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Taxes For Members

Where are the best and worst places for inheritance tax in Spain?

The Local Spain
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Where are the best and worst places for inheritance tax in Spain?
What are the inheritance tax rates in each region in Spain? Photo: Andrea Piacquadio / Pexels

Inheritance tax varies greatly in Spain depending on what region you or your relatives live in. Find out what the rates are across the Spanish territory in 2024 so you can plan accordingly.

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Spain’s inheritance or succession tax, known as el impuesto de sucesiones is both complex and controversial, but it’s important to understand how it works in order to avoid any unfortunate financial surprises when a loved one with a connection to Spain passes away. 

Spanish inheritance tax is decided by the Spanish State but all of the country’s 17 regions have the right to change these rules to make them more beneficial or detrimental to heirs. Luckily, the general trend is towards the former. A word you'll come across frequently when reviewing inheritance tax in Spain is bonificación, which means tax reduction. 

Generally, the regions that went from socialist to PP or right-wing governments in the May 2023 elections, made the conditions more favourable. This includes Valencia, Aragón, La Rioja and the Balearic Islands. While Madrid, Galicia and Andalusia had already implemented better conditions earlier. 

This means the regions with the highest inheritance tax rates currently are Asturias, Catalonia and Castilla-La Mancha. 

The succession tax rates will differ depending on how much is inherited, but it is progressive ranging from 7.65 percent on the first €7,933 up to 34 percent on €797,555+, but several bonuses can be applied to these rates. 

There are also many factors to consider, such as which category heirs and other beneficiaries fall into, or the fact that in Spain the spouse of the deceased is also subject to inheritance tax, which is not the case in the UK and many other countries.

Keep in mind that regional governments can and do change their inheritance tax conditions relatively often, so make sure you double-check with an official source, preferably the website of your regional government.

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What are the different groups of heirs in Spain?

As mentioned above, there are several categories or groups that heirs can fall into and this will depend on how much allowance they can benefit from. The groups are the following:

Group 1: Children under 21 years of age

Group 2: Children over 21 years of age, spouses and parents

Group 3: Siblings, nieces, nephews, as well as aunts and uncles

Group 4: Cousins or more distant relations

EXPLAINED: How choosing the right region in Spain can save you thousands in inheritance tax

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What are the inheritance rates in my region?

Andalusia

In Andalusia groups 1 and 2 are exempt from payment if the amount of the inheritance does not exceed €1 million.

Aragón

The government has proposed that for 2024 bonuses will reach up to 99 percent for direct descendants under 21 years of age who inherit an amount less than €600,000.

A bonus of 99 percent for Groups 1 and 2 will also be applied when it comes to Donation Tax, which up until now was 65 percent. This means that descendants over 21 years of age, spouses and ascendants will be exempt from paying taxes up to a maximum of €500,000 as of January 1st, 2024.

Asturias

Those in Asturias currently pay the most on inheritance tax in Spain. However, those in groups 1 and 2 do not pay any taxes on inheritances of less than €300,000.

Balearic Islands

In the Balearic Islands, since July 2023 inheritances between ascendants, descendants and spouses do not pay any tax thanks to the 100 percent tax bonus. In addition, a general bonus of 25 percent of the quota is applied to inheritances between siblings, aunts and uncles and nephews and nieces, which rises to 50 percent if the deceased had no descendants.

Basque Country

For those in groups 1 and 2 in the Basque Country, inheritances with an amount less than €400,000 are not required to pay taxes. When the amount is greater than €400,000, a tax rate of 1.5 percent will be applied.

READ ALSO: Why you should move to this region in Spain if you want to pay less tax

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Canary Islands
Since September 2023, inheritances between ascendants, descendants, spouses, siblings, aunts, uncles, nephews and nieces are practically exempt with a 99.9 percent bonus applied to the quota. The taxation of donations between spouses, ascendants and descendants has also been improved, which is now reduced by 99.9 percent.

Cantabria

For those in group 1, there is a reduction of €50,000 plus €5,000 for each year the taxpayer is under 21. For those in group 2, it’s also €50,000 and for those in group 3, it’s €25,000. This year the local government is planning to reduce the amount of inheritance between siblings by 50 percent. 

Castilla La-Mancha

In Castilla La-Mancha the bonus for groups 1 and 2 will be 100 percent up to an amount of €300,000. For amounts after this, it will be 80 percent. 

Castilla y León

Castilla y León allows reductions for children, spouses and parents. Those in groups 1 and 2 will benefit from an allowance of €60,000. An additional reduction of €6,000 will be applied for each year the taxpayer is under the age of 21. A variable reduction will also be applied, which is calculated as the difference between €400,000, plus the sum of the previous amounts and the state deductions.

Catalonia

In Catalonia, tax is not paid if the amount to be inherited is less than €100,000 in the case of spouses or descendants in group 1 (under 21 years of age), €50,000 for nephews and nieces or €30,000 for ascendants (parents or grandparents).

Extremadura

Those in groups 1 and 2 will only pay 1 percent.

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Galicia

In Galicia, for those in group 2, the exemption limit is €400,000. 

La Rioja

Those who inherit in La Rioja will benefit from a deduction of 99 percent of the tax quota for inheritances between ascendants, descendants and spouses.

Madrid

Madrid has applied a discount of 99 percent of the tax quota for taxpayers included in groups 1 and 2. In addition, for the heirs included in group 3, it establishes a discount of 15 percent or 10 percent, depending on what relation they are to the deceased.

Murcia

Those in groups 1 and 2 will only pay 1 percent.

Navarre

In Navarre no discounts are applied, but how much tax varies according to what group you fall under. Spouses for example have a rate of 0 percent up to €250,000, and 0.80 percent from there upwards. In the case of descendants and parents, the applicable rate varies between 2 percent and 16 percent.

Valencia region

In Valencia with retroactive effect from May 28th, 2023, the bonus on inheritances between spouses, ascendants and descendants is now 99 percent. If tax was paid for an inheritance or donation after that date, a rectification may be requested in your annual income tax return. 

Case study example

For example, in the case of a 30-year-old who inherits assets worth €800,000, it would vary greatly depending on where they lived

In the Balearic Islands now for example, they wouldn't pay anything on this amount, whereas before they would have paid €5,950. In Galicia, Cantabria and Andalusia they would also not pay anything as these regions have subsided 100 percent of the tax.

In the Canary Islands, they would go from paying €31,749 to only €134; in Valencia from €63,194 to €1,264; and in La Rioja, from €32,343 to €1,588.

The rest of the communities have not announced changes so far, so this is what you would pay in each ranging from highest to lowest. Castilla y León, €810; Madrid, €1,586; Extremadura, €1588; Murcia, €1640; the Basque Country, €3,150; Navarre, €17,000; Castilla-La Mancha, €31,759; Catalonia, €44,569; and Asturias, €103,135 .

In the case of Aragón, you would pay €55,467, but the government has announced bonuses, which will reach up to 99 percent for direct descendants under 21 years of age.

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