The high price of housing in Spain and the difficulties faced by young people when purchasing their first property are causing more and more parents and grandparents to consider the option of donating their home to their descendants. A legal act by which settle the amounts related to Inheritance Tax and Personal Income Taxas well as municipal capital gains.
However, and as explained on the Tax Agency’s own website, there is a case in which owners who are going to donate their habitual residence are exempt from paying Personal Income Tax (IRPF): people over 65 years old. Something that is included in the twenty-third additional provision of the Personal Income Tax Law and 41 bis of the Regulation.
Conditions for exemption from paying personal income tax for donations
In this case, the Treasury establishes that “the capital gains derived from the transfer by people over 65 years of age of the habitual residence are exempt.” A measure that can also be applied in the event that, instead of a donation, they are going to transmit bare ownership and retain the lifetime usufruct of said property. However, for this It is necessary to meet a series of requirements.
Specifically, this exemption can only be applied in the event that the donated property is the habitual residencethat is, you have resided there for at least three continuous years. Although it can also be carried out in those whose owner has died or there are circumstances that require the change of address before the established minimum period.
Likewise, the Treasury establishes that the donee must live in the home “effectively and permanently” for at least twelve months from the acquisition. In these cases, the owners will be exempt from paying the personal income tax related to the donation. However, as lawyer David Jiménez recalls, on some occasions this type of legal act They are not the most recommended.
Difference between donation and bare ownership
It is important to note that when a donation is made, the previous owners they lose the right to reside at home. Therefore, in the event that a conflict occurs, they will not be able to reverse the legal act and must consider the home lost. Due to this, what the lawyer recommends is to transfer bare ownership and reserve the lifetime usufruct of the property.
Bare ownership grants ownership of the property, so whoever receives it becomes the owner of the property. However, if the previous owner decides to reserve the usufruct for life, he or she will maintain the right to use and enjoy the home for the rest of his or her life. This means that their descendants They will not be able to prevent him from entering the home or residing there..
Likewise, as lawyer Sheila Galiano Gómez recalls, “just because they donate something to you doesn’t mean they can’t take it from you.” Well, if bare ownership has been transferred and according to the provisions of article 648 of the Civil Code, the donation can be revoked in the event that a crime is committed against the donor, his honor or his assets. Therefore, before carrying out this type of legal act, it is best to go to a specialized lawyer for advice.