Donating real estate in the Balearic Islands: Now cheaper and easier
Introduction: Welcome to our informative article on the latest developments in the donation of houses and apartments in the Balearic Islands. From January 2023, new regulations will come into force that will allow you to give away real estate on more favorable terms. However, there are a few important points to bear in mind in order to benefit from the discounts.
Only two things on earth are certain: death and taxes. Benjamin Franklin
The conditions at a glance
Gifts within the family
In order to benefit from the advantages of gifting real estate, you must give it to your direct descendants, i.e. your sons or daughters. The property itself may not exceed a value of EUR 270,151.20 and must be used by the recipient as a primary residence for at least three years.
Exclusion of further real estate ownership
Another important condition for the benefits is that the recipient must not own any other property. This is to ensure that the gift really serves as support for the purchase of your first home.
Prohibition on selling the donated property
The gifted property must not be sold in order not to lose the gift tax benefits. This ensures that the gift has a long-term effect and helps the recipient to fulfill their dream of owning their own home.
Income limits
The recipient may not exceed an annual income of 33,000 euros. If you file a joint tax return with your spouse, the income limit is 52,800 euros. However, it is not yet known on what basis the income will be calculated.
Reduction of gift tax
As soon as all requirements are met, the gift tax is reduced by 60 percent. In general, the tax rate for gifts from parents to their children in the Balearic Islands is 7 percent.
In certain cases, the tax can even be reduced by 95 percent. This applies if the son or daughter receiving the gift is under the age of 36 or has a physical disability of at least 65 percent or a mental disability of at least 33 percent. Children from large families (família numerosa, three children or more) or single parents can also benefit from this high reduction.
Budget negotiations in the Balearic Islands
The reduction of the gift tax is part of the current budget negotiations in the Balearic Islands, which will be held in parliament until Thursday (22.12.). The conservative People’s Party (PP) put forward this proposal, which was unanimously accepted by the left-wing government.
Conclusion
The new regulations on the donation of real estate in the Balearic Islands open up a wide range of possibilities for you to pass on your property to your descendants on more favorable terms. However, please note the conditions and requirements in order to benefit from the gift tax concessions.
Take advantage of this unique opportunity to fulfill your children’s dream of owning their own home and create a solid financial basis for their future.
