Traspaso vs Freehold – What’s the Difference When Buying a Restaurant in Spain?

Browse restaurants for sale in Spain and you will immediately meet a word that has no clean English translation: traspaso. Some listings say “traspaso €90,000”, others “freehold €790,000” – for what can look like similar venues. Understanding the difference is the single most important piece of knowledge for anyone entering the Spanish hospitality market, because it determines what you actually own, what you pay monthly, what taxes apply and what happens if things go wrong.

This guide explains both routes properly – how a traspaso really works, what freehold ownership involves, the hybrid options in between, and a practical framework for choosing the right structure for your situation.

What is a traspaso?

A traspaso is the transfer of a running business together with the right to step into its existing rental lease. You pay a one-off transfer fee to the outgoing tenant – compensating them for the business, the fit-out, the licences in place and the value of a good lease in a good location – and from completion you pay the monthly rent to the landlord under the same (or a renegotiated) lease contract.

Crucially, in a traspaso you do not buy any property. What you acquire is: the business as a going concern (name, clientele, equipment, stock), the benefit of the lease, and the operating licences, which are transferred to your name via a change of ownership (cambio de titularidad) at the town hall. The lease contract is therefore the heart of the deal, and three things in it deserve forensic attention:

• Duration and renewal – how many years remain, and on what terms it renews. A €150,000 traspaso on a lease with two years left and no renewal right is a very different proposition from the same fee with ten years of security.
• Rent and review clauses – the current rent, indexation (typically linked to inflation), and any stepped increases. Experienced operators want total rent below roughly 10% of expected turnover.
• Transfer and landlord rights – whether the lease permits transfer at all, whether the landlord’s consent is needed, and whether the landlord is entitled to a rent increase or a share of the transfer fee on assignment, as older Spanish lease rules and many contracts provide. This must be checked contract by contract before you pay anything.

What is a freehold purchase?

A freehold purchase means buying the premises themselves – the local comercial – usually together with the business operating inside it. You become the owner of the real estate, registered at the Land Registry via a notarised deed, with no rent to pay and no landlord to answer to. Freeholds trade at much higher prices than traspasos for equivalent venues, because you are buying an appreciating asset as well as a business: the same restaurant might be €90,000 as a traspaso or €500,000–800,000 with the walls included.

Freehold ownership brings its own obligations: property transfer tax or VAT on purchase, annual property tax (IBI), community fees if the premises sit in a building with a community of owners, and full responsibility for the structure. But it also brings powerful advantages: you can never be priced out by rent reviews, you can mortgage the asset, you can lease it out yourself one day, and your exit options multiply – sell the business, sell the property, or sell both.

Traspaso vs freehold: side-by-side comparison

• Upfront cost – traspaso: low to moderate (commonly €50,000–400,000 on the Costa del Sol). Freehold: high (typically several times the traspaso value).
• Monthly cost – traspaso: rent, usually with annual indexation. Freehold: no rent; IBI, community fees and any mortgage instead.
• What you own – traspaso: the business and the benefit of a lease. Freehold: the business and the bricks.
• Security – traspaso: limited to the lease term and its renewal rights. Freehold: permanent.
• Taxes on purchase – traspaso: transfer tax may apply to the traspaso and lease assignment, with professional advice needed on the exact treatment; a transfer of a whole going concern is generally outside VAT. Freehold: property transfer tax (around 7% in Andalusia for resale premises) or VAT plus stamp duty on new builds. See our full guide to costs and taxes.
• Financing – traspaso: rarely bank-financed; buyers typically use cash or vendor terms. Freehold: mortgageable, usually up to a portion of the property value.
• Exit – traspaso: sell the traspaso on (subject to the lease) – its value can rise or fall with the lease terms and location. Freehold: sell business, property or both; property value moves with the real-estate market.

