Donating your Property

A lot of the Spanish used to donate their property in order to escape inheritance tax; however, the government cottoned on to this and put up donation tax in line with sales and inheritance tax. Donating a house in Spain then became, for many years, one of the most expensive ways of transferring a property

All of this changed in 2015 when due to a European resolution Spain was obliged to apply the same fiscal advantages to residents and non-residents of the EU meaning that tax benefits could be enjoyed by all.

  • Spanish succession and gift tax or Impuesto sobre Sucesiones y Donaciones (ISD) seems like a good option to many at the moment, particularly when you can benefit from certain tax advantages in the Valencian region, however, this could all change in the near future due to the consequences of Brexit.
  • Following Brexit this new advantage may be removed and the payment of donation tax for non-residents could, once more, mean a considerable drain on inheritors’ resources. With this in mind, some people are taking the decision now to gift their property and avoid excessive donation and inheritance tax in the future.
  • When inheriting, the relationship between the deceased and the inheritor (the degree of kinship) is very important as there are reductions to the tax base for close relatives; the same applies in the case of inheritance as well, in both cases the recipient is liable for any taxes payable, not the estate.
  • Natural born children who receive a property from their parents are eligible for 100,000€ being transferred tax free, as long as the grantee does not have a pre-existing net worth of 600,000 euros or more in Spain. There is no allowance for spouses and grandparents can do a donation to their grand-children, but only when both of the grand­children´s parents are not alive.

How do I donate my property?

  • To donate a property the grantee and the receiver have to attend the notary in order to sign a deed of Donación de bienes (donation of goods) the receiver has to sign that they accept the gift and then the deeds are registered at the land registry.

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