Consultation about The cheapest way to transfer properties between spouses.
Dear lawyer,
My husband and I have an apartment in Spain, Costa Blanca. We are not tax residents, and we want to put it my name only. I have been told that with the change in the inheritance and gift tax laws, the Valencian Tax Law will apply to us, and therefore the cheapest way would be as a donation or gift in my favor. Is this true ?
Answer.
Dear reader, thank you for your enquiry.
The rules to determine the applicable tax law for donations, gifts and successions in Spain have indeed changed. So, even though you are not resident in Spain, if the property is in Costa Blanca (Valencia), the Valencian tax Law will apply to you. This is good, as it is generally much more advantageous than national or state tax rules.
Law 13/1997 of the Valencian Government’s rules, in its Article 10 Bis, concerning reductions in donations and gifts, foresaw some tax reductions: a reduction of € 100,000 in donations in favor of descendants (children and grandchildren). Also in favor of ascendants (parents and grandparents).
But unfortunately the Valencian law does not foresee any relevant tax benefit on the tax payable when the donation is made between spouses, (there are important benefits in inheritance between spouses). Therefore, whilst it is true that the Valencian law will apply to you, despite not being resident tax, in your case as spouses, the gift tax would still be high.
Division of the common property
In your case, if the Spanish property is registered at the land registry in yours and your husband’s names, your husband could sell it to you, or even better, you could agree a division of the common property (or proindiviso), where you could be awarded the whole property, compensating your husband for his half.
The advantage of this transaction (which legally has no consideration as a sale), is that it is fiscally very advantageous, only incurring tax stamp duty. Which in Valencia region is 1.5% of the total value of the property.
It is very important before making any transfer of a property, to get the correct legal and tax advice, about the different ways to do it, because there may be a very significant tax savings. If you have any questions regarding 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
Hi Carlos, I have two properties in Spain costa blanca , my wife and I recently divorced and I was awarded the properties in Spain and she got the family home here in Ireland , I know need to put both properties into my sole name , my question is will this attract tax ?
Good evening,
Thank you for your email.
It would be taxes to be paid to the transfer in Spain, depending on the matrimonial regime and also, depending on how the court decision is granted and worded.
If the marriage regimen is equivalent to the separation of assets regime, it is possible that the land registry in Spain, understand that the divorce court decision, does not represent a real division of the matrimonial community, so, normally will ask for taxes to be paid.
Normally in these, we could present the transfer in a way that we will pay Stamp Duty, normally 1-1,5%, rather than a normal transfer tax of normally 10% ( The % depends on the areas of Spain).
Please send us the divorce court decision by email, to the email info@white-baos.com and we will confirm if we can assist you.
Post Brexit is it possible to transfer a property in Andalusia (Costa de Almeria) that has been in my husband’s name for 30 years to mine as part of a divorce settlement without having to pay Plusvalia? I currently don’t have an NIE so would have to apply for one. What other transfer taxes would be triggered? Approx value of property is Euros 200,000.
Good morning,
Yes, if the divorce agreement or court order is done ( worded) properly the answer is YES, the property could be transferred.
Depending on the understanding of the taxman it could be no taxes at all ( if it is considered the marriage regimen as GANANCIALES or joint assets regimen). Or, if it is considered as separation of assets regimen, it could be asked to be paid AJD (Stamp Duty) normally, depending on the areas of Spain about 1-2% on the half transfer.
So wording of the divorce agreement or court decision; and the matrimonial regimen is really important.
If you want, we can contact us to info@white-baos.com, and we will assist you.
Best regards,
Hello, circa 1993 my wife and myself purchase a villa jointly in the region of Andalucia 50/50, circa 1996 we separated and my wife returned to the UK while i stayed at the villa in Spain, my wife ( now ex-wife ) has never returned to Spain and i pay her NRT.
In 2019 we devoiced and i later remarried.
I get on well with my ex-wife and still pay her a monthly allowance.
But i am getting old ( 77 ) and the villa is too big for us and i want to downsize, my ex-wife who is 2 years younger than me would agree to any arrangement to rid herself from any connection with the villa with me paying all fees/taxes etc. She would not ask for any reward for disposing of her 50%.
Getting her 50% would make the purchase of any downside property easier ( it will not be jointly with my new wife ) and save me approx 900€ a year in NRT.
What would be the cheapest way of achieving this arrangement please ?
Kind regards
Michael
Thank you for your message.
There are different ways to transfer the property.
Probably in your case, the best ways could be:
1.-Division of the common ownership, so you can acquire her rights, by paying Stamp Duty, normally about 1 or 1.5%, on her half. Rather than Transfer Tax, which amount is about 8-10% depending where the property is located.
2.-Other possibility could be to be sold the property by both of you, and after the sale, her to pay you, so there is not need to transfer from her to you, before the property be sold to a third party.
In any case, we can study your case more in detail. If you want us to assist you, please contact us:
.-Email: info@white-baos.com
Tel. 0034 966 426 185
Best regards,
Hi Carlos
I currently own a property in Galicia ( paid for) snd wonder what would be the best way to sell it to my spouse. Can I “ gift it” to him? It would literally mean just a change of ownership. We are not divorcing and still married but wish to buy another property in UK.
Thanks
Helen
Thank you for your message.
The answer depends:
1.- On the circumstances of the transaction. That means, if it will be a gift or not, and if your husband will pay for it or not.
2.-Also, depends on the value of the property.
Gift tax and transfer tax depend on each Regional Area of Spain (Comunidad Autonoma), in Galicia it could be more convenient to make a gift to a husband than to sell to it, depending on the value of the property.
In any case, if you want, we at White Baos Lawyers we can assist you on the whole process.
Best regards,
I am definetely interested as we are planning to make an equity transfer of one of our property in Spain in the sole name of one person. Please contact me.
Thank you for your message. We are already in contact with you by email.
If you want, you could contact us in our email info@white-baos.com or at the telephone 0034 966 426 185, and book an appoitment to speak with one of your expert lawyers.