Transferring real estate to your children, spouse, or relatives during your lifetime can be a smart estate planning move — but it’s not tax-free or simple.
If you’re a foreigner gifting property in Spain, it’s crucial to understand the legal requirements, tax consequences, and whether it’s better to gift now or leave it in a will.
This article walks you through the process of donating property to family in Spain — with practical insights for residents and non-residents alike.
🧾 What Is a Property Gift in Spain?
A gift or “donación” is a voluntary, irrevocable transfer of ownership from one person to another — without payment.
In Spain, gifts between living people are subject to the Gift Tax (Impuesto sobre Sucesiones y Donaciones – ISD), similar to inheritance tax.
🧑‍⚖️ All property gifts must be formalized before a Spanish notary and registered.
đź‘Ą Who Can Receive a Property Gift?
There are no restrictions on who can receive a gift, but tax treatment depends on the relationship between the giver (donor) and receiver (donee):
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Group I: Children under 21
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Group II: Children over 21, spouses, parents
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Group III: Siblings, nieces/nephews, in-laws
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Group IV: Unrelated individuals
đź’ˇ Closer family = better tax treatment
đź’° How Is Gift Tax Calculated?
Gift tax is:
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Paid by the recipient
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Based on the market value of the property
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Regulated at the regional level, with different deductions by Autonomous Community
Typical regional reductions:
| Region | Family Deductions (Spouse/Children) |
|---|---|
| Madrid | 99% reduction |
| Andalusia | 99% (for children and spouses) |
| Catalonia | 95% (with limits) |
| Valencia | 75–99% (age and value-based) |
Use Modelo 651 to file the gift tax return.
🏦 Additional Costs When Gifting Property
Aside from gift tax, gifting property may trigger:
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PlusvalĂa Municipal (capital gains tax on land value)
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Notary fees (based on property value)
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Property registration fees
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AJD (Stamp Duty) in some cases
đź’¸ These costs are often similar to or higher than inheritance costs.
🗂️ Required Documents for Property Gifts
You’ll need:
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Property title deed (escritura)
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NIEs for both donor and recipient
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Cadastral certificate (IBI)
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Property tax receipts
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Notarial deed of donation (Escritura de DonaciĂłn)
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Proof of gift tax payment (Modelo 651)
🧠Should You Gift Property or Leave It in a Will?
| Gift While Alive | Inheritance via Will |
|---|---|
| Immediate transfer | Delayed until death |
| Trigger gift tax | Trigger inheritance tax |
| More paperwork & costs now | Simpler if done correctly |
| May reduce future inheritance | May preserve tax allowances |
đź’ˇ Gifting property now may be useful for:
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Helping children financially now
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Avoiding future family disputes
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Strategic tax planning before residency changes
But inheritance may be more cost-efficient overall in many cases.
🌍 Can Foreigners Gift Property in Spain?
Yes. Both residents and non-residents can gift property located in Spain. Key points:
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Must do it before a Spanish notary
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You’ll need an NIE
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You may use a power of attorney to handle it remotely
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Recipients abroad may still owe Spanish gift tax
👨‍⚖️ How Borderless Lawyers Can Help
We support foreigners with:
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Drafting the donation deed
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Filing all taxes (Modelo 651, plusvalĂa)
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NIE registration and power of attorney
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Coordinating with regional tax authorities
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Evaluating if a gift is better than inheritance