Gift tax on giving a property in Spain

Who pays what

The tax accrues on the day the gift deed or contract is made (Ley 29/1987 art. 24.2). The return is due within 30 working days from the following day (Real Decreto 1629/1991 art. 67.1.b). The recipient files a self-assessment and pays with it where the State tax administration is the competent body (DA 2ª, section Dos).

How the gift tax is computed

The rate follows the scale approved by the region, or, if the region has none or its rules do not apply to the taxpayer, the national scale from 7.65% to 34% (art. 21). The result is then multiplied by a coefficient that depends on the recipient’s existing wealth and the family group (art. 22). For gifts, where the region has not regulated reductions, the taxable base is the whole value of the gift, with no allowance (art. 20.5). Reductions for gifts of family businesses at 95% exist, with conditions, in article 20.6, but not for a home as such.

Regions may approve their own reductions, scales and coefficients, and the result varies across Spain. No regional figure is quoted in this guide, since no regional source was read for it. Ask the regional tax agency for the current rules and forms.

Which region applies when someone lives abroad

The second additional provision of Ley 29/1987, as worded since 11 July 2021, was added after the EU Court of Justice judgment of 3 September 2014 (C-127/12). For gifts it says:

• A non-resident recipient of a Spanish property may apply the rules of the region where the property is located (DA 2ª.1.c).
• A resident of Spain receiving property located abroad may apply the rules of the region where they live (DA 2ª.1.d).
• For movable assets located in Spain, a non-resident recipient uses the region where the assets were located for the greater number of days in the five years before the day before accrual (DA 2ª.1.e).
• If one deed gives several assets to the same recipient from the same donor and different regions apply, the tax is computed with an average rate for each region (DA 2ª, section Uno, point 3).

Residents of Spain are treated as resident in the region where they spent the greater number of days in the last five years (DA 2ª.2). The rule for a UK, Canadian or US recipient of a Spanish flat is therefore the region where the flat is.

The donor’s income tax

For income tax, a gift is a free transfer. The gain is the difference between the transfer and acquisition values (Ley 35/2006 art. 34.1.a). For a free transfer, the transfer value is the value fixed under gift tax rules, capped at market value (art. 36). Calculation, not a quote. If the donor bought for €200,000 including costs and the gift is declared at €260,000, the gain is €60,000, taxed at the savings scale for a resident (see capital gains tax on a home sale) or at 19% for a non-resident donor, which would be €11,400. A loss on a gift is not counted (art. 33.5.c). Whether the 3% withholding of the IRNR law applies to a gift is not answered by the texts read; ask the tax agency.

If the donor is over 65 and the gift is the main home, the over-65 exemption in article 33.4.b speaks of a “transmisión”, but the texts read do not say whether a gift is covered: see the over-65 exemption and ask before relying on it.

The municipal tax on the gift

The recipient owes the plusvalía on the land value, within 30 working days, and the donor must tell the town hall within the same period (arts. 110.2.a and 110.6.a). The base uses the cadastral land value and the years of ownership, and the real-gain route is available; see plusvalía municipal. The 95% rebate in article 108.4 is for transfers on death, not for gifts.

Which professional to consult

A lawyer registered with a Spanish bar association (colegio de abogados) can compare gifting with leaving the home by will and check the donor’s and recipient’s tax positions: property lawyer. A notary executes the gift deed. A tax adviser can confirm treatment in the donor’s country.