So far, what we know most is the inheritance and not the donation of housing. In this post, we are going to learn what the donation of your house in life means , what donations of houses from parents to children mean, and what the cost of the donation of housing to your children means.
At present, there is a large number of citizens who consider the possibility of transmitting their heritage, or part of it, to their heirs, in other words, a donation is proposed. It is true that the inheritance is less expensive than the donation, but it would be good to also analyze the living donation in case we are interested in that option.
The donation, fiscally speaking, can be made at any time, there is no need for a concrete age of the donee or there is a limit on the amount donated, or goods that can be donated, but it is necessary to proceed to study each case in an individualized way since there are times when it is much more favorable to carry out the transmission via mortis-causa, that is, to wait for the death of the deceased and to pay the Tax on Inheritances and Donations, but in the form of Inheritance.
Like all legal business, two parties intervene, one that is the figure of the donor and another that is the figure of the donee.
Who pays the donation?
The donation is paid by the donee, that is, the one that receives the donated, which is the one that must pay the Donations and Inheritance Tax.
How much does it cost the person who receives it (donee)?
As a consequence of the donation, the grantee (who receives the donated floor) will be the person who will have to face the payment of the Inheritance and Donations Tax (in the form of Donations).
As you may have read or heard, the Donation Tax is a tax that, depending on the Autonomous Community, can be very varied. With general character, in the donations, it is of application the norm of the Autonomous Community where the donee resides.
However, in the case of the apartment (and the rest of the properties), the rule that applies is that of the Autonomous Community where the floor that is donated is located.
In order to calculate the tax payable, the kinship relationship between the donor and the donee is essential, as well as the pre-existing patrimony of the person who receives the donation. The amount to be paid increases the further away the kinship relationship is and the greater the patrimony of the person who receives the donation.
In some cases, not usual, could get to apply a rate of 81.6% in the case of Andalusia (in cases where there is no kinship and the patrimony of the recipient is more than 4 million euros) or that the tax payment is 99% reduced in case of first degree of kinship (parents to children, for example) in the Community of Madrid.
In addition, once the donated floor has been acquired, the new owner will have to face other taxes, such as, for example, the Real Property Tax (IBI).
And to the one who donates, how much does it cost?
Many times the focus is on the taxes that the person receiving the floor has to pay because he has to face a tax payment. However, we forget that whoever donates, in many cases, also has to pay.
From the perspective of the donor, two taxes must be taken into account: the Personal Income Tax (IRPF) and the Tax on the Increase in the Value of Urban Land (also known as "Municipal Capital Gain").
And the question that arises is why do I have to pay these taxes if I am not selling the apartment?
The answer lies in the fact that the Personal Income Tax regulations treat donations as if they were a sale, that is, that the donation can generate a profit or a loss in the donor's assets based on the value of the apartment.
Given the case, two situations could occur:
Profit derived from the donation: if as a consequence of the difference between the acquisition value and the real value at the time of the donation again occurs (that is, the actual real value is higher than the acquisition value), this gain will be taxed in the IRPF of the donor at the rates of 21% -23% depending on the amount of the generated profit.
Loss derived from the donation: if what is generated is a loss (because the actual real value is lower than the acquisition value) this loss will not be deductible in the IRPF.
Although this rule may seem "asymmetric" - the tax gain and the loss cannot be deducted - it is designed to avoid that, in cases in which someone has obtained capital gains in an exercise, it generates losses "artificially" through donations to compensate profits, thus avoiding taxation.
Nor can we lose sight of the Tax on the Increase in the Value of Urban Land, also known as municipal surplus value, which, although it is currently in a situation of uncertainty, because we are waiting for the approval of the rule that modifies the current, the vast majority of municipalities continue to liquidate.
This tax has a local nature, so, within margins set at the state level, it is each City Council that establishes the applicable tax. The tax is calculated on the cadastral value of the land (only of the land, without taking into account the construction) to which a coefficient is applied based on the years in which the donor has had the floor and subsequently a rate is applied that, in No case, it can be higher than 30%.
That is to say, it will pay more municipal capital to gain the greater the seniority of the floor owned by the donor. In case the floor is less than one year old (in the property of the donor), it will not be necessary to pay the tax.
In conclusion: if you are thinking of donating or receiving a floor by donation, check these expenses to avoid unexpected surprises.
What are the procedures to donate or make the change in the ownership of a property?
The procedures are similar to those followed for a sale:
- You must get a simple note of the property. You can ask for it at the property registry. This document shows who is the real owner of the home, and whether or not it is free of charges.
- Obtain a copy of the last receipt of the IBI paid.
- A certificate signed by the secretary of the community of owners, attesting that the home is up to date with payment.
- Appear before a notary public to prepare a public deed of donation, which implies the payment of notarial proceedings or Documented Legal Acts (AJD).
- You must pay the tax with the 651 templates, which can be easily processed in person or online.
- Register the transfer of the property in the Land Registry.
What compensates more to donate or leave in inheritance?
Again we go back to the bonuses, it will depend on the autonomous community in which we have to pay. In Madrid, donating and leaving an inheritance is very matched by the reduction of 99% for donations between parents and children (2 nd and 3 rd grade siblings bonus of 15%, uncles and nephews carnal 10% bonus).
Depending on the Autonomous Community, it may be more profitable to leave it as an inheritance.
If what is donated is housing, it must be taken into account that there is an additional tax that must be paid and that the donor (who donates the house) must pay in the IRPF for the patrimonial gain that has been obtained, that is, the difference between the price I pay for the house and the price or value to which you donate it.
For tax purposes, the Treasury does not care if the donor has not deposited that money because of the increase in the value of the house or not. For the Treasury is a capital gain for which you pay taxes when making the income statement.