💡 Planning to Give or Receive Assets in Spain?
Whether you’re transferring a property, money, or shares, you’ll need to decide:
“Is it better to gift now or wait until inheritance?”
In Spain, gift tax (donación) and inheritance tax (sucesiones) are separate but closely related. Both can significantly affect expats and non-residents, but they’re taxed differently — and some strategic planning can reduce your exposure.
📊 Key Differences: Gift Tax vs Inheritance Tax
| Feature | Gift Tax (Donación) | Inheritance Tax (Sucesiones) |
|---|---|---|
| When it applies | While the donor is alive | Upon the donor’s death |
| Legal form required | Public deed signed before a notary | Notarial acceptance of inheritance |
| Tax return | Modelo 651 | Modelo 650 |
| Tax rates | Same scale as inheritance tax | Same scale, but deductions vary |
| Common for real estate? | ✅ Yes | ✅ Yes |
| Regional exemptions apply? | ✅ Yes | ✅ Yes |
| Often higher tax? | ❌ Not always — depends on region/value | ❌ Not always — depends on family/region |
🧾 How Tax Rates Work
Spain uses progressive tax brackets for both gift and inheritance tax. However, your relationship to the donor/deceased and the autonomous community (region) play a major role.
Tax Rates (National Reference Table)
| Value of Asset | Base Rate Range |
|---|---|
| Up to €7,993 | 7.65% |
| €7,993 – €31,956 | 7.65% – 10.2% |
| €31,956 – €79,881 | 10.2% – 15.3% |
| €79,881 – €239,389 | 15.3% – 21.25% |
| Over €239,389 | 21.25% – 34% (or more) |
Multipliers apply if the recipient is not a direct relative or is a high-net-worth individual.
📍 How Regional Rules Affect Tax Outcomes
| Region | Gift Tax for Children | Inheritance Tax for Children |
|---|---|---|
| Madrid | 99% reduction (Group I & II) | 99% reduction (Group I & II) |
| Andalucía | 99–100% reduction | 100% exemption up to €1M |
| Catalonia | Lower rates, fewer deductions | Modest exemptions; varies by heir status |
| Valencia | 75% reduction with limits | 75% reduction, strict eligibility |
📌 EU/EEA nationals can usually benefit from regional rules, even if non-resident. Non-EU residents may be limited to the national system.
🔍 When Is Gift Tax Better?
Gift tax may be preferable when:
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You want to transfer property early to reduce future inheritance exposure
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You live in a region with generous gift exemptions (e.g. Madrid, Andalucía)
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You wish to support children financially now, during a property purchase
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You’re planning long-term with tax-efficient gifting strategies
⏳ When Is Inheritance Tax Better?
Inheritance tax may be better if:
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You plan to live in the property until death
-
The heirs are Group I or II and entitled to large exemptions
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You want to avoid immediate tax and legal costs
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Your region doesn’t offer generous gift reductions
⚠️ What Foreigners Often Get Wrong
| Mistake | Impact |
|---|---|
| Assuming family gifts are always tax-free | They are not — gifts must be declared |
| Thinking inheritance is automatic | Heirs must legally accept and register |
| Ignoring regional rules | Can cost thousands in missed exemptions |
| Making large gifts without proper notary deed | May trigger audits or future registration problems |
| Waiting too long to plan | Can increase tax if asset values rise |
🧠 Strategic Planning Tips
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💼 Get a valuation before gifting or transferring
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🧾 Always file Modelo 651 (gift) or Modelo 650 (inheritance)
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📍 Know where the property is located — that determines regional rules
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📘 Draft or update your Spanish will to align with your plans
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🔁 Consider staggered gifts to stay under thresholds
⚖️ How a Lawyer Helps with Gift vs Inheritance Decisions
We assist expats and property owners with:
✅ Comparing gift vs inheritance tax in your region
✅ Calculating tax with national vs regional rules
✅ Preparing donation deeds and inheritance documents
✅ Filing tax declarations and registering property
✅ Representing you or your heirs via Power of Attorney
📞 Need Help Choosing Between Gift or Inheritance?
Our bilingual lawyers make it easy to understand your options, reduce tax, and protect your family assets in Spain — whether you’re giving now or planning ahead.
👉 Book a consultation to compare Spanish gift and inheritance tax strategies.