The in-between options: share deals and rent-to-buy

Two hybrid structures appear frequently in the Spanish market. First, buying the company (S.L.) that runs the restaurant rather than the assets: the lease, licences and contracts stay untouched inside the company, which can simplify transfers – but you also inherit the company’s entire history, so due diligence must extend to its accounts, tax filings and liabilities. Second, some sellers offer both routes on the same venue (“traspaso or sale”), or structures such as an initial traspaso with an option to purchase the freehold later – useful when you want to prove the trade before committing property-level capital.

Which should you choose? A practical framework

1. Capital available – if your total budget is under roughly €300,000–400,000 on the Costa del Sol, the traspaso market is where the realistic opportunities live. Freeholds suit buyers ready to deploy property-level capital.
2. Time horizon – planning a 3–5 year adventure? A traspaso with a solid lease matches your horizon without tying up capital. Building a 15-year family business or an investment portfolio? Freehold security compounds in your favour.
3. Risk appetite – a traspaso concentrates risk in one document (the lease); a freehold spreads risk into the property market. Neither is “safer” in the abstract – it depends on the lease terms and the location.
4. Return focus – operators seeking cash-on-cash returns from trading often prefer traspasos (less capital in, faster payback). Investors seeking asset growth plus income prefer freeholds.
5. The venue itself – ultimately, a great business on a fair, long lease beats a mediocre business you happen to own outright. Judge the trade first, the structure second.

Whichever route you take, the golden rule is the same: the documents define the deal. Have a lawyer review the lease or the title, verify the licences, and confirm the numbers before money moves. Our step-by-step buying guide and due diligence checklist walk you through exactly how.

Frequently Asked Questions (FAQ)

What does traspaso mean in Spain?

A traspaso is the transfer of a running business together with the right to take over its existing rental lease. The buyer pays a one-off fee to the outgoing tenant for the business, fit-out and lease benefit, then pays monthly rent to the landlord. No property changes hands – which is why traspaso prices are far lower than freehold prices for similar venues.

Is a traspaso safe to buy?

It can be very safe if the lease is sound: check the remaining duration and renewal rights, the rent and its review clauses, and whether the landlord must consent to the transfer or is entitled to a rent increase on assignment. A lawyer should review the lease and licences before any payment. The traspaso is only as good as the lease behind it.

Do I pay rent after buying a traspaso?

Yes. The traspaso fee is a one-off payment to the outgoing tenant; from completion you pay the monthly rent to the landlord under the lease you have taken over, typically with annual inflation-linked increases. Always calculate the rent as a percentage of expected turnover – experienced operators aim for rent below roughly 10% of sales.

Why are freehold restaurants in Spain so much more expensive?

Because you are buying the real estate as well as the business. A venue offered at €90,000 as a traspaso might cost €500,000 or more freehold, since the price includes a commercial property in a coastal market. In exchange you pay no rent, cannot be priced out by reviews, can mortgage the asset and gain multiple exit routes.

Can the landlord block a traspaso?

It depends on the lease. Many contracts require the landlord’s consent to an assignment, and Spanish lease rules and many contracts give the landlord rights on transfer – commonly a rent increase or, under some regimes, a share of the transfer fee. This is exactly why the lease must be reviewed clause by clause before you commit; a broker will also often negotiate updated terms with the landlord as part of the deal.

Which is better for a first-time buyer – traspaso or freehold?

Most first-time buyers start with a traspaso: the capital requirement is far lower, the payback from trading is faster, and you can prove the concept before committing property-level money. Freehold suits buyers with larger capital, longer horizons or an investment focus. In every case, judge the quality of the business and the lease before the structure.

Thinking about buying or selling a restaurant in Spain?

Not sure whether a traspaso or a freehold suits your budget and plans? Restaurant Broker Spain lists both across the Costa del Sol, Tenerife and southern Spain – and our team, with hands-on hospitality experience, will talk you through the lease, the numbers and the risks before you commit. Call +34 633 164 936 or email info@restaurantbrokerspain.com for honest, no-obligation advice.