Now is the time to look at gifting a Property in Spain to Children.

single.php

Posted and filed under Property in Spain, Wills, Probate, Donation and Inheritance.

donation

Many will not be aware that a new government of the region of Valencia started ruling in the Autumn of last year and they suggested they are going to erase all the allowances for gifting and probates. This will mean a lot of people will pay considerably more inheritance or gifting tax in the future. We are trying to arrange as many donations as possible before the changes are made. Clients should be aware that although this costs in excess of 4,000€ it may (we can advise on particular circumstances) save them a great deal of money in the future.  Spanish Solutions can arrange donations all over Spain in any area and non-residents do not need to come to Spain to arrange this. 

Gifting a Property – Tax Free Allowances

Each child (children of the property owners but adults) gets a 100,000€ tax free allowance at the present time in the Valencia region. This generally means that a property can be passed onto the next generation with little or usually no inheritance tax. It is not possible to get better ever than no inheritance tax.

Recent Proposed Tax Changes


The government have been indicating that they are intending to reduce significantly or erase tax allowances in the Valencia region.

Thus it has led to a lot of people thinking we will pass on the property into our childrens’ names, with minimal expense. (There are still going to be notary fees, land registry fees, solicitor fees and some other small expenses but there will always be these costs, now with gift, or in the future with an inheritance. The difference is that we do not know how much inheritance tax you will pay in the future. However, almost certainly a lot more.

Gifting to my spouse


I am worried about something happening to me, can I gift to my spouse?There are no tax free allowances for gifts or donations between spouses in the Valencia region. For changes of ownership such as when a couple are divorcing or two business partners are going separate ways there is a method of division of property ownership whereby only stamp duty and expenses are paid. But this would not be the best route if you have children to pass the property on.

What Can Be Done now?

Currently, with everything on hold except essential matters, it is the best time to discuss matters and arrange paperwork. Then as soon as lockdown is lifted we can arrange powers of attorney for a gift to children, or as an alternative, Spanish Wills.

Bear in mind that someone passes away, if they have assets in Spain a probate will need to be done to be pass assets on, even to a spouse. It is not automatic. Also any inheritance tax has to be paid within six months. It is therefore best to contact a solicitor fairly quickly after a death. It is wise to make a Spanish Will as it saves hassle and expense. We are currently organising a waiting list for these to be signed.

As now is a good time in the Valencia region to consider donating a property to your adult children, we are happy to calculate the costs free of charge.

Please contact us if you would like to enquire about gifting a property in Spain to adult children or making a Spanish Will.

78 Comments

  • Cezary

    Hello! I am not a Spanish resident and I wonder if it is possible to use the 100k allowance to non-resident children. I would like to donate a fraction of my property, for example 2 x 33%, to my 2 children who are just 5 years old.

    • Amanda Thomas

      Good morning, Yes it is possible for non resident children. But both parents have to sign and there cannot be a mortgage, I will email you separately regarding this. Kind regards.

  • Bob

    What about gifting a UK property owned by a UK citizen who is tax resident in Spain to a UK resident family member? What spanish tax implication would arise?

    • Ian C.

      Hello Bob,

      Thank you for getting in touch with Spanish Solutions.
      Slowly but surely we are making our way back to normal.
      Please leave this with me, and we’ll ask our Spanish tax expert to get in touch with you via email later this week. It is a holiday in Murcia so many offices are closed, just what we need on top of the lockdown.

      Kind wishes,

      Ian

  • Mark Williams

    Hello, my mother is currently selling her spanish property (Valencia region) & intends to pass some of sale asset to me and my sister (we are all Spanish residents). Approximately €50,000 each. Will this be possible or should the property be passed to the children before sale? Thank you

    • Amanda Thomas

      Dear Mark, Whether the property shares or the actual cash is paid to her children, it is a donation. As such there will be taxes in Spain, at the moment each child has a 100,000€ tax free in the Valencia region, however this could change in the next few months. If a sale might take longer it could affect any taxes due on the money. With kind regards Amanda

  • Will Bridgman

    My parents have a large home in the Valen­cia re­gion, they are UK residents.
    They wish to pass the home to my sister totally as she uses the home a lot.
    The home was 450,000 euro in 2008, value now would be about the same.
    What would be the best way to do this transition.
    I would like to get this sorted now so it does not form part of their estate in the future.

