The sale and leaseback (sale with subsequent leaseback) consists of selling a property or a machine to an investor and continuing to use it as a tenant. Your company receives the price in a lump sum and in exchange pays rent for an agreed term, sometimes with a repurchase option. What determines its effect on your financial statements is whether it is a true sale or, in substance, secured financing.
This guide is for the CFO with owned warehouses, offices or machinery who needs liquidity. Rules consulted as of 1 November 2026.
How leaseback works and who is involved
The transaction combines two contracts signed on the same day: a sale and a lease of the same asset. Price, rent, term and repurchase are negotiated together, because each one affects the others.
- Valuation. You commission an independent valuation and gather the asset's title deeds, licenses and encumbrances.
- Negotiation. The buyer sets the price according to the return it requires on the rent. The higher the rent or the longer the mandatory term, the higher the price.
- Review. The buyer analyzes the asset and, above all, your solvency as a tenant.
- Signing. Sale deed, registration at the Land Registry and lease agreement.
Your company acts as seller and lessee, and a buyer-lessor: a fund, a SOCIMI, an insurer or a leasing company.
For a warehouse, the lease is for non-residential use and is governed by what you agree (Law 29/1994, art. 4.3). Check the mandatory term, who pays IBI, insurance and works, and when you can assign the contract.
Criterion: negotiate the rent and the repurchase before the price. A high price with a rent your cash flow cannot support is a bad deal.
When it is advisable and when it is not
| Advisable if… | Not advisable if… |
|---|---|
| You have no other source of liquidity at that cost. | The rent ties up your cash in a bad year. |
| You will invest the money in something that yields more than the cost of the rent. | You expect strong appreciation of the property. |
| You need the property to operate but not to own it. | The asset is so specific that the buyer will demand a very high return. |
| The bank no longer lends you more against a mortgage. | The tax on the profit from the sale eats up a large part of the liquidity. |
Criterion: compare the after-tax effective cost of the rent with that of a mortgage or a debt issuance on the same asset.
Accounting: sale or financing?
Under the Spanish General Accounting Plan (NRV 8.ª)
The PGC presumes that a finance lease exists when there is no reasonable doubt that you will exercise the purchase option, among other cases (PGC, NRV 8.ª, section 1.1). If the sale and leaseback are in substance a financing method, you do not recognize a gain. You keep the warehouse on the balance sheet and record the amount received as a financial liability (NRV 8.ª, section 3).
If the subsequent lease is an operating lease, you derecognize the warehouse and take the difference between the net price and the carrying amount to profit or loss (NRV 2.ª, section 3; ICAC Resolution of 1-3-2013, standard four). The lease payment becomes an expense for each year (NRV 8.ª, section 2). If the combined lease of land and building is a finance lease, the land is treated separately as an operating lease, unless you expect to acquire ownership of it (NRV 8.ª, section 4).
Under IFRS 16 (if your group applies IFRS)
IFRS 16 refers to IFRS 15: there is a sale only if the buyer obtains control of the asset (IFRS 16, para. 99). If you have a right or an obligation to repurchase, the buyer does not obtain control: you continue to recognize the asset and record a financial liability for the amount received (IFRS 15, para. B66).
If there is a sale, you recognize a right-of-use asset for the portion of the carrying amount that you retain and only the gain on the rights transferred to the buyer (IFRS 16, para. 100.a). From annual periods beginning on 2024, after the commencement date, the lease liability is recalculated without recognizing a gain or loss on the retained right of use (para. 102A; texts in Regulation (EU) 2023/1803 and Regulation (EU) 2023/2579).
| Situation | PGC | IFRS 16 |
|---|---|---|
| No repurchase and operating lease | Derecognition of the asset, full gain in profit or loss, rent as an expense | Sale, but partial gain and lease liability on the balance sheet |
| Repurchase that you are highly likely to exercise | Financing: asset on the balance sheet and financial liability | No sale: asset on the balance sheet and financial liability |
| Any repurchase option in your favor | Depends on the economic terms | No sale (para. B66) |
Criterion: if you are looking to improve debt ratios, the repurchase usually cancels out the effect. Decide beforehand whether you need it.
Basic tax treatment in Spain
The sale of a used warehouse is, in principle, a second supply of buildings exempt from VAT (LIVA, art. 20.Uno.22.º). If it remains exempt, in common territory the buyer pays transfer tax on onerous transfers at the rate set by the autonomous community or, if it has not set one, at 6% (TRLITPAJD, arts. 6.2, 7.5, 8.a and 11.1.a).
