I bought a property in Spain in 2005 and for personal reasons put it in my parents names.  I am now in a position to take back ownership but have found the cost quite high.  I was told that if I do my recidencia I will not have to pay as much tax when I transfer it into my name.  Is this the case and if so what percentage would the tax liability be?  I am currently living in the UK so would this be a problem, are the governments likely to find out?

Karen

kareng227 - 17 April 2008 02:31 PM

I bought a property in Spain in 2005 and for personal reasons put it in my parents names.  I am now in a position to take back ownership but have found the cost quite high.  I was told that if I do my recidencia I will not have to pay as much tax when I transfer it into my name.  Is this the case and if so what percentage would the tax liability be?  I am currently living in the UK so would this be a problem, are the governments likely to find out?

Karen

I think you need to take good professional advice (in Spain) on this - if you go through the normal sales process yes you will be hit with taxes. There is an option to gift the property but as non residents this may not be an option for you. Have you considered waiting and taking it back as an inheritance? Also laws may vary slightly (and tax amounts) depending on which region the house is in. I really advise you to get good advice and please post again with the result.

The property is on the Costa Blanca South.  I asked my solicitor if we could gift the property and they said it would still be subject to the same tax as inheritence, you have to declare the true value and can not sell at a much reduced rate otherwise the government fine you.  Also as I have put it in joint names surely it will be subject to inheritance tax twice over.  Do you know how much difference there is in the tax percentances for residents and non residents please? 
Karen

Karen,

OK glad you have been taking advice and doing research - there have been many postings on IHT here (some by me) do a search through this site and you should find them. I would also recommend acquiring:

You and the Law in Spain - David Searl
(make sure you get the latest 2007/8 Edition)

many thanks

karen