    • Amanda Thomas

      Dear Will, Yes, we can assist with this, I am going to send you an email about a donation. It is absolutely the right time to do this, Kind regards Amanda

  • Michael Groves

    I have a property in the Valencia region purchased for €200k, and is now worth €400k. We are resident in UK.
    What is the best way to transfer to UK family, not blood line. Would it be best to gift, if so what would the tax be. Alternately, could you gift 10% per year for 10 years. Would this have any benefits?
    Finally, any way to transfer to UK company ?

    • Jane

      Hi Michael

      Our legal advisor is on holiday but will be in touch to discuss the process.

      Kind Regards

      Jane

    • Amanda Thomas

      Dear Michael, Maybe it would be best to email me directly to discuss this on sales@spanishsolutions.net but if the family are not direct blood line such as parents, children etc there are no tax allowances or very little, so it usually is very expensive. Purchase and sale also has high taxes. The best thing is is to send me deeds and suma scanned, and what you wish to do and we will devise the best and cheapest strategy. No we do not generally recommend a UK company. Kind regards Amanda

  • Andy

    I have 2 apartment I want to pass over to either my spouse or children, aged 10,6,4.
    What would be the best and least expensive?
    Or is it possible to pass it to both?
    Please do send me info regarding this.

    • Amanda Thomas

      Dear Andy, I have responded by email already to you, please have a look for it. (There is no tax free allowance for spouses in the Valencian area). It is possible to pass to the children but both parents must sign.Kind regards Amanda

  • jacqueline clark

    We have a property in Spain we are tax residents and would like to down size maybe to a bungalow will we have to pay capital gains tax and would it be expensive to sell and buy again. Thanks for your advice.

    • Jane

      Hi Jacqueline

      I have e mailed you directly with further information on your enquiry.

      Kind Regards

      Jane

  • Theresa

    Hello,

    My parents were going to sell their property in Spain (gran canaria) for 188.00k but took it off the market for us to purchase in the future when return to Spain from living in the UK. Because we are currently saving for the deposit, we wanted to look into the option of gifting in order to have the property sooner. My question is if my parents gifted the property could we remortgage the property to pay them out?

    • Amanda Thomas

      Dear Theresa, We can help with your parents gifting the property to you but if this transaction is conditional/reliant on obtaining a mortgagevto pay your parents after we probably could not assist. We are on the mainland and also at the moment Banks in Spain, it is very difficult to obtain mortgages as non residents, and they do not usually do remortgages. With kind regards, Amanda

  • Michelle Singh

    Hi Amanda,
    My husband has property in his name inherited from his Mum.
    The transfer feeds were completed in March 2020.
    My husband has cancer and has been given 6-12mths minimum . We are concerned that relatives may try to get this property therefore we wondered which was the best and cheapest way to transfer the property into my name now.
    We looked at :
    Gifting
    Putting it in my UK compnay name.

    The property is in Malaga -Benalmadena and was purchased for 90 000.
    We currently have it on sale for €200000 but due to Covid there are obvious delays.

    He has already made a Spanish Will.

    Any advise would be greatly appreciated right now.

    • Amanda Thomas

      Dear Michelle, Firstly, I am so sorry. Please can you send an email for the attention of Amanda with this information and let me know please your husband’s nationality and if you have adult children? Kind regards

  • denise

    Hi my mother’s property i spain and spannish resident but me im uk resident, whats best when is alive pass the property or after? Or gift? What do I have to pay? Tax etc.. on gift? Or after when she descent? And how much is for notary to do all tbis pls? Best way opinions pls? base howmuch will it be? I di have will that when she descend it goes to me. But how much tax do I have to pay? I Don’t want to sale house want to.keep it. hank u

    • Amanda Thomas

      Dear Denise, it depends on where the property is located the best advice. If you email us a copy of the deeds and the IBI/suma bill we can advise what we think is best. Passing property in Spain whether by inheritance or by gifting always costs several thousands though.