You can waive the exemption when the buyer is a business entitled to deduct input VAT (LIVA, art. 20.Dos). In that case the sale is subject to VAT, the buyer declares it under the reverse charge mechanism and the deed is subject to stamp duty (LIVA, art. 84.Uno.2.º.e; TRLITPAJD, art. 31.2). If the land is urban, you may also as seller be liable for the municipal tax on the increase in value of land (TRLRHL, art. 106.1.b).
Two nuances. If you repurchase by exercising the option under a finance lease of at least ten years with a company regularly engaged in that business, that supply is not exempt (LIVA, art. 20.Uno.22.º.A, letter a). In addition, the CJEU held, subject to verification by the national court, that purely financial sale and leaseback transactions were not supplies of goods for VAT purposes (Case C-201/18, Mydibel, of 27-3-2019, paragraphs 40 and 41). There was no sale and purchase, but a right of emphyteusis and a lease with a purchase option. If your transaction is not a supply either, how it is taxed for ITP depends on its classification: consult an advisor.
For corporate income tax, the base starts from the accounting result (LIS, art. 10.3) and the general rate is 25%, with lower rates for entities with a lower turnover (art. 29.1). If there is a sale, the gain is taxed and the rent under an operating lease reduces the base. If it is financing, there is no gain: you continue depreciating the warehouse and deduct the interest. These are added to the company's net financial expenses, deductible up to 30% of its operating profit or, in any case, up to €1 million (LIS, art. 16.1).
Action: ask your tax advisor to classify the transaction before signing. VAT or ITP and corporate income tax depend on this.
Example: sale and leaseback of a warehouse worth €3 million
Illustrative assumptions, not market data: warehouse appraised at €3,000,000, carrying amount of €1,200,000, agreed yield of 6.5% and mandatory term of 15 years. Transaction costs are 1% of the price. The annual rent is €195,000 (€16,250 per month), not indexed.
Scenario A, no repurchase. The present value of the rents at 6.5% is about €1.83 million, 61% of the warehouse's value. As the term also does not cover most of its economic life, under the PGC it points to an operating lease. The accounting gain is €1,770,000 (price less carrying amount and costs) and the tax at the general rate is €442,500.
Scenario B, with repurchase at €3,000,000 in year 15 that you will very likely exercise. It is financing: there is no gain, the warehouse remains on your balance sheet and you record a liability of €3,000,000. As the repurchase price equals the sale price, the implicit rate is exactly 6.5% and all the rent is interest.
| Concept | A: without repurchase | B: with repurchase |
|---|---|---|
| Price received | €3,000,000 | €3,000,000 |
| Transaction costs (1%) | −€30,000 | −€30,000 |
| Tax on profit (25%) | −€442,500 | €0 |
| Initial net liquidity | €2,527,500 | €2,970,000 |
| Rent for 15 years, not indexed | €2,925,000 (deductible expense) | €2,925,000 (interest, subject to art. 16 LIS) |
| Payment in year 15 | None; the warehouse is no longer yours | €3,000,000 to recover it |
| Treatment under IFRS 16 | Sale with partial gain and lease liability | Financing |
Add municipal capital gains tax, if applicable, and the rent review. In A, the buyer will deduct from the price the ITP or AJD payable by it; in B, VAT and ITP depend on the classification.
Decision: A gives less cash and takes the asset away from you, but it clears the balance sheet under the PGC. B gives more cash, but it is debt for all purposes.
Costs you need to budget for
- Rent: the return the buyer requires, plus its annual review.
- Transaction costs: appraisal, notary, registry, advisors and intermediary.
- Property costs: under a “triple net” contract, you pay the IBI, insurance and maintenance.
Action: calculate the total cost of occupying the warehouse (rent plus the costs you assume) and compare it with what it costs you today to own it.
