The cheapest way to transfer properties in Spain between spouses.

The cheapest way to transfer properties between spouses.

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.

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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

4 thoughts on “The cheapest way to transfer properties in Spain between spouses.

  1. 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 ?

    1. 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.

  2. 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.

    1. 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,

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