Where taxpayers get caught out
Families often focus on the notary and forget the deadline. Filing after six months adds surcharges and interest, and if the reductions depend on filing in time or on conditions such as keeping the property, they can be lost.
Who pays and how much
| Factor | Effect on the tax |
|---|---|
| Relationship with the deceased or donor | Spouses, children and parents pay least |
| Value received | Progressive scale on the net value |
| Previous wealth of the heir | Can increase the tax for distant relatives |
| Main home and family business | Specific reductions if conditions are met |
| Residence of deceased and heir | Decides which region's rules apply |
Inheritances
We gather the documents, value the assets, calculate the tax under Balearic rules and file the return within six months, or request an extension in time. We coordinate with the notary for the acceptance deed and with the Land Registry. See the inheritance tax guide.
Gifts during life
Gifts of money or property to children are common in families with homes in the islands. They are taxed under gift tax rules, which differ from inheritance; some reductions require the gift to be made in a public deed. See gift tax in the Balearics.
Foreign heirs and foreign wills
When the heirs live abroad, Spain taxes the assets located in Spain. Their own country may also tax the inheritance, and a credit may be available. We coordinate the Spanish filing with advisers in the heirs' countries.
Planning ahead
A Spanish will, the right ownership structure and well-timed gifts can reduce the tax and the paperwork for your family. We review your situation with our lawyers and propose options.
Inheritances also involve the municipal plusvalía and, later, possibly wealth tax.
An illustrative example
Based on situations we commonly see; not a specific client. Three children living in England inherited their mother's flat in Palma. We checked that Balearic rules applied, calculated the tax with the reductions for descendants, filed within the deadline and handled the plusvalía, so the flat could be sold four months later without delays.
This page is published by Castell.tax, the tax practice of Castell.law in Palma de Mallorca. It is general information; tax rules and rates change, so check your case with us before filing.
Not sure what you owe? Ask before the deadline
Send us your situation or the letter you received. A tax adviser will tell you what applies, what it could cost and what to file.
Questions about inheritance tax in the Balearics
Who pays inheritance tax in Spain?
Each heir pays on what they receive, not the estate as a whole.
What is the deadline?
Generally six months from death, extendable if requested within the first five months.
Do children pay inheritance tax in the Balearics?
They benefit from large reductions and credits; the final amount depends on the case.
Can non-residents use Balearic rules?
In general yes, for assets located in the Balearic Islands.