  • Eric Chennell

    Hi Amanda
    I`m thinking of selling my house in the UK so that i can buy a property in Spain within the
    next twelve months! as i want all my assets to go to my son so i thought that it might be
    a good idea to purchase the Spanish property in his name just to save on any hassle once
    i`ve died and then he could possibly rent it out for an income until he wants to sell it on,
    could you see any problems with that idea!

    • Amanda Thomas

      Dear Eric, No, it seems a good plan. You might need to run it past a UK accountant as the money is coming from the UK. Kind regards Amanda

  • Kat

    Hello my mother in law in UK wishes to give us a gift, we are spanish/valència residents and Uk citizens. Please can you tell me if she needs to pass on power of attorney to me to sign the Gift transaction here in Spain .

    • Amanda Thomas

      Dear Kat, Yes, to give a gift or donation, she has to be there in person or provide power of attorney, probably best to a solicitor to sign on her behalf. Kind regards

  • Enna

    the split of co assets in andalucia region to spouse, either by separation or gift, which has the least tax element for non spanish eu residents. urgent reply please

    • Amanda Thomas

      Dear Enna, we could not advise until we see a copy of the deeds and of the suma/IBI bill as recent as possible, then we can advise. Please email me these. Kind regards Amanda

  • Alan Raymond

    Hello , I am thinking of gifting my uk house to my daughter , I am not resident in spain , my daughter has residencia from 2015 when she lived in Madrid but spends less than 182 days in spain and works in London . What steps should we take to minimise CGT and Gift Tax ?

    • Jane

      Hi Alan

      We have a partner company who could assist you further with this. Please let me know if you would like me to pass your details for them to contact you.

      Kind Regards

      Jane

  • Jim

    I bought a property in the Valencia region wih my Father in law in 2002 we own 50% each. He is now 85. His share of the property would be less than €100k. Would he be able to gift his share to my sons, his grandsons who are both adults? Or would it need to go to his daughter, my wife to benefit from the allowance? We are all uk residents.

    • Amanda Thomas

      Dear Jim, He can gift his 50% to his grandsons yes and no one needs to come to Spain as it can be done with power of attorney. However the allowance of 100,000€ each child or grandchild the government are saying will be erased 1st January so this process needs doing as quickly as possible or it will be too late to take advantage of the allowance. Please send deeds and suma bill/IBI (with the catastral value on it) to us as soon as possible for us to quote the costs and explain the process. Kind regards.

  • Christine

    Is there a gift tax-free limit (under Spanish tax law) currently in Valencia for receipt of cash gifts from parents in the UK (UK citizens) to son over 21 (UK citizen, living in Valencia with Spanish residency but struggling financially in the current pandemic)?
    If so, is this best transferred in one lump sum, or as regular monthly tax free payments to a Spanish bank account? The limit for tax-free gifts in the UK is £3K, but this can be more if payments are regular and supporting a dependent relative I believe?

    • Jane

      Hi Christine

      I have spoken to our fiscal advisors who assume your son is not independent. As far as we are aware, there is no such limit in Spain. If you give it for free is a donation and you have to declare inheritance and donation tax, so the best way is a loan contract to be 100% sure, should the Tax Agency ask where the income came from.

      Kind Regards

      Jane

  • Andrew Lowe

    My parents (British citizens) will leave me their uk home in their will. I should inherit about £200,000. I am a uk citizen but a Spanish resident. Will I need to pay Spanish inheritance tax? Thanks

    • Amanda Thomas

      Dear Andrew, Possibly, depending on the tax free allowances of that region at the time, but quite likely. Being Spanish Resident (unless it is your home and you are over 65 will not avoid it), Kind regards

  • Jane Brack

    Hello, we are uk residents owning a holiday property near Cordoba costing 200,000euros 10 years ago. We have Spanish wills leaving the property to my husbands step-daughter, would it be best to add her and her husbands name to our deeds now or wait until she inherits it? What taxes would be due with each scenario? Thank you.

