Step-by-step: donation of a Property in Spain by a UK Citizen Resident in the UK
Understanding What a Donation Means in Spain
Under Spanish law, a donation (donación) is a voluntary and gratuitous transfer of ownership from one person (the donor) to another (the donee).
In the case of real estate, the donation:
• Must be formalized by a Spanish notary in a public deed (escritura pública).
• Must be registered in the Land Registry (Registro de la Propiedad).
• Generates tax liabilities for both the donor and the donee.
UK residents are subject to Non-Resident Taxation rules (IRNR).
Step One: Preparation Before the Donation
A) Check Property Ownership and Debts.
We request a Nota Simple (Land Registry extract) to confirm:
o The donor’s ownership.
o Whether there are mortgages, liens, or encumbrances.
We verify that:
o IBI (property tax), community fees, and utilities are all paid.
o The cadastral reference number (referencia catastral) is up to date.
B) Decide the Type of Donation
There are two main options:
Full donation (donación plena) → Ownership and use rights are both transferred.
Donation with retained usufruct (donación con reserva de usufructo) → The donor gives the property but keeps the right to live in it or use it for life.
The second option is commonly used for inheritance planning.
C) Identify the Parties and Obtain Spanish Identity Numbers
Both donor and donee must have:
• A valid passport.
• A Spanish NIE (Número de Identificación de Extranjero).
• Proof of address and tax residence certificate from HMRC.
D) Power of Attorney
If the donor, the done or both live in the UK, it is often more practical to grant a Power of Attorney to a Spanish lawyer or representative. This document must be signed before a UK notary, apostilled (Hague Apostille), and officially translated into Spanish.
Step Two: Drafting and Signing the Notarial Deed
All donations of real estate must be made before a Spanish notary. The escritura pública de donación must include:
Identification of both parties.
- Description of the property (taken from the title deed and cadastre).
- The declared value of the property: normally the cadastral reference value or higher (market value).
- Statement that the transfer is gratuitous (no money exchanged).
- Acceptance by the done
The signing takes place before a Notary, who will check the donor and donee’s identification documents, and that all legal requirements are met. If the donor is not present, the Power of Attorney can be used by the representative to sign this deed.
Step Three: Taxes Triggered by the Donation
When a property is donated, three different taxes may apply:
A. Gift Tax (Impuesto sobre Sucesiones y Donaciones, ISD)
Who pays: The donee (the person receiving the gift).
• Tax base: The market value (or valor de referencia) of the property at the time of donation.
• Jurisdiction: The Autonomous Community where the property is located (Andalusia, Valencia, Catalonia, etc.).
• Filing deadline: Within 30 working days after the donation deed is signed.
If the donee is also not a Spanish resident, the tax must be filed through Spanish State’s Tax Office, however, regional benefits can still be applied.
Regional benefits:
Even non-EU residents (like UK citizens post-Brexit) can apply regional tax rules thanks to EU Court decisions (C-127/12). For example:
• In Andalusia, donations between parents and children or spouses are almost fully exempt up to €1,000,000.
B. Municipal Tax on Land Value Increase (Plusvalía Municipal)
Who pays: The donor (person giving the property).
• This is a local tax payable to the Ayuntamiento (Town Hall).
• It taxes the increase in land value since the property was acquired.
• Calculated based on:
- The years of ownership (up to 20 years).
- The cadastral land value.
- The price of purchase and sale
The donor must file and pay within 30 days after the donation.
If the land value hasn’t increased, the taxpayer can request a Plusvalía exemption (the 2021 reform allows for that).
C. Capital Gains Tax for the Donor (Impuesto sobre la Renta de no Residentes, IRNR)
Even though the donor receives no money, the Spanish Tax Agency (AEAT) considers that the property’s transfer constitutes a capital gain.
Taxable gain = (Market value at donation) − (Original purchase price + eligible costs)
The applicable rate is 19% of this taxable gain. The tax must be submitted through Modelo 210 within 3 months after the donation deed is signed.
No exemptions apply for non-residents (main residence, reinvestment, etc.).
Step Four: Registration in the Land Registry
Once taxes are paid, the donee must:
1 Submit to the Registro de la Propiedad:
• Original notarial deed of donation.
• Proof of tax payments (ISD, Plusvalía, CGT).
• Copy of ID and NIE.
2. The registrar checks compliance and updates the ownership
.
After registration a new Nota Simple will show the donee as the legal owner
Special Legal and Fiscal Notes
Valuation: Since 2022, Spain applies the “valor de referencia catastral” as the minimum taxable value.
If the declared value is lower, the Tax Agency will automatically adjust it upward for tax purposes.
Timing
• Entire process typically takes 4 to 8 weeks, depending on:
• Whether a Power of Attorney is used.
• How quickly the Land Registry processes the change
If you have any questions, feel free to contact us by email, phone, or schedule a free Teams meeting.
Connect with us at +34 674 326 758
or mail us : info@inheritancespain.co.uk
