Property law Spain Tenerife to avoid inheritance by drastic tax redemption.

Property law Spain has changed on January 01.2008.

I have just received news about 2 new laws from my tax advisor in Spain. Tenerife is Spain.

Text was written in German which I have translated. literally.

A similar text in German may be seen on my tax consultant's home page.

Therefore, Property investment Tenerife becomes even more interesting for saving money for loved ones.

You may, of course, check out this new law with a solicitor or your own tax adviser.

A relevant news alert was published in the Media.

Several new laws apply to all Spanish autonomous regions such as all Canary Islands including Tenerife as far as inheritance tax redemption as well as donation tax redemption is concerned.

The redemption is 99.9 % and is stipulated as follows.

The relevant entry/law in Spanish under 'Ley 14/2007 and 27.12.2007 de Presupuestos Generales de la Comunidad Autonoma de Canarias para 2008 as well as Resoluci�n de 28. Enero 2008 de la Administraci�n Tributaria Canaria, Gobierno de Canarias para la correcta Gestion'.

Spanish Inheritance tax for Tenerife :

The property law Spain and Tenerife redemption regarding inheritance tax applies when the diseased had his/her main residence on the Canary Islands and, when he died after 01.January 2008.

This proof must be presented at the Receiver of Revenue by tax declarations of the last 5 years. Those must very clearly show that the diseased had declared his world wealth at the Receiver of Revenue on the Canary Islands.

Inheritors who will benefit by this are :

husbands or wives, children, adopted children,

grand children or grand-grand children

Names of cohabits called 'Parejas de Hecho' in Spain who are persons living together without wedlock will be accepted when they are accordingly registered.

The same Spanish inheritance tax redemption by the new property law Spain autonomous comes into effect

when both partners' names,
even when not married,
figure already in title deeds which may mean
that both are equal owners of a real estate property.

The party or person who may enjoy inheritance tax redemption must not be a resident on Canary Islands or Tenerife.

Nothing is changing for tax payers who are not residents when it comes to inheritance tax. Their tax tarifs remain the same as before which may be calculated for the individual tax payer by a good tax consultant (gestor) in Spain.

Property law Spain/Tenerife donation laws Alert:

This new law is for resident as well as for not-resident tax payers owning property on Canary Islands.

The tax redemption for Spanish donation taxes is always 99.9% when the beneficiaries are spouses, children, grand children, grand parents etc. not withstanding their residence where they pay tax.

This law is only for real estate, fonds, jewelery, cars etc. except for people who are tax paying residents on the Canary Islands.

What does this new property law autonomous for Tenerife and the Canary Islands mean for the numerous foreign property owners who are not resident but, want to avoid inheritance tax for their inheritors, now?

The answer to avoid inheritance tax by the new property law Spain by donations is:

They may donate their real estate to their spouses or children while they are still alive.

Doing so the owners of real estate will keep the right by usufruct (uso fructo) to use their property while alive but, giving it as 'donation'where a tax applies which will be 0,1% . (This is called nuda propriedad in Spanish).

In the case of death the 'usufruct' will become void by the certificate of death in which case a minimal administration fee will apply depending on age of diseased.

Urgent update:
Despite the new property law Spain the autonomous government is now saying that the text of the law has been slightly misunderstood as far as the rights of non residents are concerned. This is what I was told in writing by my tax adviser/accountant, by email recently.

A clear final decision has not been taken. Obviously lawyers are fighting over interpretation of legal text.

Please, wait for the final outcome of this new law unclarity.

property investment Tenerife becomes more interesting with the new property law Spain.

By the way, looking at property law Spain, I wonder why nothing has been really done to protect timeshare property better by law because, after all it's quite used in Europe without much property fraud occurring.

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Please, return to residential property in Tenerife where you will find more property related links listed such as reverse mortgages, avoiding foreclosure, houseflipping and its Tenerife laws. A holiday in Tenerife.

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