    • Amanda Thomas

      Dear Jane, This is Andalucia region and for inheritance and donation step children would be Group 3 in the priority order, which means they only get a very small tax free allowance for your husband’s 50% share and then multiplied by 1.5882. For your share, you are not related so tax would be very high and would be doubled. Same for her husband unfortunately. It may be cheaper to sell it to them if you wish to transfer ownership. In both cases, it is going to cost many thousands, so it is really the best time the family might want to do this. If you wished to find out the cheapest quote now we would need deeds and recent IBI bill showing the catastral value by email. Kind regards

  • Eve Dudley

    Hi . Can I live with my husband in my daughter house in soain with no tax implications. I’m thinking of selling my house in urelabd gifting my daughter tge money to buy a house in spain that I will live in with my husband till we die .. are tgere any complications with doing this for myself ir my daughter . House will be around 80000 with soanish taxes
    Much appreciated for a reply

    • Amanda Thomas

      Hi Eve, Regarding this question, if you are not a Spanish resident the tax implications for the gifting in Ireland needs to be checked there. Then for you and your husband to move to Spain you will need to look at becoming residents and the tax implications for this as Spanish residents pay tax on world-wide income. Kind regards

  • Sarah

    Hi could you email me re advice on selling my property and gifting it to my adult children. They are listed in my Spanish will. Thanks again

    • Amanda Thomas

      Dear Sarah, We are in touch by email now, with Kind regards, Amanda

  • Jamie

    Hi

    My Nan has started showing signs of early dementia and has always wanted to gift me her apartment in Tenerife and also left a will in Tenerife. My Grandad wants me to take ownership of it as there is alot going on at the minute for him. Can you email me ref how the best way to go about doing this and the taxes ill likely incur.

    Thanks

    • Amanda Thomas

      Dear Jamie,
      I will respond to you by email. With kind regards, Amanda

  • Julie Phillips

    Hi. A friend of mine is Spanish resident and has inherit the house from his wife. Someone said he can’t sell the house for 10 years. Is this the law.

    • Amanda Thomas

      Dear Julie, No, totally untrue. He can sell once the probate is completed (we can help) and the sale can be in process in the meantime. With kind regards Amanda

  • Hilary

    Hi Amanda, my daughter has inherited a third part of a small property in Southern Spain, she is sharing with her step siblings, she wishes to sell out, but will meet with opposition, can she force a sale? Or make the siblings buy her out? Or can she gift her part to another family member?
    Thanks for any advice, much appreciated.

    • Amanda Thomas

      Hi, In Spanish law there is no obligation for co-owners to continue to own a property if one does not want to. Yes, she can force the division of the co-ownership, through a Court process if they do not agree. It will not be particularly cheap but maybe with a lawyer involved it can be settled out of court. If you would like our help, please can you send me the deeds and IBI bill by enail, With kind regards Amanda

  • Martine Deprez

    Me, my daughter (12 years old) and my husband are residents in Gran Canaria.
    We want to give our shares to our daughter. We heard that we don’t need to pay taxes on shares. Is it like this?
    Kind regards,
    Martine Deprez

    • Amanda Thomas

      Dear Martine, The islands have quite special tax arrangements and we are on the mainland. I am afraid you need to contact a lawyer on Gran Canaria for this transaction. Kind regards Amanda

  • Claire Jensen

    My father has an apartment in manilva which is currently worth about 80000e. He is wanting to gift the property to myself but is currently living in Thailand. Unfortunately he has been unable to travel for 18 months due to covid and he hasn’t managed to get a POA yet. Is there anyway this can be done from Thailand? He is currently living in Phuket and is unable to travel to Bangkok due to local restrictions. Your advice is much appreciated.

    • Amanda Thomas

      Dear Claire, Your father has to do power of attorney, there is no other way. So this would have to be done wherever in Thailand is the right place to arrange this but I imagine it would be in Bangkok, I am afraid. It would need checking with the embassy there. Kind regards

  • Caroline

    Hi
    We have a property in Alicante we want to change the deeds and make our two two children the beneficiaries before we die – is the best solution gifting or paying capital gains tax to put it in their names (make them the legal owners) so they don’t pay inheritance tax in Spain (on our deaths) or in the U.K. we have Spanish residency but work and live permanent in the U.K. as we understand it, under Brexit legislation we can stay for 183 days without paying Spanish taxes on our U.K. income as it is already taxed at source (Paye). What is the best solution what’s involved and costs please?

