Changes to Inheritance and Donation Tax for the Balearic Islands

21 July 2023 | Tags: , , , ,


On 18 July 2023, the Government of the Balearic Islands approved an important amendment to the Inheritance and Donations Tax (ISD) Law of the Autonomous Community of the Balearic Islands

What has changed?

The following deductions have been established in relation to inheritance and donation taxes:

  • Deduction of 100% of the Inheritance/ donation taxes for heirs who are part of groups I and II which includes donations/inheritances between parents, children and spouses so in effect no tax will be due for these family members.
  • Reduction of 50% of the Inheritance/ donation taxes for siblings, uncles, aunts, nephews and nieces, which belong to group III, as long as there are no other descendants of the deceased.
  • Reduction of 25% of the Inheritance/ donation taxes for the rest of group III which includes sons-in-law, daughters-in-law, in-laws as long as there are no other descendants of the deceased.

Despite this being a great change which will generate many benefits, the Balearic government has established in this first amendment, that only tax residents in Spain will be able to benefit from it, which leaves non-residents in Spain out.

Therefore, by restricting it to people residing in Spain, it could lead to a violation of the Law due to discrimination by preventing non-residents from applying the aforementioned benefits.

In fact, this modification will have to be validated within the next 30 days by the Parliament of the Balearic Islands and in the event that the aforementioned discrimination with respect to non-resident taxpayers is not resolved, it maybe be possible for non tax residents to appeal against payment of said tax as it could be considered discriminatory. Let us wait for the formal approved of the law once it has been officially published.

However it would certainly seem that this is the beginning of a great change that can bring added benefits to thousands of heirs. It is likely that other regions in Spain will follow suit after the party changes in regional Government after the recent elections.

Contact My Lawyer in Spain:

If you’re considering moving to the Balearic Islands or need guidance on your move to Spain, our team of experts at My Lawyer in Spain is here to assist you. Book a consultation with us today to ensure a seamless and successful journey towards moving to Spain.

My Lawyer in Spain is dedicated to providing comprehensive legal support to ensure your Spanish move and life here is a smooth and enjoyable experience – contact us today.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult with one of our qualified legal professionals for personalised guidance on your specific situation.


My Lawyer in Spain

Written by:
My Lawyer in Spain

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