Sale and leaseback, mortgage or bonds secured by the property through an SPV
The three routes turn the property into financing, but they change ownership, the amount and how it is reflected in your accounts.
| Criterion | Sale and leaseback | Mortgage loan | Bonds secured via SPV |
|---|---|---|---|
| Ownership of the property | Transfers to the buyer (unless repurchased) | Remains yours, with a mortgage | Depending on the structure: it transfers to the SPV or is mortgaged in favor of the bondholders |
| Amount secured on a warehouse of €3M | Up to the sale price | The percentage of the appraisal that the bank lends | The amount placed, with the collateral margin requested by investors |
| Balance sheet under the PGC | No debt if the lease is operating | Debt | SPV debt, which you generally consolidate if you control it |
| Collateral | The property itself | Mortgage | Mortgage in favor of the bondholders (LSC, art. 404), with registration treatment to be confirmed if they are tokenized |
The third route works like this: a special purpose vehicle (SPV) issues bonds secured by a mortgage over the warehouse and, with the proceeds, buys the property or lends the money to your company. If the SPV is a private limited company, its issuances cannot exceed twice its equity, unless, among other cases, they are secured by a mortgage (LSC, art. 401.2). Transferring the warehouse to the SPV has its own tax cost: measure it before.
The LSC allows that mortgage in favor of present and future holders (art. 404). But the Mortgage Law regulates it for endorsable or bearer securities (arts. 154 to 156) and Law 6/2023 does not provide a mortgage rule for securities on distributed ledgers: their registration is not clear-cut and you must confirm it with the registrar. If the SPV raises capital from several investors, assess with your adviser whether it would be a collective investment entity (Law 22/2014, art. 4).
Those bonds can be represented on a register based on distributed ledger technology, with an authorized entity that manages the registration (Law 6/2023, arts. 6.1 and 8.4). HokenFi is the software with which a company issues those tokenized securities, integrated with URSUS-3 Capital, A.V., S.A., the ERIR registered with the CNMV. The guide to issuing bonds as a company walks through the process.
Criterion: if you want to keep the upside and have debt capacity, look at the mortgage or the bonds. If you want to remove the asset from the balance sheet, look at the sale and leaseback without buyback.
Mexico and Chile
Mexico. A financial lease is a disposal for tax purposes (CFF, art. 14, section IV). If the buyback is structured this way, you deduct the investment based on the value agreed in the contract, and the difference from the total payments is interest (LISR, arts. 8 and 38).
Chile. The VAT Law taxes as a sale lease agreements with a purchase option over real estate entered into by a seller, that is, by someone who regularly sells real estate (DL 825, arts. 2.3.º and 8, letter l). The SII confirmed in its Ruling 158 of 20-1-2016 that leaseback installments are taxed when that letter is met. It also taxes the sale of real estate from fixed assets when there was a right to a tax credit on its acquisition or construction (art. 8, letter m).
Action: validate the tax treatment with a local adviser before negotiating the price.
Common mistakes
- Agreeing a buyback to improve the balance sheet: under IFRS, and sometimes under the PGC, the transaction is still debt.
- Failing to plan for a relocation, an expansion or the assignment of the contract before the mandatory term ends.
If your company develops or operates real estate, the tokenization for the real estate sector page explains how to structure your own issuance.
This content is informative and educational. It does not constitute legal, tax or investment advice. Verify the current version of the rules in the official sources before making decisions.
HokenFi is a software and infrastructure provider; it does not provide regulated services (CASP, ESI, EAF, or ERIR). This article is informative and does not constitute financial or legal advice.
Frequently asked questions
What is the difference between lease back and leasing?
In leasing, a financial institution buys from a supplier the asset you choose and transfers it to you with a purchase option. In lease back, the asset is already yours: you sell it to the financier and keep using it. It can be structured as a finance lease or as a lease without buyback, and that choice changes the accounting and taxes.
Does sale and leaseback appear as debt on the balance sheet?
It depends on the accounting framework and the contract. Under the General Accounting Plan, a true sale followed by an operating lease does not create a liability and the rent is recorded as an expense. If the transaction is in substance financing, there is a liability. Under IFRS 16 there is almost always a liability: lease liability if there is a sale, and financial liability if there is not.
Can it be done with machinery and not only with real estate?
Yes. The PGC lease standard and IFRS 16 also apply to machinery. What changes is the tax treatment: the VAT exemption for second and subsequent supplies covers only buildings, so the sale of a machine follows its own rules. In addition, the buyer will assess how much the equipment depreciates and whether it could relocate it if you stop paying.
Who pays ITP in a sale with subsequent leaseback?
If the sale of the warehouse is VAT-exempt and the exemption is not waived, the buyer pays the transfer tax as acquirer. Even so, the cost is not neutral for you: the investor includes it in their return calculation and deducts it from the price or passes it on to the rent. It is worth negotiating it with numbers from the first offer.
