be quantified in the economic analysis of the transaction.
4. Transfer Tax (ITP)
When the transfer is exempt from VAT, the Transfer Tax (ITPyAJD) may apply. It is managed by the Autonomous Communities, with rates generally ranging between 6% and 10% depending on the region.
This tax is borne by the buyer (the investor), but it can influence the net negotiated price and the investor's appetite for the transaction. Its amount can be decisive in structuring the deal and is one of the factors that justify analysing whether or not to waive the VAT exemption.
5. Municipal Capital Gains Tax (IIVTNU)
The transfer of the property triggers the Tax on the Increase in the Value of Urban Land (IIVTNU), known as municipal capital gains tax. Following the 2021 reform, the tax can be calculated using two alternative methods, and the taxpayer can choose the more favourable one.
In transfers where land value has increased significantly —common in well-located logistics assets in high-growth areas— this tax can represent a relevant cost that must be integrated into the financial analysis of the transaction.
6. Accounting treatment and its tax impact: IFRS 16
For companies applying International Financial Reporting Standards (IFRS), the lease following a sale and leaseback is accounted for under IFRS 16, which requires recognising a right-of-use asset and a lease liability on the balance sheet.
This has tax implications: the difference between the accounting expense (depreciation of the right-of-use asset + implicit interest on the liability) and the cash rent paid can give rise to temporary differences that affect the effective CIT rate. Managing these differences requires coordination between the accounting team and the tax advisor.
For companies applying the Spanish General Accounting Plan (PGC) —most SMEs and unlisted companies—, criteria may differ and the accounting management burden is generally lower.
7. Prior tax planning: the decisions that have the biggest impact
There are several planning levers a company can activate before executing the transaction to optimise its tax position:
- Review the asset's net book value: in some cases it may be advisable to perform a prior accounting revaluation that reduces the taxable capital gain at transfer.
- Analyse possible application of the reinvestment exemption: if the proceeds are reinvested in qualifying assets, there may be room to defer part of the gain.
- Optimise the transaction structure: in corporate groups, it may be more efficient for the transaction to be executed by a group entity with specific tax features.
- Negotiate VAT treatment with the investor: the decision to waive or not the VAT exemption must be made with a complete view of the global tax cost for both parties.
- Coordinate closing with the fiscal year: the timing of closing affects which year the capital gain is taxed in and when rent deductibility starts.
Summary: the net tax impact
The taxation of sale and leaseback is not, in general terms, an obstacle that should discourage the transaction. It is a variable that must be understood, quantified and rigorously planned. Well managed, the net tax effect can be neutral or even positive in the medium term thanks to the higher deductibility of lease payments versus prior depreciation.
The most common mistake is not that companies decide badly: it is that they decide without complete information. A transaction executed without prior tax analysis can cost several hundred thousand euros in taxes that, with proper planning, would have been perfectly manageable.
Key takeaways
- The capital gain on transfer is taxed under CIT. Its impact depends on net book value and can be planned.
- Lease payments are fully deductible — a sustained tax advantage throughout the lease term.
- VAT on the transfer requires specific analysis: subjection, exemption or reverse charge depending on the case.
- Transfer tax (ITP) may apply if there is no VAT — a cost for the buyer that influences price negotiation.
- Municipal capital gains tax is a real cost that must be quantified.
- IFRS 16 has accounting and tax implications for groups that consolidate.
- Prior planning can make a difference of hundreds of thousands of euros.
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Verónica Martín Tolosa, MRICS
25+ years connecting real estate with institutional investment, sustainability and long-term value creation. Published author, RICS Spain member and specialist in sale & leaseback transactions in Spain and Europe.