altering property ownership

Hi,

My wife and I bought an apartment in joint names with our son in law who initially raised 33% on mortgage as his share of purchase price. Within a short time ( approx. 1 year) he was unable to meet the commitment and we took over responsibility for the mortgage which we have since fully paid off. His name however remains on the escritura.

Our son in law does not want any further responsibility regarding the apartment (we pay all bills ,taxes etc.) , he would be happy to have his name removed from the escritura and is happy and willing to sign any document,  power of attorney, etc. to transfer full ownership to us. We are retired and don't want to sell the property as we now can spend more time there.

Is there a simple way of achieving this.?  We are a close family and the property will go to the(his) children , as written in our Spanish wills , in due course as was his intention when agreeing to buy in the first place.

Also Would there be any tax implications?

Any help/advice would be greatly appreciated

I think if he removed his name it would be considered he had 'gifted' his share to you and and there would be a donation tax due on this gift.

http://www.eyeonspain.com/forums/posts-long-7826.aspx

See this thread.

Regards, Poppyseed

Thanks Poppyseed

I think you're probably right on the taxation. We'd be best perhaps to leave as is unless /untill we decide to sell which would of course sort it out.

The way things are going in our region (Estepona) , with huge increases in costs -(eg. valor catastral up from 33,213 to 192,111) , forthcoming rises in water and energy prices and generally significantly higher shopping expense compared with England, we'd probably be better selling anyway and then renting . Rents for long term are now at bargain levels as many seek to let to pay their mortgages and there are literally hundreds to choose from along the coast .

Once again thanks and kind regards

Jonniereb

Jonniereb:

You may make  your son in Law tranquile just by signing a private agreement, which will no be subject to taxation.

Best wishes,

Maria

Hi,

a private agreement would not enable access to land registry and he would still appear on the deeds, so that when you thought of selling the property you would need him to sign the deeds...it is therefore better to sign a deed so that he transferred his 33% of ownership to you. Such  transfer of the 33% would be subject to 7% transfer tax, along with notary and registry costs, or to the tax on gifts, .... without values it is not possible to calculate the costs.

good luck

Am

Fairway Lawyers

 Hello Diego Echevarria, Good to see you around!

My answer below is obviously an attempt to offer to Jonniereb a pre-solution till they finally sell the house. They do not want o pay any taxes now, as far as it is legally possible, and that is the private contract is only legal measure they can take  which will remove his son from some arising liabilities attached to house ownership ( apart of course pf those of the lagal traffic of the property which requires the Land Registry Puiblicity0).

Think of damages, claims... attached to ownership as ownership will be effectively transmitted once the private purchase contract is signed. He can always oppose his lack of ownership with the existence of the private purchase.

Thank you  very much to AM Fairway Lawyers , and again to Maria de Castro ,  for your interest and helpful replies.

We will want to sell the property in the next 3-5 years--if not before--assuming the market does eventually improve!! and it would be best to take our son in law out of the equation before sale to prevent any problems later.

Our son in law does not want any financial benefit from the property and would  willingly sign any deed(s) at any time to transfer his legal 33% to us. Equally he does not want any liabilities either.

Assuming a value of say Euros150,000 now ( value before the current slump was circa Euros 200,000) , is it possible to estimate the likely costs now of transferring his interest to us (my wife and I ) , including 7% transfer tax, Legal, Notary, & Registry costs etc.? You also refer to a tax on gifts- is this an alternative method and if so would there be any financial difference ?

With the drop in values we might be able to justify an even lower value now as only really "bargain " priced property is likely to sell in the current market--this perhaps could be to our advantage ?

Depending on overall cost we would be willing to have the necessary work carried out this year on our behalf.

JN (jonniereb)