Question:
Dear lawyer,
I’m English, I have a house in Spain between Javea and Denia, valued about 195,000 €. I want to transfer this property to my 2 sons who live in the UK. I have been told that the best way is to gift it to them. Is that correct? What would be the tax to be paid?
Dear reader, thank you for your legal advice request.
As per the recent changes, it is true that the donation and gift is often the most tax efficient way to transfer a property in Spain to our family. Mainly because now the benefits of inheritance and gift tax, previously reserved for tax residents in Spain now apply to citizen’s tax resident in the European Union or the European Economic Area also.
But it is not always the case, as certain information that must be obtained and studied prior to making a gift, to see the real consequences of it.
1. Determine the value of the property to be donated. Donations and Gift tax to be paid depends on the value of the property. It is essential to calculate what is known as the minimum tax value, i.e. the minimum value that the tax authorities will consider acceptable.
2. Gift / donation Tax: As your children are living in a country of the European Union, they will benefit from the tax reductions foreseen in the Gift Tax Law of the Valencian Region, where the property is. These benefits are: a reduction of – 100,000€ (for each of them) on the value of asset donated, and a discount of -75% on the Gift Tax to be paid. In your case, as each child will receive half of the house, worth about 97,500€, there would not be Gift or Donations Tax to be paid.
3. Municipal Plusvalia: You must pay this local tax to the corresponding Town Hall, the amount of which will depend on the land value of the property donated, how long you have owned the property, etc.
4. Capital Gains Tax: This may be the most problematic tax. You should know that when there is a donation, the person who donates, although they are not receiving any money in return, must still pay capital gains tax, calculated by the difference between the purchase price (the price for which you bought, plus expenses) and the transfer value (the value given to the property in the donation – gift). Although it is possible that you should not pay this tax, if you are over 65 and you donate your habitual residency, etc.
Therefore, it is possible that a donation is the best way to transfer your property to your children, but you should make a study of the rest of tax payable, and the legal implications before making a decision .
If you have any questions on this matter, please contact us
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
Spanish Law firm solicitor attorney barrister.
Alicante, Denia, Costa Blanca Marina Alta
White & Baos 2015 – All rights reserved
My daughter has a NIE but my son does not and cannot get over here. Can I donate to him without one??
Thank you for your message. Yes, he need to have a NIE if you want to donate or gift to him a property in Spain. He could apply for the NIE for free in the Spanish Embassy-Consulate in your country. Or if it is not possible, and he cannot come to Spain, if needed, we could apply for the NIE on his behalf. You could contract our office or send us an email to: info@white-baos.com.
Regards,
We are considering gifting our apartment in Catalonia to our son. Is this a difficult process and what taxes would we have to pay? The apartment has fallen in value, so there is no capital gain. We both have a NIE.
Good morning,
The process is not difficult at all.
For the correct transfer of the property by means of a gift, a gift deed must be signed.
Also, in Calalonia are important tax benefits for the gifts from parents to children. So depending on the value of the property, it may be no Gift Tax to be paid.
Also, if the parents are co-owners of the property, each one could gift their part of the property. So, the children will be able to benefit for the tax reduction for the gift of each parent.
Normally, there is not Gift Tax to be paid for the first 100.000€ ( for each parent).
If you want, our law firm could assist you in the transfer and gift, in order to register the property in the name of your son. If so, please send us an email to info@white-baos.com, and we will confirm you the next steps to be taken.
If you cannot come to Spain to sign, it could be done remotely, with the appropriate Power.
We hope that this message is of help.
Best regards,
Hello
I got an apartment in guardamar and I cannot get there because of covid and this brexit another added problem I have never made a will and I need to gift this to my son he has no NiE so I would have to instruct you to do this the apartment was €89,000 20 years ago it is probably worth the same what would the fee be for you to do this thank you
Good morning,
Yes, if you want to gift the property to your son, it is possible. And if the value of the apartment is under 100.000€ no gift tax will be paid.
We will also inform you how you can get the NIE, or if you want, we can assist you to get it.
We will send you an email with further information.
Regards
I want to gift my house in Spain Valencia state to my 2 daughters the house was bought in 2003 for 113,000 euro’s and worth about the same now. Can one daughter buy the other one’s share at a later date and can that be written in the gift with a legal requirement for this to happen within a stated time scale
In the Valencian Region the children will not pay for gift for the first 100.000€, so you could gift the property to them without any gift tax.
Also, if the value on the gift are the same than the acquisition value when you bought it would be no Capital Gains Tax.
IN relation to the possibility to buy for one the other , yes it is possible.
I am not sure the reason how to do it that way. If the idea is that one of them become sole owner, it may be better ways to do it.
In any case, if you want our assistance, you could contact us at +34 966-426-185 or info@white-baos.com
Best regards,
I want to gift my house in Spain Valencia state to my 2 daughters the house was bought in 2003 for 113,000 euro’s and worth about the same now. Can one daughter buy the other one’s share at a later date and an that be written in the gift with a legal requirement for this to happen within a stated time scale I am UK citizen and non resident
In the Valencian Region the children will not pay for gift for the first 100.000€, so you could gift the property to them without any gift tax.
Also, if the value on the gift are the same than the acquisition value when you bought it would be no Capital Gains Tax.
IN relation to the possibility to buy for one the other , yes it is possible.
I am not sure the reason how to do it that way. If the idea is that one of them become sole owner, it may be better ways to do it.
