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I’m going to buy an apartment near my daughters and grandchildren. Because of my age they don’t give me a mortgage, is it viable to buy it between the four of us? I would contribute the down payment and a little more and they would pay the mortgage. Would there be a problem with the Treasury?
The concept of co-ownership It is defined in article 392 of the Civil Code: “there is a community when the ownership of a thing or a right belongs proindiviso to several people”.
Currently, access to mortgage financing can present significant obstacles for elderly people who, despite having savingsface the reluctance of banking entities.
In this context, the purchase of a property under co-ownership with family members emerges as an ingenious and legally sound solution. Although the structure is legally viablethe main focus of attention should be placed on your tax implicationstaking into account a priori two taxes: the inheritance and gift tax (ISD) and the property transfer tax (ITP).
Regarding the ISD, it should be noted that the Tax Administration monitors with special attention to operations where there is a discrepancy between the capital contributed and the percentage of ownership acquired.
If the person who makes the largest initial outlay purchases a ownership fee lower than what would correspond to its contribution, the Treasury may interpret that the surplus is a donation in favor of the other co-owners. A disguised donation qualification could lead to a complementary settlement with the corresponding interests and penalties.
Regarding the ITP, it applies to It is a second-hand sale. Each of the co-owners will be liable for the tax and must lliquidate it in proportion to its percentage of acquisition. Self-assessment of this tax using Form 600 will dispel any doubts for tax purposes.
The safest strategy is to ensure a direct correspondence between financial contributions of each party (including notary, registry, agency expenses…) and the ownership percentages that are reflected in the public deed of sale, in order to reflect them in the deed of sale.
*Álvaro Fernández Baertlawyer at Lean Abogados.
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