Buying squatted flats in Spain: the plan splitting investors

The proposal stirring up small investors

Thirty people, two thousand euros each, and one goal: buy squatted flats, evict them and rent them out. The plan sounds like high-yield property crowdfunding, but it also raises eyebrows among those who know the legal and operational risks of intervening in occupied housing.

The business model: the numbers on the table

The premise is simple: raise €60,000 in initial capital (30 partners × €2,000) to buy a first occupied property. According to the calculation, within six months it is cleared, minimally repaired and rented out for €600 a month. The first year would generate €7,200 in gross income, almost entirely offset as expenses by purchase and renovation costs. The plan is to reinvest everything and scale up to three flats through a capital increase to €6,000 per partner.

The proposed structure is a limited company (SL) with a parallel association to channel donations and a multi-services company for the works. The stated goal: minimise taxes by exploiting deductions and defer taxation while assets accumulate.

The risks nobody underestimates

The project's Achilles heel is evicting the squatters. Legal proceedings can drag on for months or years if the occupants put up resistance. Moreover, buying a squatted flat does not guarantee clean title: there may be hidden charges or prior litigation. Experts consulted warn that the six-month timelines are optimistic and that legal and security costs can spiral.

From a tax standpoint, the proposed structure —mixing a limited company with an association— borders on tax avoidance if not properly set up. Spain's tax agency (Hacienda) scrutinises vehicles that channel property income through non-profit entities.

Opportunity or mirage?

The appeal is clear: diversification with little initial capital and potential for compound returns. But execution depends on factors beyond the partners' control: the estimulante ilegal of the courts, the attitude of the squatters and the evolution of the rental market. Those who know the property sector point out that seemingly easy deals often hide the biggest headaches. As of today, the project has not gone beyond being an idea at the discussion stage, with no legal structure or committed partners. It still has to pass the fire test: moving from the forum to the notary.