Tax advisor: Balearic Islands eliminates Inheritance and Gift Tax in some cases and decreases Transfer Tax and Stamp Duty when acquiring properties

The tax fight between the autonomous communities experiences a new advance reaching the Balearic Islands. In that sense, they have announced the elimination of Inheritance and Gift Tax on acquisitions between parents and children, grandparents and grandchildren and between spouses. In addition, they have reduced Transfer Tax and Stamp Duty on the purchase of first homes for young people and people with disabilities.

The Autonomous Administration has emphasized the need to reduce taxes for families and highlighted that, with this reform, the Balearic Islands will have the lowest Inheritance and Gift Tax in the country.

The decree-law, which approves these modifications on regulations, must be ratified by the Autonomous Parliament within a month.

In the case of inheritances between siblings or from uncles to nephews and nieces, Inheritance and Gift Tax is reduced by half if the deceased have no descendants, and by 25% when they do leave descendants. These tax modifications apply both to inheritances by cause of death and to inheritance agreements or “living inheritances”, which have their own regulation in the own civil law of the Balearic Islands.

The same decree-law has included the suppression of the Transfer Tax and Stamp Duty when acquiring the first home by people under 30 years of age and with disabilities, provided that their individual annual income does not exceed 52,800 euros or 84,480 euros in case of joint declaration. In addition, this exemption applies provided that the sale price of the property does not exceed 270,151 euros.

For the purchase of a habitual residence by people between 31 and 35 years old, large or single-parent families and families with disabled dependents, the tax is reduced by half if the value of the house does not exceed 270,151 euros (350,000 euros in the case of large families).

B Law & Tax International Tax & Legal Advisors.

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