Many good reasons to establish co-ownership with minor children
In the practice of real estate purchases on Mallorca by German non-residents, the question often arises as to whether it is possible and sensible to also have the minor children appear as co-owners and be entered in the land register. There are many good reasons for this. In Germany there are very high allowances for gifts to children (400,000 €) and this is renewed every 10 years. These allowances can be used to transfer assets to the next generation during one’s lifetime and thus save inheritance tax later on. With Spanish wealth tax, it also makes sense to divide the property among several owners – even if they are minors – because each co-owner is entitled to an allowance of €700,000 when calculating the wealth tax. However, the devil is in the detail: The German legislator has set up various hurdles for the acquisition of real estate by minors, which must be observed.
Family court consent
Normally, gifts of money from parents to children do not require any approvals from the family court. It is different if the gift is “not merely legally advantageous” – § 107 BGB. When a legal transaction is not merely “advantageous” and requires the approval of the family court is disputed in case law: For example, the acquisition of an unencumbered property free of charge does not require approval (BGH V ZB 13/04, while the acquisition of condominium property free of charge under the WEG should require approval (BGH V ZB 206/2010, NJW 2010, 3643). In case of doubt, an experienced German family law expert should be asked for advice.
Spanish notaries and property registers do not want to deal with the solution of these legal questions and for some years have always required the approval of the German family court for the participation of minors. If the German family court has approved the share purchase of the Spanish property, the parents can purchase property shares for the children with this approval document and the children’s birth certificate. The same applies if the parents later want to sell the property – and thus also the children’s shares. This also requires the approval of the family court, unless the children have come of age in the meantime.