Inheritances of homes stabilize at record levels due to generational change

BarcelonaReceiving a home as an inheritance, especially from parents to children, is no longer an anecdote or a cyclical phenomenon, but a structural one, related to the generational turnover in a society where the number of retirees and elderly people who own properties is growing, and a youth that does not earn enough to be able to own a home is losing weight. Until June, this type of transmission has continued at high levels, although with more force in the State as a whole than in Catalonia, according to data from the National Statistics Institute (INE).

The highest point was reached in 2021, after covid, which caused many more deaths than usual. Now, the figure has settled at about 50,000 inheritances per year in Catalonia that contain at least one home, around 80% of the total. At the state level, the proportion is similar and portrays a generation that concentrated a good part of its savings in one or more properties, according to data from the Notarial College of Catalonia. This is a trend that will continue over the coming years with the generational turnover of the baby boomers –born between the second half of the forties and the first half of the sixties of the last century–, warns Raquel Iglesias, vice-dean of the Notarial College of Catalonia. Another notable fact is that the number of homes transferred in this way exceeds that of recorded inheritances, because many of these include more than one.

"People who bought their first home or a second residence in the sixties, seventies, or eighties of the last century are now at an advanced age – 80 and 90 years old –, which, without a doubt, favors that, after their passing, their heirs acquire the homes," explains Jorge Fernández, lawyer and partner at AF Legis. These are, furthermore, homes that tend to be free of mortgage charges. This makes it easier for the descendants to accept the inheritance, since assuming it does not pose a burden. The partner at AF Legis considers it "normal that in the coming and immediate years this increase in the acquisition of homes through inheritance will continue, as those who acquired their homes in the seventies and eighties of the last century pass away".

Iglesias, for his part, highlights that the homes that the parents of the baby boomer generation pass on to their children, many of whom are in their sixties or retired and have their own assets, are already paid off and amortized. This means that in many cases, the beneficiaries make donations to their children, who are part of the generation with the most difficulty buying or renting a house. "There is a lack of supply in the market and, in many cases, the demand that should be buying it cannot do so," he adds. This is demonstrated by data from notaries. A percentage of these properties returns to the market through a donation or a sale, when the heirs prefer to obtain liquidity because they do not need more properties or because there are several heirs among whom to distribute them, for example.

This evolution of inheritances has to do with the so-calledgreat transfer, a process through which enormous volumes of wealth accumulated by previous generations, especially thebaby boomers, will pass into the hands of their heirs over the coming decades, those born between the nineties of the last century and the decade of 2010. It is estimated that during the next two decades there will be an intergenerational transfer of wealth equivalent to 17% of Spain's wealth, which is about 1.6 trillion euros. The gap between generations is evident. In households where the head of the family is between 65 and 74 years old, the average wealth is 463,800 euros; and in those under 35 years old, 90,100 euros, according to data from the Survey of Household Finances, from the Bank of Spain.

The most important part will be primary and secondary residences, taking into account that real estate makes up more than three-quarters of family assets. The values received per person will be higher than in other stages because households have fewer children, with an average of 250,000 euros per family, 41% more than what the baby boomers received, according to estimates from a study by the Afi Emilio Ontiveros Foundation.

However, the act of accepting an inheritance is not exempt from tax obligations, and these vary significantly depending on the autonomous community. The autonomous communities that penalize these transactions the least, with almost zero fees in the case of direct family members, are Madrid, Andalusia, the Valencian Community, the Balearic Islands, Cantabria, Murcia, La Rioja, Castile and León, the Canary Islands, and Extremadura. Catalonia is found to have a "medium-high" tax burden, according to Fernández.