Donation of real estate on Tenerife
A donation of real estate on Tenerife? Are you considering to donate your property in Spain, especially in the Canary Islands, for example to your children? This is a very good idea that will save you thousands of euros!
You have worked, saved and invested. You have found a new development or an existing apartment or house that meets all your needs and do you want to leave something behind for your spouse or child(ren) but you are afraid that they will have to pay a lot of money to the government? A donation of real estate on Tenerife to your loved ones is an excellent solution to stop the high costs that are normally associated with this! More about what we can do for you in order to help you with your donation of a property, you can read here.
But what is a donation?
A donation is an agreement whereby a donor irrevocably and free of charge renounces to movable or immovable property in favour of a beneficiary who accepts this property explicitely. In other words: you give your property to your children without them paying you anything in return. Donations of real estate must always be made by notarial deed and these deeds are registered and the beneficiary (your children, for example) must pay a right of donation to the government.
Usufruct or bare ownership?
With the donation, you can donate the entire property as well as only the bare ownership. If you only donate the bare ownership, and retain the usufruct for life, then your children will become owners but cannot do anything with the property without your permission. After all, you retain the rights and obligations as long as you have the usufruct. In concrete terms, this means that you keep the taxes and revenues with you, but when you die, your children won’t have any (inheritance) costs. After all, the property is already registered in their name, so there is no question of an inheritance, and certainly not of taxes on it!
What are the costs of a donation?
The donation will have to be made official by a deed passed before the notary. You pay a right of donation, the notary’s fees and various costs (stamps, researches, mortgage, etc.). The amount of the right of donation varies according to the value of the assets transferred and the degree of kinship between donor and beneficiary.
The right of donation is calculated on the Canary Islands based on the following parameters:
- on the gross value of the property received by the beneficiary
- according to a flat rate (for EU residents) currently of 0.10%.
- at a different rate depending on the degree of kinship between the donor and the beneficiary (the further the degree of kinship, the higher the rate)