I want to make a donation. Should I go to the Notary?

You have decided to make a donation to someone, that is, give them something without receiving anything in return, is it necessary to do so before a Notary?

To answer this question, we have to distinguish between two cases, as does the Spanish Civil Code: i) if it is movable property, or ii) if it is immovable property. Immovable property is, basically, anything that cannot be moved from where it lies: land, houses, etc. Thus, it can be equated to real estate. As for movable property, we only have a negative definition, that is, movable property is anything that is not immovable. So, things such as money, a vehicle, or a painting.

Regarding a donation of real estate, according to article 633 of the Civil Code (CC): “For the gift of an immovable property to be valid, it must be performed in a public deed, individually expressing the properties given and the value of any charges to be paid by the donee. Acceptance may be given on the same public deed of gift or in another separate public deed; but it shall not be effective if it does not take place during the life of the donor. If it should be given in a separate public deed, the acceptance must be notified to the donor in an authentic instrument, and this formality shall be noted in both public deeds.”

It is clear that the reference to a public deed requires that the donation of real estate must necessarily be made before a Notary. Consequently, if what we want to donate is real estate, we must necessarily do so before a Notary. It should be noted that, even if this were not the case, as registration in the Property Registry can only be done through a public document, it would be equally advisable to go to the Notary to be able to register the donation in the Registry and thus benefit from its advantages.

On the other hand, for movable property, article 632 CC establishes: “The gift of a movable thing may be made orally or in wrting. An oral gift shall require simultaneous delivery of the thing given. In the absence of this requirement, it shall not be effective unless it is both made and accepted in writing.”

Therefore, it is clear that, except for the delivery of the thing given, the way to make a donation of movable property is completely up to the parties, without the need for it to be done before a Notary. However, it should be noted that, for certain movable property, there are exceptions that require that any transmission –including a donation– be recorded in a public document. However, when donating movable property, it is usually money that is being given and, in that case, there is no rule that requires it to be done before a Notary.

The problem is that, so far, we have only dealt with this issue from a civil point of view, that is, whether the donation is valid or not. Unfortunately, the tax consequences of donations must also be considered, and this is where the answer may change.

The vast majority of the reductions and bonuses on the tax to be paid for a donation are regulated by each Autonomous Community. If we pay attention to this regulation, we will discover that, in order to apply many of the reductions and bonuses, it is required that the donation be performed in a public document.

For example, in the Valencian Community, there is a reduction of € 100,000 for donations made from parents to their children over 21 years old –as long as they do not have a pre-existing patrimony of more than € 600,000–. Therefore, a donation of, for example, € 80,000 would not generate the obligation to pay any tax provided that the rest of the requirements are met. However, one of these requirements is to formalize the donation in a public document, so, despite the fact that the donation of money would remain valid even without the intervention of a Notary, we would find ourselves with the surprise of having to pay taxes for it. In this sense, it is surprising that a reduction in tax expenditure must necessarily lead to an increase in the cost of having to pay the Notary’s fees.

In short, although the donations of movable property –e.g. money–do not need to be done before a Notary to be valid, in most cases they will end up being performed in a public document. Otherwise, they will not benefit from the significant tax reductions and bonuses. Therefore, one could ask, what was the reasoning behind including this requirement?

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Estudio Jurídico y Económico