    • Amanda Thomas

      Dear Caroline, The difference between gifting and inheritance is choosing the timing, as for children the costs and taxes are the same. At the moment, in Alicante the tax allowance for gifting and inheritance is still very good at 100,000€ tax free so it is a good time to gift. There is not a better way to put it in their names. Making a Will to them is important if not, but we do not know in the future what the tax allowances will be, only that they are likely to be much worse. I can calculate costs if you can scan and email me the deeds and a recent suma bill with the catastral value please. Thanks Amanda

  • Elizabeth Fisher

    Hello, We have a property in Andalucia, we are non resident, both my husband and i are joint owners, he is a Spanish national and i am British. Our son has Spanish nationality. We would like to gift him the property, what are the likely tax implications in our area?

    • Amanda Thomas

      Hi Elizabeth, I have already responded to your email, so you should have that already, Kind regards Amanda

  • Ms Packer

    Hi there. My mother has a property in Andalucia and I have read re the taxes and probate if something were to happen to her. If she gifts me and my brother the property via transfer of title deeds now, what are the tax implications and would this be the best thing to do rather than keeping the deed in her name if something were to happen? Would be good to know what the implications would be if something something were to happen to her and the property fell to us re taxation liability. Thank you

    • Amanda Thomas

      Good morning, Currently there is a bonficacíon or tax free allowance of 99% for children in Andalucía so it is a very good time to gift property to children as taxes would be so low, and there would be mostly only costs. The issue is timing, you don’t know in the future how taxes could change, but it is unlikely to be better than now for taxes in Spain for inheritance or donation. If you can email me the deeds and IBI bill showing tax value then I can calculate the costs and advise the process. With kind regards, Amanda

  • Roger Freeman

    My elderly parents have a small house in Menorca. They are UK resident. Is it possible for them to gift this house to two (of three) of their children, and if so what are the Spanish tax obligations. The house is wort about EUR250K-300K

    • Amanda Thomas

      Dear Roger, Good morning. I cannot see why not. Please send me sales@spanishsolutions.net a copy of the deeds and recent IBI bill scanned with catastral value and we will study and advise taxes, and process. Kind regards Amanda

  • Jeremy

    My wife a s I own 50% of a property in Spain with my parents. It’s worth less than €100,000. We would like to buy the 50% to become full owners (at 50% of the market value) but we find we would be subject to the same percentage fees (searches etc) from a Solicitor as when we purchased the property 10 years ago for a solicitor doing exactly as they did last time around. This seems to me to very excessive and very costly for a solicitor doing exactly as they did before when we already know the property is sound, no debt etc etc. Surely these costs can be avoided ? Is there another solution?

    • Amanda Thomas

      Dear Jeremy, Firstly, it is difficult to comment specifically as we do not know where the property is. But either you would be buying their 50% and them selling (incurring a great deal of costs) or you maybe able to receive your parent’s percentages as a gift (but not your wife) with lower taxes (depends on what region the property is located in and we would require deeds and suma/IBI to advise). But either way, it costs probably a minimum of 5,000€ for notary, land registry, legal fees, town hall tax, purchase or donation taxes and various other things. Any change of ownership of property in Spain always costs many thousands. I am afraid, that is unavoidable.

  • Jacqui

    My mother (UK citizen) died recently and ‘sold’ her property in Andalucia to my sister (UK citizen) at around 25% of its actual value. Previously my mother had always said all property would be split 50:50 between my sister and I when she died. At the time of her death she had virtually blind for a couple of years, so I suspect my sister had Lasting Power of Attorney. Was it legal for this property to be neatly shifted out of my mother’s estate just before her death (she was 97 so it was imminent).

