Case Study – Transferring a Spanish Property to Your Children
Earlier today we had a customer asking about transferring their property to their two children now as a lifetime inheritance.
This is how we wrote to them for anyone considering the same issue in the Valencia region.
“I understand that you were speaking to Nicola earlier today about the costs involved in transferring a property in Spain from your joint names to that of your two sons as a donation, or early inheritance.
She mentioned that the property is in Orihuela Costa and is worth about 170,000€, I believe, market value.
We have had a number of people approach us in the last year to deal with donating their properties to their adult children, as the tax allowances in this Valencia region are currently very generous at 100,000€ tax-free per adult child.
Thus in this case, although it is calculated on tax value of the property, not market value, as long as the tax value is less than 200,000€, and you have two children, then there would be no donation tax to pay, only costs. Of course, we cannot get better than no tax, which is why it is a good time to transfer a Spanish property in this area to your children if you are thinking of it.
There will still be Notary fees, Land Registry costs, Solicitor fees, a town hall tax called plusvalía which is small and a few other minor things. We can calculate these for you if you could please scan and email us a copy of your deeds and your last SUMA (IBI) bill as this shows the cadastral value (from which we can calculate the tax value). We can give you the costs for free within a couple of days.
We would also need to know if your two sons have NIE numbers and if you would all come to Spain for completion or would need to do powers of attorney at home if we send you the draft?
This would allow our solicitor to do everything without you having to fly here to be at the Notary for completion.
Timewise, once someone decides to go ahead, we need to make sure everyone has NIES, calculate the costs, the clients pay 10 days before completion and the only thing that generally delays the process is getting the powers of attorney executed, as if done in another country they need sending away for a Hague Apostille for international use, whereas if done in Spain they are in the format already for Spanish use. So it can be from a few weeks to a couple of months at the most.”
If you are in the same situation, then please contact Amanda on firstname.lastname@example.org and she will be happy to arrange for the costs to be calculated for you. Taking action now could save your children a great deal of future inheritance tax.
Please contact Amanda if we can help regarding the above.