Split purchase in Spain

Everyone is familiar with a split purchase. A split purchase occurs when parents and children buy a property together. The bare ownership is bought by the children. The usufruct is bought by the parents. This has two advantages. On the one hand, the parents can use or rent out the property. On the other hand, the children will not pay inheritance tax on that property later.

This article looks at the usefulness of a split purchase in Spain. We also study the differences between a split purchase in resale and new construction.

Read more about the split purchase with a company.

Split purchase in Spain on resale

Split purchase is also possible in Spain. The Spanish rules on bare ownership and usufruct are broadly no different from the Belgian rules. However, the valuation of usufruct is calculated differently than in Belgium. Usufruct in Spain is calculated as follows:

89 - the age of the youngest purchaser of the usufruct = percentage value of the usufruct, with a minimum of 10%.

An example. A couple together with their daughter buy a villa in Costa Calida at a price of 250,000 euros. The father is 54 and the mother is 53. 89 - 53 = 36. 36% * 250,000 = 90,000. The value of the usufruct in this case is 90,000 euros. The bare ownership is €160,000. Both parents and daughter pay registration fees on their respective shares (ITP). In the Comunidad Murcia, this is 8%.

No inheritance tax will later be paid on the usufruct in Spain. Although Spanish inheritance tax can be avoided via a split purchase, in case of the parents' death there will be registration fees be paid on the usufruct.

Note: The Spanish tax authorities may consider a split purchase as a gift. The bare owner will then demonstrate that he had sufficient funds at the time of purchase to finance the bare ownership. If he cannot prove this, he will gift tax and capital gains tax have to pay.

Split purchase in new construction

When buying a new build in Spain, the same principles apply. However, there is an important difference in terms of transaction tax.

In a repurchase, the usufructuary and bare owners pay (regional) registration duties on their share upon purchase.

In case of new construction, you will pay 10% VAT and a stamp duty instead of regional registration fees.

However, under Spanish VAT law, usufruct is exempt from VAT. The purchase of usufruct is therefore subject to registration duties. On the other hand, the purchase of bare ownership in new buildings is subject to VAT and stamp duty.

Using the previous example again, the parents pay 8% registration duty on the usufruct, i.e. 8% on 90,000 euros (7,200 euros). The children pay on the bare ownership of 160,000 euros 10% VAT (16,000 euros) and a stamp duty in Murcia of 2% (3,200 euros).

An important consequence of the VAT exemption on usufruct, is that it limits the promoter's VAT deduction. For this reason, promoters in Spain rarely agree to a split purchase on new builds.

Read more about the purchase cost of buying usufruct.

Effects in Belgium

In case the purchasers of the usufruct (the parents) are residents of Flanders, Brussels or Wallonia at the time of death, the Spanish property counts for Belgian inheritance tax. A split purchase in Spain is therefore mainly an interesting technique for inheritance planning in Belgium. The After all, Flemish inheritance tax has a progressive rate, making possessions in Spain ensure that you end up in a higher taxable bracket. The same applies to Brussels and Walloon inheritance tax.

Avoiding inheritance tax in Belgium

To avoid Flemish, Brussels or Walloon inheritance tax, a split purchase may provide relief. For example, the extinguishment of usufruct is not taxed in Flanders. It is therefore common for parents to finance the bare ownership of the children via a gift or donation.

There is a limitation, however. The law states that the bare owner must prove that there is no hidden favouritism.

A first way to rebut a covered favour is for the bare owner to prove that he had sufficient funds at the time of the split purchase. A loan is also sufficient for this purpose.

The second way is for the bare owner to show that there is no causal link between the funds received from the usufructuary and the split purchase.

Finally, the usufructuary - pursuant to the judgment of 12 June 2018 of the Council of State and the position of VLABEL - donate the bare ownership amount prior to the deed of purchase without having to pay gift tax in Flanders. This is on condition that you can prove the existence of the gift.

If you pre-finance the bare ownership via a gift, you can therefore avoid Flemish inheritance tax. But you must then prove that a donation took place. According to the federal administration (Brussels) - not competent for Flemish inheritance tax - the donation must be made before the signing of the compromise.

When the covered favour cannot be refuted, the consequences are severe. The property is then fully taxed as a bequest in inheritance tax.

What about Spain?

Spain taxes the extinction of usufruct on the basis of registration fees. Those rates are still lower than the highest bracket of Flemish inheritance tax.

Find more information on the end of usufruct in Spain here.

And in Wallonia and Brussels?

In the Walloon Region and the Brussels-Capital Region, the federal tax authority remains competent for inheritance and gift tax. They follow a similar line regarding the issue of covered benefits. However, according to the federal position, a strict timeline must be followed with effect from 01/08/2020. In practice, it means that you must donate before signing the compromise.


A split purchase is primarily useful to avoid inheritance tax in Belgium. Nevertheless, you should be vigilant. A carelessly planned purchase can lead to paying Spanish gift tax and capital gains tax. Moreover, if the planning is careless, VLABEL may consider the construction as a bequest.

It is therefore recommended that you seek advice on the expediency of a split purchase in Spain because the consequences are serious.

Last update: October 2020.

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