Do people over 65 have advantages when donating their home?

Donate a property It means giving it to another person in life without any financial transaction. It is a frequent legal act among older people who decide, for different reasons, to give their apartment to a child or grandchild, instead of reflecting this wish in a will, as a future inheritance.

Even if there is no money involved, the donation implies the change of ownership of the property of a home, that produces an increase in the patrimony of the recipient and also generates the corresponding Donations Tax.

What to value when donating your house

In the first place, it is important to weigh your decision, fully understanding that with this act you will cease to be the owner of your home. It may be interesting to assess complementary actions to the donation. For example, there is the possibility of donating your house but establishing a usufruct right that allows you to continue living in it even if you are no longer the legal owner.

donation of a home

If you are determined, probably what you are most interested in knowing is what procedures and expenses involves donating your house. There are three points that you should keep in mind:

  • Donations Tax. The powers regarding this tax are transferred to the different autonomous communities and its amount varies considerably from one to another. It is calculated taking into account the value of the home, from which the possible charges or debts (mortgages) will have to be subtracted. The deductions and bonuses established by each community will be applied to this figure. In the case of Madrid (@CommunityMadrid), for example, if the person who receives the donation, responsible for paying the tax is a child, grandchild, spouse or direct ascendants (parents, grandparents) the bonus reaches 99%. As a general rule, the tax must be paid and presented within 30 business days of the donation.
  • Capital gain. It is the municipal tax that generates the very fact of transmitting a real estate, starting from its cadastral value and taking into account the number of years that have elapsed from the acquisition of the house to the moment of donation. Also in this case, it is the donee (who receives it) who is responsible for paying it.
  • Personal income tax. As pointed out by the Tax Agency (@Haciendagob), who makes the donation You must declare the possible increase in equity that has been generated during the years in which it was the owner, when the value granted by the corresponding autonomous community is higher than the acquisition value (something that happens as a general rule). In this sense, being 65 years old is an advantage, since it will not be considered any capital gain. as long as the house you donate is your habitual residence.

Finally, remember that to be entitled to any type of bonus or reduction in Donation Tax, the donation must be made and reflected in a public deed.