A report on Thursday on Britain's Daily Mail website alleged that the 62-year-old Russian president is planting a vineyard to produce his own exclusive wines on the grounds of a multi-million-euro mansion outside Marbella.
The Daily Mail cited its own sources and a report in an English-language news website in Spain, Olive Press.
"No, this is not the case, it's an unoriginal joke," Putin's spokesman Dmitry Peskov told Echo of Moscow popular radio station. "This doesn't correspond to reality."
Peskov added that the reports discredited a "respectable publication".
"Unfortunately journalists lately have not been showing their best side...and do not demonstrate high professional qualities when they write," Peskov said.
Putin, who last year declared an income of just over $100,000 (at the exchange rate of the time) and property limited to a 77-square-metre flat (828 feet), is regularly reported to have luxury property and a massive hidden fortune, claims angrily denied by the Kremlin.
In 2011, a businessman alleged that a lavish holiday complex was being built for Putin's private use on the Black Sea coast, although government officials denied this.
Western sanctions against Russia over its role in Ukraine have targeted officials and businessmen from Putin's inner circle, including billionaire energy trader Gennady Timchenko, who is ranked by Forbes as Russia's sixth richest businessman.