changing the name of the owner on a spanish property

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This topic contains 8 replies, has 4 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 10 months ago.

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  • #54627
    Profile photo of Anonymous
    Anonymous
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    my dad is wanting to change the name of his property in Spain from his name to my sisters and my name, he has just told me that this will cost around €3000.

    i am sure this cant be right

    can anyone help on this one or give me any direction of who to talk to to find out what we have to do??

    thanks
    emma
    ❓ ❓ ❓ ❓

  • #89057
    Profile photo of Anonymous
    Anonymous
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    Depends on the declared value of the property. Transfer tax, land registry fees, notary fees, lawyers fees…allow about 10% of the property value, same as if you were buying. If your father is using a lawyer, he should ask them for a breakdown of the 3k€.

  • #89059
    Profile photo of Anonymous
    Anonymous
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    Emma, The price is important as Hillybilly stated. I would be very surprised if it will less than €3000. Welcome to Spain.

    If & when you see your solicitors, please inquire if there will be a potential liability for capital gains tax.

  • #89128
    Profile photo of Anonymous
    Anonymous
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    Hi Emma,

    Its not that easy. Yes it can be done and might cost 3000 euros but the Spanish taxman can declare it as a gift to you and charge gift tax of up to 81%.

    Im assuming that as your dad is getting older he is thinking that if the property is put into your names there wont be anything to do in the future when he not around and I am assuming you are not residents. Forgive me if I am wrong on this part.

    To give you a recent example. I sold a house to a man who bought and paid for it in his own name. He has since got married and wanted to add his new wife to the deeds so that if he dies it would be in her name. But the problem is she either has to pay transfer tax of the 50% of the property she has just been “given” which was 10500 euros or the govenrment could declare she was gifted that part and charge a tax of up to 81% of the part she is given.

    He has tried to find a solution without paying the taxes as we all would and has used to lawyers to make sure he is doing it correctly. As it stand now he has left it and will take a chance that at some time in the future the Spanish laws could change in his favour.

    So yes it can be done but how the Spanish legal system will judge your father “giving away” his house to avoid future taxes can be a minefield and it can resurface several years later and come back and bite you. Even if the papers are signed over to you in can be years before some government oddjob gets round to taking a look at them. And with so little property transactions now they have plenty of time to study and lots of reason to try and get in every euro they can.

    Bernie

  • #89130
    Profile photo of Anonymous
    Anonymous
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    blawes1. I agree with your comments. However where I disagree is that in future there could change of taxation.

    Spanish Government, like other P.I.G.s, countries, will never change their mentality on the unjust basis of taxation. This mentality is strifling their economies.

  • #89134
    Profile photo of Anonymous
    Anonymous
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    Hi Shakeel,

    The part that they are hoping to change is if the EU to bring into line the taxation of resident and non resident property owners in wills and property matters.

    Bernie

  • #89135
    Profile photo of Anonymous
    Anonymous
    Participant

    Bernie,
    It seams that you have done some research on the subject. Are you aware that this is taking place & what ever pace or it is just wishful thinking on your part ?

  • #89148
    Profile photo of Anonymous
    Anonymous
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    Hi Shakeel,

    Its been an ongoing dilemna for my client. The Spanish lawyer he used did mention that there were hopes that in time the Spanish are going to be brought into line by the EU one way or another on the way wills are handled for foreigners. It seems that there will be a “human rights” issue for the wife in that she could lose the property if she cant pay the tax but wouldnt be paying the tax (maybe minimal amount) if she was resident. The basic Spanish law as Im guessing you know is that in general terms non resident wills are supposed to be dealt with in the country of residence, according to Spanish law. Although the English law then bounces it back by saying if you own property abroad then the laws of that country apply.

    The lawyer was suggesting that if the Spanish still insist of treating residents and non residents different in this area then the EU will impose that the law of the home country will apply regarding taxes. In this case the property would pass to the wife as it does in the UK.

    The other problem he had was that even if he put his wife onto the deeds and paid any taxes that were due, if she died before him he would have to pay taxes on the part he now inherits from her, even though he bought it in his own name in the first place!

    Lets hope it all gets sorted, however as we know these things can take a very long time in Spain

    Bernard

  • #89151
    Profile photo of Anonymous
    Anonymous
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    Thanks Bernie
    “The basic Spanish law as I’m guessing you know is that in general terms non resident wills are supposed to be dealt with in the country of residence”

    That is my understanding and to some degree it makes sense. As his/her commercial/emotional/personal/family interest, would be in the Country of residence.

    “Although the English law then bounces it back by saying if you own property abroad then the laws of that country apply “

    I presume that would be in so far as the legal treatment & taxation is concerned. This is distinct to the execution of the Will and such a complex area that I have not come across anybody who could assure me

    This , I know is the case. As it happened that I was with my lawyer friend last week, whose client had land in Uganda, She is UK domiciled & recently became widow. The friend suggested that he should look for a lawyer in Uganda on the basis that you suggested above.

    As, you said these things take time, but lets not forget its the tortoise who won the race. I am right behind the tortoise.

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