In any case, if you want our assistance, you could contact us at +34 966-426-185 or info@white-baos.com
Best regards,
Hi , would you kindly advise me regarding the best way to avoid property tax on puchasing a property in spain. I am in the final completion stage of selling my husband and i joint house in SPAIN, I intend to buy another property in a different region so that my young widowed daughter and grandchildren can still enjoy their holidays in SPAIN, My husband is nearly eighty and not a well man so he does not expect to visit SPAIN again.however we do have a joint bank account ,but i intended to purchase another property in her name only as my child. which i understand avoids tax up to 100euro.I know this seems a complicated scenario but i would appreciate your valuable advice on this matter. Many thanks ZERYL,
Thank you for your message.
To minimise the taxes, it must be studied your case in full.
This depends on different factors: values of the properties, if the property is your main home or not, place of residency, etc.
To study the best way to proceed we could study your case and give you the necessary advice.
You could contact us directly at info@white-baos.com we will check your documents, etc. and let you know.
Best regards,
My brother and I wish to transfer/gift our share of a villa we inherited from our father to our sister. We currently own a third each. What is the best way to do this and costing the least money in taxes please?
Thank you for your message.
Normally if you are co-owner, the best way to transfer the property to her it would be a division of the common ownership, but depending on the area, value of the property, etc, it could be a gift.
If you want you can confirm the circumstances of the your case and we will study the best way proceed.
You can send us with the full information to info@white-baos.com or call us to +34 966 426 185.
We look forward to hearing from you,
The escritura got lost of our property in Parcent/Alicante.
Is it possible for you to ask for a 2nd original copy for us?
How much would that cost? After we get an answer from you we have some more questions.
Thank you. Looking forward to your answer.
Kind regards,
C B
Yes, it is possible to get another copy of the escritura or deed for your Spanish property.
If you do not have a copy or information about the property ,notary, etc. could be checked at the land registry in front of which notary the deed was signed, etc.
We will answer you by email.
Best regards,
is it lawful to give usfructo for life to a non family member first, then second, will the property equally to the two children in equal parts.
my mother recently had this in her will and we were shocked that this other person was named Primero, in her will.
Thank you.
Hello Sir Baos,
Thanks for the usefull insights your website brings.
I have a little question regarding a property in Valencia.
Here is some context : My grand-father acquired it back in the 1970’s, but it has since then been considered to be located on spanish marine space (Armada Española, on the coast line). The properties have since then be allowed to stay but are not allowed to be sold from what we learned by the neighbors and local authorities.
My question : is the capital gain tax still due in such specific case when succession occurs ? Can an unsellable property still be valued ? Shouldn’t it just be considered 0 value because of this ?
Gracias in advance
Thank you for your email.
We will need to check exactly the situation of the property.
IN any case, in the case of a succession there is not Capital Gains Tax (CGT) to be paid.
It coudl be CGT in a Gift in Spain, but no in an inheritance, unless the property is sold after the inheritance.
In any case, if you want, you could send us the documents for your property to info@white-baos.com
Regards,
What are the implications of donating a Spanish property in the Valencian region in the uk tax system . Are any taxes to be paid , eg CGT, IN THE UK .?
My friend who is 80 was tricked by her daughter and her daughters partner into putting their name on the deeds of her Spanish house. She paid for it in full but now only has the right to live there until she dies. It was never explained to her at the signing over that this was happening. She is now stuck in Spain, doesn’t even own the house. She’s paying service charges even though she doesn’t technically own the house and paying for all the repairs. How can this happen? What recourse is there to help her?
Thank you for your message.
We will need to check the deeds where the property was transfer, also any other evidence about the “trick”, like correspondence, etc. Also, we will need to check who paid for the property If your friend paid for it, may have an actions against the owners.
You could contact us at: info@white-baos.com or 0034 966 426 185
I want to give my house in Spain to my daughter how can I do this without paying tax
hello, I recently bought a second house in Spain, I am resident in Spain. the cost was €71k one year ago. I’ve now decided I have no use for this house. I’d like to ‘gift’ it to my son who is a Resident of the UK. Can you please explain the process and anticipated costs. the current house value is the same as I paid for it last year, it’s only one-bedroomed. Thank-you..
Hello, my father donated a property to me in Malaga about 8 years ago and now he is Ill and will not be around much longer. We have now learned that he had another child and confirmed it by DNA in 2018. She is now trying to go after all property that he still owns and that was donated to my other siblings and I. Can she claim the property’s he donated to us as part of her inheritance?
Thank you for your email.
That will depends on the applicable law, wording of the Wil, etc.
Please contact us to 0034 966 426 185 or info@white-baos.com, we should do a consultation appointment to review the situation.
Regards
Good afternoon
My mum and her husband bought a house in the Murcia region over 25 years ago for around £30,000. They would now like to gift it to me. It is worth around 90,000 to 100,000 euros. What I would like to know is, what are the likely costs of various charges and taxes (national, regional and local) that will be incurred in the transfer of this property to me as a gift? Many thanks.
Regarding the gift, it must be considered:
.-Normally the gift of a property to a relative, when the beneficiary is a relative, it could be a good solution, although, a part of the gift tax, there is Capital Gains to be paid by the donor. If the beneficiaries of the gift are the children of the donor, they will be considered as part of the Tax Group II and depending on the region or area of Spain, will have interesting gift tax benefit, and it is possible that there is not gift tax to be paid.
But, the donor will need to pay Capital Gains Tax (CGT), for the difference between the price and costs paid when she bought it and the value of the property that it will be stated on the Gift Deed. * We need to calculate this.
Also, Plusvalia tax could be due to be paid.
In order to determine the CGT to be paid and also the determiner the Minimum Tax Value of the Property to be stated on the Gift deed (reference value), we will need to study:
• Copy of the Deed of the property that you want to transfer and confirm who are the owners.
• Copy of the LOCAL RATES ( also known as council tax, or SUMA bill or IBI, etc).
With all this information we will be able to advice the best way to proceed.
You can send them to info@white-baos.com