The transfer tax in Spain has two main aspects: by “mortis causa” and acquisition “inter vivos”. Changes in the inheritance tax this year, with the communities reducing it or not applying it. Changes to inheritance tax this year, with communities reducing it or not applying it

Inheritance tax has been a burden for years that has generated debate and unrest among heirs in many autonomous communities. Despite the fact that it is a tax that, in reality, has an unequal impact depending on the region in which one resides, in recent months there have been significant changes that have drastically reduced the payment of this tax in various parts of Spain, and, in fact, some communities have practically eliminated it.

There are regions where the bonuses and exemptions have reached the point of making the tax practically disappear for certain relatives. These changes represent a relief for many people who, until now, have been forced to pay significant amounts simply to receive the inheritance of their loved ones. With the entry into force of the new regulations in some communities, heirs with certain degrees of kinship will be able to receive their assets without worrying about the additional cost of this tax. Therefore, it is important to review in detail where the inheritance tax has been eliminated or drastically reduced and what are the requirements that the beneficiaries must meet to benefit from these tax advantages.

Goodbye to the Inheritance Tax if you live in Extremadura

One of the most significant movements has occurred in Extremadura, where the elimination of the Inheritance Tax has been newly expected by many families. Until now, the 100% bonus was limited to kinship groups I and II, which included direct descendants and spouses in inheritances of up to 500,000 euros.

From now on, this benefit also extends to nephews, stepchildren and other relatives with special ties, even if there is no direct consanguinity. This measure represents a significant shift in the tax system in the region and is an advantage for those who, until now, have had to face a considerable tax burden.

Madrid, another case in which exemptions are being extended

Another region that has introduced changes is the Community of Madrid. Traditionally, this region already had 99% tax breaks for descendants, ascendants and spouses. Now, the community has gone a step further and has decided to extend tax benefits to siblings, uncles and nephews, applying a 50% tax break to them.

This move makes Madrid the first autonomous community to offer a tax reduction of this magnitude for this degree of kinship, which could set a precedent for future reforms in other regions of Spain, which could also apply the aforementioned reduction over the next few years. Communities where inheritance tax are no longer a problem.

Although Extremadura and Madrid have been the protagonists of the most recent changes, there are other communities where inheritance tax is practically symbolic or even non-existent for certain heirs. Some of them are:

• La Rioja: it recovered in 2024 the 99% bonus for descendants, ascendants and spouses when the inheritance exceeds 400,000 euros.
• Galicia: direct inheritances are exempt up to one million euros, with a reduction of 400,000 euros for certain relatives.
• Basque Country: in this community there is no tax to pay for inheritances of less than 400,000 euros between descendants, ascendants and spouses.
• Cantabria: 90% to 99% bonuses apply for descendants, ascendants and spouses, reaching 100% if the inheritance does not exceed 100,000 euros.
• Murcia: maintains a 99% bonus for descendants, ascendants and spouses.
• Canary Islands: from September 2023, the 99.9% bonus makes the tax almost non-existent for most heirs.
• Castilla-La Mancha: a 100% bonus applies for spouses and descendants under 21 years of age, with 80% for inheritance exceeding 300,000 euros.
• Andalusia: reduction of up to one million euros for descendants, spouses and ascendants.
• Aragon: 65% bonuses for inheritances of less than 100,000 euros, with total exemptions in some circumstances.

A trend towards the elimination of the tax

The Inheritance Tax has been one of the most controversial tax figures in Spain, with enormous differences depending on the autonomous community in which one resides. The trend in recent years clearly points to its progressive reduction, with measures that benefit direct heirs and, in some cases, also more distant relatives.

Extremadura and Madrid have been the latest to join this dynamic, extending the bonuses and eliminating the payment of this tax for a greater number of beneficiaries.

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