Editorial transparency and use of artificial intelligence
This article forms part of the CostaLuz Lawyers blog and is published for general informational and educational purposes only. It was prepared with the assistance of artificial intelligence tools and, before publication, was substantively reviewed and editorially approved by Maria de Castro, a Spanish-qualified lawyer registered with the Cádiz Bar Association under number 2745, founder of CostaLuz Lawyers and the person responsible for the editorial review of the published content.
This article does not constitute legal, tax, immigration, employment, estate-planning or investment advice and does not replace an individual assessment and the professional work of the appropriate CostaLuz Lawyers specialist. No action or omission should be based solely on this information.
Madrid’s expanded Inheritance and Gift Tax relief has been in force since 1 July 2025, following final approval by the Madrid Assembly on 12 June 2025. It is no longer a proposal: it is the relief that applies to estates and gifts in the region today. It made Madrid the first Spanish autonomous community to extend a 50 % exemption to siblings, uncles, aunts, nephews, nieces, and the entire Group III of relatives—beyond the traditional beneficiaries in Groups I and II (parents, children, spouses)
Important: Spanish succession follows two distinct paths depending on whether the deceased left a valid will (testate) or not (intestate). The intestate path requires a Declaration of Intestate Heirs (Declaración de Herederos Abintestato) — a step not needed when a will exists. Learn more about the succession process →
Expanded Scope of Beneficiaries
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- From 25 % to 50 % exemption for transfers between siblings, uncles/aunts and nephews/nieces, and all other Group III relatives.
- Applies equally to both inheritances and lifetime gifts.
“This initiative will generate savings of approximately €140 million annually for Madrid taxpayers and cements our region as the lowest-taxed in Spain,” announced Rocío Albert, Minister of Economy, Finance and Employment
Simplified Formalities & Enhanced Small-Scale Relief
- 100 % exemption on occasional gifts under €1,000, with no tax return or self-assessment required.
- Elimination of the notarial deed requirement for gifts up to €10,000, slashing both administrative steps and costs
These simplifications reduce bureaucracy and make minor transfers virtually effortless.
Regional Competitiveness & Fiscal Context
- Madrid remains the only Spanish region without its own regional taxes, having implemented 32 tax cuts since 2019 under President Isabel Díaz Ayuso.
- Madrid has topped the Autonomous Fiscal Competitiveness Index—compiled by the Fundación para el Avance de la Libertad and the U.S. Tax Foundation—every year since 2020
- Despite lower rates, the region’s revenue continues to climb: in 2022, Madrid’s share of Personal Income Tax (IRPF) grew by 7.2 %, adding €897 million to total receipts of €13.392 billion
What This Means for You
- Verify Your Relationship Group: Confirm whether you fall within Group III to benefit from the 50 % exemption.
- Plan Small Gifts Strategically: Structure occasional gifts under €1,000 to take advantage of full exemption without filings.
- Skip Notarial Costs: Use the relaxed rules for gifts up to €10,000 to avoid notary fees and streamline the process.
- Seek Professional Guidance: For complex successions, a tailored strategy can maximize relief and ensure compliance.
Ready to Maximize Your Savings?
At Costaluz Lawyers, we specialize in inheritance and gift tax planning throughout Spain’s autonomous communities. Our expert team can help you:
- Analyze your family structure and assets
- Prepare and file all necessary documentation
- Optimize exemptions under the new Madrid regulations
- Ensure full compliance with both national and regional requirements
📞 Contact us today to schedule a personalized consultation and secure the maximum benefits from Madrid’s historic tax reform!
For a complete overview of taxation in Spain, see our Spanish tax guide for heirs.
Aviso legal: Esta informacion se proporciona unicamente a titulo orientativo y no constituye asesoramiento fiscal o legal personalizado. Cada caso debe evaluarse de forma individual segun las circunstancias especificas del cliente. Es imprescindible consultar a un especialista cualificado antes de tomar cualquier decision.
Legal Notice: The content on this page is provided for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. No action should be taken based solely on this content without first seeking independent professional legal counsel. Each case requires individual assessment based on its specific circumstances. CostaLuz Lawyers accepts no liability for actions taken or not taken based on this content.
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Reviewed by María Luisa de Castro, CEO at CostaLuz Lawyers — Updated 2026
This is general information, not definitive legal advice — every case requires individual analysis.