    • Amanda Thomas

      Dear Jacqui, I am sorry to hear this. The transaction would have to have taken place through a Notary and the Notary must have been satisfied that there was a valid power of attorney by your mother to do this. It would be very difficult to dispute a transaction through a Notary, but all you could do is approach a lawyer local to the property in Andalucia but you would need proof that your mother was mentally incapable at the time of the transfer I feel to be able to contend it, and it would be difficult and expensive if the transaction is already completed, Kind regards

  • Vicki Knapp

    Hi Amanda
    My father owns 50% of 223acres of land and an old disused Finca with his friend in Moixent, he wants to gift his 50% to me, (oldest blood son) before he dies! The cadastral value is €1.350,000 as a whole. Will I have to pay taxes to transfer his 50% to me ?

    • Amanda Thomas

      Hi, I have sent you a message by email which I hope you receive. Kind regards, Amanda

  • Edith

    I like this and i would like to know more about it

    • Amanda Thomas

      Dear Edith, Please send us an email with your deeds, your property tax bill (IBI or suma) and how many children you have that you would like to gift the property to, and if there is a mortgage and we can calculate and explain, With kind regards Amanda

  • desmod kelly

    what is a good charity in spain to gift my property to.thanks

    • Amanda Thomas

      Dear Desmond, It is up to you, but all I can recommend is it should be a properly registered probably international one. Otherwise with probates with small er charities that are not correctly registered in Spain it can end up a nightmare, as often one person can be behind them and they can be taken over and change names. It is much more difficult for a charity in Spain to receive an inheritance than in other countries. Better to help them as much as possible while you are alive, With kind regards

  • Maddie.

    My husband and I live in a villa in the Valencia’s region.
    I own two thirds of the property and his share is one third.
    We both have children by our first marriages but no children together.
    Is it possible for me to will my 2 thirds to my children and he will his to his children.
    We have Spanish wills at the moment in which we willed to each other depending on who passed away first then naming all the children when we both passed away.
    I want to know to ensure my children inherit my share.

    • Amanda Thomas

      Dear Maddie, If you are British and make a Will choosing your national law there should be no problems. The problems arise when there are step children and no Wills made and you are Residents. The other good option could be to do a donation now to the children as you can still live in it and even have an usufruct. With kind regards Amanda

    • Amanda Thomas

      Dear Maddie, I believe we have already been in touch by email. Kind regards

  • James Ashmore

    We own a villa i the Valencian region worth approximately 400 thousand euros and would like to know what is the cost implications of gifting it to our daughter . We are all UK residents .

    • Amanda Thomas

      Dear James, I am going to contact you by email to explain and I will need certain documents to provide you with costs. With kind regards, Amanda

  • Sylvia Moore

    I believe we can make our Spanish wills choosing National Law which is English. We are British with Spanish residencia.
    My widowed partner wants to leave his house solely to me, we have lived together in Alicante for 14 years. His son doesn’t want to inherit and he is estranged from his daughter.
    He purchased the house by himself in 2004 at a price of 130,000€ but we think the value now is approximately 87,000€. Would he be able to gift the house to me? What would be the best solution regarding tax?
    Tia

    • Amanda Thomas

      Dear Sylvia, Unfortunately at the moment, in the Alicante (Valencia region) inheritance and donation (gifting) is very expensive for unrelated partners, in fact taxes would probably be higher than selling it to you. The best solution would be to marry and for you to inherit one day (as there is no gift allowance for spouses either), as at the moment there is 100,000€ tax free allowance for spouses and so there may be no inheritance tax. The only thing is that this allowance could change but it will almost certainly always be better for spouses than partners for a very long time. With kind regards,

  • Tes

    Hi. We are in the Malaga region and have joint ownership of a property. Not married. I want to transfer my half of the property to my 12 year old. Is this possible as she is not an adult. And if so what would be the best way to do this without incurring huge taxes. I am non resident but her father who owns half the house is tax resident and a pensioner. Thanks.

    • Amanda Thomas

      Dear Tesia, It is possible if both parents are in agreement and there is no mortgage. Please email us the deeds and IBI and her passport for us to study and advise, With kind regards, Amanda

Leave a Reply

Your email address will not be published. Required fields are marked *

*

*

*

Looking for a solution?

Feel free to get in touch with any enquiries and one of our friendly members of staff will get back to you as soon as possible.

Form loading.