Property ownership question
#1
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Thread Starter
Joined: Jul 2009
Posts: 23
Property ownership question
Hi its been a while since my last post but I appear to be going around in circles on this one so any advise would be much appreciated.
Over the past 4 years I have been building a house on some family land owned by my grandmother. The project had all the correct permissions, licence to build etc etc. Now the property is finished (and im living in it) I am keen to get it formally registered and start paying the local council tax etc.
The first step I am told is that for it to be registered in my name I have to own the house and the land. My grandmother is happy to give / sell the land to me for a nominal sum however I have come to understand that its not as simple as this, the land / and the house will be valued and there could be some form of tax liability.
There is also the option of just inheriting the land and house however I am worried about the tax implications here as well. I have paid for the house just not the land so paying inheritance tax on the value of the house as well will be quite hard to swallow.
Any advise or guidance on what would be the simplest / most tax efficient way forward would be much appreciated.
Many thanks
Over the past 4 years I have been building a house on some family land owned by my grandmother. The project had all the correct permissions, licence to build etc etc. Now the property is finished (and im living in it) I am keen to get it formally registered and start paying the local council tax etc.
The first step I am told is that for it to be registered in my name I have to own the house and the land. My grandmother is happy to give / sell the land to me for a nominal sum however I have come to understand that its not as simple as this, the land / and the house will be valued and there could be some form of tax liability.
There is also the option of just inheriting the land and house however I am worried about the tax implications here as well. I have paid for the house just not the land so paying inheritance tax on the value of the house as well will be quite hard to swallow.
Any advise or guidance on what would be the simplest / most tax efficient way forward would be much appreciated.
Many thanks
#2
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: Property ownership question
Death and taxes.
Yes, the council will appraise the house at whatever value they feel is appropriate, and tax you on that value. Inheritance tax I believe is higher, so inheriting it may not be the best way.
I believe there are some ways to avoid inheritance tax if you don't sell it after inheritance.
Get an Gestor/accountant's advice.
Yes, the council will appraise the house at whatever value they feel is appropriate, and tax you on that value. Inheritance tax I believe is higher, so inheriting it may not be the best way.
I believe there are some ways to avoid inheritance tax if you don't sell it after inheritance.
Get an Gestor/accountant's advice.
#3
Re: Property ownership question
If she gives it to then it will be subject to gift tax which is payable within 6 months and the tax rates are the same as Inheritance Tax.
Selling for a nominal sum doesn't help as the tax people will put their own valuation on it and tax accordingly.
However the land itself may have quite a low value so the tax could be low or even zero depending on the specific allowances, if any, in the region.
Selling for a nominal sum doesn't help as the tax people will put their own valuation on it and tax accordingly.
However the land itself may have quite a low value so the tax could be low or even zero depending on the specific allowances, if any, in the region.
#4
Just Joined
Thread Starter
Joined: Jul 2009
Posts: 23
Re: Property ownership question
If she gives it to then it will be subject to gift tax which is payable within 6 months and the tax rates are the same as Inheritance Tax.
Selling for a nominal sum doesn't help as the tax people will put their own valuation on it and tax accordingly.
However the land itself may have quite a low value so the tax could be low or even zero depending on the specific allowances, if any, in the region.
Selling for a nominal sum doesn't help as the tax people will put their own valuation on it and tax accordingly.
However the land itself may have quite a low value so the tax could be low or even zero depending on the specific allowances, if any, in the region.
#5
Re: Property ownership question
I would talk to a local gestor about it.
#6
Re: Property ownership question
You need to get this sorted ASAP, as, if anything should happen to your grandmother, and I hope it doesn't, then Spanish inheritance law will take over and you may find the land divided into ownership by all her surviving relatives.
#7
Re: Property ownership question
If she is British then if she has a Spanish will then Spanish succession law will not apply.
#8
Re: Property ownership question
So, I am British, I have a Spanish will - are you saying that Spanish succession tax does NOT apply to me? Why?
#9
Re: Property ownership question
I didn't mention tax just the succession law which, if Spanish, dictates who you can leave your assets to.
#10
Re: Property ownership question
Ah, missed that subtlety!
So, as I was born in England, I can decide who to leave my estate to even though I only have a Spanish will?
So, as I was born in England, I can decide who to leave my estate to even though I only have a Spanish will?
#11
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Joined: Aug 2009
Location: Costa Blanca
Posts: 3,143
Re: Property ownership question
Probably a good time to mention the new EU law of wills which Spain has signed up to.
The new European Regulation No. 650/2012, which is now in force, relates to the contesting and challenging of Spanish Wills granted by British citizens resident in Spain.
You can now legally opt how to make your will and not be governed by Spanish succession laws. For more talk to your local solicitor - exisiting wills needed to be updated to allow for this provision.
The new European Regulation No. 650/2012, which is now in force, relates to the contesting and challenging of Spanish Wills granted by British citizens resident in Spain.
You can now legally opt how to make your will and not be governed by Spanish succession laws. For more talk to your local solicitor - exisiting wills needed to be updated to allow for this provision.
#12
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Joined: Aug 2006
Location: Velez-Malaga
Posts: 4,919
Re: Property ownership question
Yes - my Spanish will already stipulates that I wish my estate to be dealt with according to the testamentary laws of my own country so I assume it will not need to be changed to reflect the new directive referred to in this thread. I do have an English will as well, though.
#13
Re: Property ownership question
Yes - my Spanish will already stipulates that I wish my estate to be dealt with according to the testamentary laws of my own country so I assume it will not need to be changed to reflect the new directive referred to in this thread. I do have an English will as well, though.
#14
Forum Regular
Joined: May 2011
Posts: 135
Re: Property ownership question
May I ask a question;
My husband and I made a Spanish will about 13 years ago and it stated that our property belonged to both of us, so if anything happened to either we would be okay. If we both departed, the property was to be given to a UK charity. We have since sold that villa and recently purchased another one.
Do we need to update it? I hope that makes sense!
My husband and I made a Spanish will about 13 years ago and it stated that our property belonged to both of us, so if anything happened to either we would be okay. If we both departed, the property was to be given to a UK charity. We have since sold that villa and recently purchased another one.
Do we need to update it? I hope that makes sense!
#15
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Joined: Aug 2009
Location: Costa Blanca
Posts: 3,143
Re: Property ownership question
I would say 'yes' to be on the safe side and you can incorporate your new rights under the revised law.