What if you are married under the system of clear separation of goods Are you thinking of buying a property in Spain?
In Spain, there is a presumption that a married purchaser, regardless of the applicable matrimonial property regime, makes the purchase under the community of property regime. If you are married under the regime of separation of property, you must therefore prove that this matrimonial property regime applies. This can be done, for example, by means of a certified translation of your marriage contract, bearing an apostille. Alternatively, your partner may declare that the purchase is being financed entirely from their own funds.
If only one of the two partners purchases the property and, provided the necessary formalities are complied with, the title is registered solely in that person’s name, then that person is also the sole owner. If you wish to acquire the property jointly, the percentage of ownership attributable to each partner must be expressly stated.
Consequently, the purchase of property in Spain by a married couple married under the regime of separate property entails a number of additional formalities.
Here you will find more information about the options for buying property in Spain as a couple.
Protecting each other better
This often leads to a desire to own the Spanish property jointly after all and to provide each other with the greatest possible protection for the future.
A common solution in Belgium is the Added Internal Common Fund (TIGV). But how exactly does this work when it comes to Spanish property? And does Spanish law even recognise this Belgian system? In this blog, we explain how you can safely place your dream home in Spain within a TIGV.
The problem with ‘complete separation of assets’
If you are married under the regime of separate property, there are, in principle, only two sets of assets: yours and your partner’s. There are no joint assets.
If you buy a flat in Alicante or a villa in Marbella together, you will own it as “joint tenants” (each holding, for example, 50%). The disadvantage of this is that you you cannot simply allocate assets to the surviving partner via your marriage contract. In the event of an undivided estate, half of the deceased’s estate passes directly into their estate, which can leave the surviving partner in a state of uncertainty in relation to other heirs (such as children from a previous relationship).
The solution: the TIGV
To resolve this, you can have a ‘Toegevoegd Intern Gemeenschappelijk Vermogen’ (TIGV) added to your marriage contract via a Belgian notary.
This is a separate trust fund, a kind of ‘limited community’ that you create within your regime of separation of property. For all your other assets and income, you remain married under the regime of separation of property, but you place specific assets – such as your Spanish property or an investment portfolio – into this new joint estate.
Why is this of interest to your property in Spain?
- Maximum protection for your partner: You can attach matrimonial benefits to this TIGV, such as a right of choice or a right of survival (known as the ‘surviving spouse’s right’). This allows the surviving partner, in the event of a death, to acquire full ownership of the Spanish property, without the children being able to lay claim to it immediately.
- Succession planning: It offers flexibility. Following the death of one spouse, the surviving spouse can choose whether to take full ownership of the Spanish property or to pass on a portion of it to the children, depending on which option is most tax-efficient at the time.
How does this work in practice in Spain?
It sounds like the perfect Belgian solution, but the property is, of course, in Spain. And Spanish property laws and registration rules apply there. You have two options:
Scenario 1: You are going to buy a new property in Spain
This is the easiest way. Before you go to the Spanish notary to sign the deed of sale (deed of sale) To sign this, you will need to amend your marriage contract in Belgium and set up the TIGV. When purchasing a property in Spain, the Confianz team will ensure that the Spanish deed correctly states that you are purchasing the property “for the joint estate in accordance with Belgian matrimonial property law”. The property is then immediately and correctly registered in the Spanish Land Registry (Registro de la Propiedad).
Scenario 2: You already own the property in Spain (Contribution)
Did one of the partners purchase the property on their own in the past, or do you already own it jointly on a 50/50 basis? In that case, you can to contribute in the TIGV. You do this initially by drawing up a deed with a Belgian notary. However, Please note: A mere change of ownership in Belgium is not enough! The change of ownership must also be notarised in Spain and entered in the Spanish land register.
If you contribute an existing Spanish property to a matrimonial community, the Spanish tax authorities may, in some regions, regard this as a transfer of property. As a result, you risk having to pay Spanish transfer tax (ITP or AJD), which can be substantial. The legislation and case law on this matter (the so-called contribution to the community of property) is complex and varies from one autonomous region to another. Guidance is crucial here to avoid unexpected tax bills.
3 Tips for a Smooth Process
- Work proactively: Are you planning to buy a property in Spain? Check your marriage contract before signing any reservation agreements. You can read more about the buying process here.
- Ensure that translations are accurate: The Spanish Land Registry requires certified translations of your Belgian marriage contract, bearing an apostille.
- Choose specialist support: Spanish notaries are not always familiar with the nuances of Belgian family law (such as the difference between a statutory regime and a TIGV). An expert who understands both legal systems is indispensable.
Conclusion
Transferring a Spanish property into a TIGV is an excellent way to protect your partner and carry out estate planning if you are married under the regime of separation of property. Although European law has made it easier to have Belgian marriage contracts recognised in Spain, Spanish registration and tax matters still require a bespoke approach.
Would you like to tailor your prenuptial agreement to your dream Spanish property? The specialists at Confianz We understand the link between Belgian family law and Spanish property law better than anyone. Contact us today for a personal consultation, so that you can enjoy your Spanish investment with complete peace of mind.
