If you’re inheriting assets or gifting property in Spain, you may be subject to Impuesto sobre Sucesiones y Donaciones — Spain’s inheritance and gift tax (ISD).
Unlike many countries, Spain taxes the recipient of the inheritance or gift — and tax rates vary by region, relationship, and asset type.
This guide explains:
-
Who pays inheritance and gift tax
-
Regional rules and allowances
-
Rates and exemptions
-
How the tax is calculated
-
Filing deadlines and strategies
👥 Who Pays Inheritance & Gift Tax in Spain?
| Scenario | Tax Applies? |
|---|---|
| Inheriting from Spanish resident (anywhere) | ✅ Yes |
| Inheriting Spanish property (non-resident donor) | ✅ Yes |
| Gifting Spanish assets (residents or non-residents) | ✅ Yes |
Spain taxes Spanish-situs assets, and in many cases, worldwide inheritances if either the recipient or donor is resident in Spain.
🏷️ Taxable Transfers
-
Real estate (homes, land)
-
Bank deposits
-
Stocks and investments
-
Vehicles
-
Artwork and jewelry
-
Life insurance proceeds
📝 Gifts are taxable during the donor’s lifetime; inheritances are taxable upon death.
📍 Regional Rules & Allowances
Each Autonomous Community sets its own tax allowances, deductions, and rebates.
Examples:
-
Madrid: 99% exemption for spouses, children, and parents
-
Andalusia: Near-total exemption for close relatives
-
Catalonia: Lower exemptions, especially for non-relatives
-
Valencia & Balearics: Moderate to high rates for distant relatives
❗ Non-residents must apply national rules, unless they inherit from someone who was resident in a region.
🧮 Inheritance Tax Rates (State Scale)
| Inheritance Base (€) | Tax Rate |
|---|---|
| 0 – 7,993 | 7.65% |
| 7,994 – 31,956 | 10.2% |
| 31,957 – 79,881 | 15.3% |
| 79,882 – 239,389 | 21.25% |
| 239,390 – 398,778 | 25.5% |
| 398,779 – 797,555 | 29.75% |
| Over 797,555 | 34% |
🧾 Multiplied by coefficients depending on your relationship and wealth.
👨👩👧👦 Relationship Groups & Coefficients
| Group | Relationship | Coefficient |
|---|---|---|
| I | Children (under 21) | 1.0 |
| II | Children (21+), parents, spouse | 1.0 |
| III | Siblings, nieces/nephews, in-laws | 1.5882 |
| IV | Unrelated persons | 2.0 |
💡 The closer the relationship, the lower the tax burden.
🛑 Non-Residents: Higher Tax Risk
Non-resident heirs or donors cannot apply regional exemptions unless:
-
The deceased was resident in a Spanish region
-
The gifted asset is immovable property (real estate) located in a region
🧠 Consult a tax lawyer to optimize the residency route when gifting or planning an inheritance.
🧾 Filing & Payment Deadlines
| Event | Form | Deadline |
|---|---|---|
| Inheritance | Modelo 650 | 6 months from date of death (extendable) |
| Gift | Modelo 651 | 30 working days from date of gift |
Late filing = penalties + interest.
🧠 Tax Planning Tips for Expats
-
Consider life insurance structures that pass tax-free
-
Gift real estate in stages to reduce tax impact
-
Use regional allowances for residents before relocating
-
Prepare Spanish wills to simplify procedures
-
Always register property and wealth properly for valuation
⚠️ Inheritance Tax Example
UK resident inherits Spanish property worth €600,000 from Spanish-resident father living in Madrid.
-
Group II relationship
-
Regional exemption in Madrid: 99%
-
Effective tax: €600,000 → €6,000 → €60 due
Had the deceased lived in Catalonia: tax could be €90,000+.
👨⚖️ Need Inheritance or Gift Tax Support in Spain?
At Borderless Lawyers, we help:
-
Expats and heirs navigate ISD rules
-
File inheritance tax returns (Modelo 650/651)
-
Access regional exemptions
-
Transfer property titles securely