Enter inheritance details
📊 Calculation breakdown
Spain’s Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones — ISD), in its inheritance form, is the tax that heirs and legatees must pay upon receiving assets from a deceased person. It is governed by Law 29/1987 of 18 December and applied to the net value of inherited assets after deducting the deceased’s debts and encumbrances. The most important feature of this tax is the enormous variation by region: Autonomous Communities control almost all of the collection, meaning the effective tax can range from near-zero in Madrid or Andalusia (99% bonus for Groups I and II) to a significant liability in Asturias or the Balearic Islands, which apply the full national tariff. In 2026, failing to understand this regional dimension could cost heirs tens of thousands of euros unnecessarily.
🔍 How does Spain’s inheritance tax work?
The calculation follows four mandatory stages:
- Estate valuation: All assets (real estate, bank accounts, shares, vehicles, qualifying life insurance proceeds) are added together, and the deceased’s debts are deducted.
- National reductions: The statutory reduction corresponding to the relationship group is applied.
- Gross quota calculation: The taxable base (value after reductions) is applied to the national progressive tariff (7.65% to 34%).
- Multiplying coefficient and regional bonuses: The quota is adjusted by the heir’s pre-existing wealth, then reduced by any applicable regional bonus.
👪 Relationship groups and national reductions
The law defines four groups that determine both the base reduction and the multiplying coefficient:
| Group | Relationship | Minimum national reduction |
|---|---|---|
| Group I | Descendants under 21 | €47,858.59 + €15,956.87 per year under 21 |
| Group II | Descendants ≥ 21, spouse, ascendants | €47,858.59 |
| Group III | Siblings, nephews, uncles, in-laws | €7,993.46 |
| Group IV | Cousins, distant relatives, unrelated heirs | None |
The Group I reduction stacks: a grandchild aged 18 is entitled to €47,858.59 + 3 × €15,956.87 = €95,729.20 in reductions before any tax is calculated.
📈 National progressive tariff 2026
The taxable base is subject to this cumulative scale:
| Taxable base up to | Cumulative quota | Next bracket up to | Rate |
|---|---|---|---|
| €7,993.46 | — | — | 7.65% |
| €15,980.91 | €611.50 | — | 8.50% |
| €23,968.36 | €1,290.43 | — | 9.35% |
| €31,955.81 | €2,037.26 | — | 10.20% |
| €47,930.72 | €4,685.10 | — | 11.90% |
| €79,880.52 | €9,166.06 | — | 16.15% |
| €159,634.83 | €23,063.25 | — | 21.25% |
| €398,777.54 | €80,655.08 | — | 25.50% |
| €797,555.08 | €199,291.40 | — | 34.00% |
🗺️ Regional bonuses: where you save the most
This is the decisive variable. Communities have applied dramatic variations:
| Autonomous Community | Groups I & II | Groups III & IV |
|---|---|---|
| Madrid | 99% bonus | No bonus |
| Andalusia | 99% bonus | No bonus |
| Galicia | 99% bonus | No bonus |
| Canary Islands | 99% bonus | No bonus |
| La Rioja | 99% bonus | No bonus |
| Murcia | 99% bonus | No bonus |
| Catalonia | 99% bonus (2024 reform) | No bonus |
| Cantabria | 90% bonus | No bonus |
| Castile-La Mancha | 85% bonus | No bonus |
| Aragon | 65% bonus | No bonus |
| Valencia Region | 75% bonus | No bonus |
| Navarre (Foral) | 100% (own foral tariff) | Own foral tariff |
| Basque Country (Foral) | 100% (own foral tariff) | Own foral tariff |
| Asturias | No bonus | No bonus |
| Balearic Islands | No bonus | No bonus |
| Extremadura | No bonus | No bonus |
📝 Worked examples
Example 1: Adult child inherits apartment in Madrid — Group II
Profile: Clara, 34, inherits a flat valued at €200,000 from her deceased mother. Both lived in Madrid. No pre-existing wealth.
- Inherited value: €200,000
- Group II national reduction: –€47,858.59
- Taxable base: €152,141.41
- National quota (progressive tariff applied): €20,836.19
- Multiplying coefficient (Group II, wealth €0): ×1.0000
- Full quota: €20,836.19
- Madrid regional bonus (99%): –€20,627.83
- Total due: €208.37 (0.1% of the inherited value)
Example 2: Brother inherits cash in Asturias — Group III
Profile: Marcos, 45, inherits €80,000 from his brother. Asturias applies no regional bonus for Group III. Pre-existing wealth: €50,000.
- Inherited value: €80,000
- Group III national reduction: –€7,993.46
- Taxable base: €72,006.54
- National quota: €7,961.34
- Multiplying coefficient (Group III, wealth €50k → band 0): ×1.5882
- Full quota: €12,637.01
- Regional bonus: 0%
- Total due: €12,637.01 (15.8% of the inherited value)
Example 3: Grandchild aged 17 inherits in Catalonia — Group I
Profile: Alejandro, 17, inherits €150,000 from his grandfather. Catalonia applies 99% bonus for Group I (2024 reform). No pre-existing wealth.
- Inherited value: €150,000
- Group I base reduction: –€47,858.59
- Age extra reduction (21 – 17 = 4 years × €15,956.87): –€63,827.48
- Total reductions: –€111,686.07
- Taxable base: €38,313.93
- National quota: €3,554.71
- Multiplying coefficient: ×1.0000
- Catalonia bonus (99%): –€3,519.16
- Total due: €35.55
⚠️ Common mistakes
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Confusing Group I with Group II: Children aged 21 or over fall in Group II, not Group I. Only descendants under 21 qualify for the additional per-year age reduction worth €15,956.87 per year.
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Missing the 6-month filing deadline: Tax must be filed within 6 months of death (extendable to 12 months on request). Late filing without prior request triggers surcharges of 5% to 20% plus interest.
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Forgetting life insurance: Life insurance payouts where the policyholder and insured are the same deceased person are taxed under ISD, not income tax. They have a separate national reduction of €9,195.49 for Groups I and II.
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Assuming the Madrid bonus follows the heir: The 99% Madrid bonus applies when the deceased lived in Madrid for the previous 5 years, not the heir. If your parent lived in Barcelona, Catalan law applies.
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Underestimating the multiplying coefficient for Groups III and IV: Group III heirs (siblings, in-laws) already face a base coefficient of ×1.5882 even with zero pre-existing wealth. This can add 58.82% to the gross quota before regional bonuses.
💼 Special cases
Inheriting the deceased’s habitual residence
The property that was the deceased’s principal home qualifies for a minimum 95% national reduction on its value (capped at €122,606.47 per heir), provided the beneficiary is a spouse, descendant, ascendant, or collateral relative over 65 who lived with the deceased, and that the property is retained for at least 10 years.
Inheritance involving property in multiple regions
When the deceased held real estate in several autonomous communities, the entire inheritance is taxed in the region where the deceased was habitually resident during the 5 years prior to death, using that community’s legislation.
❓ Frequently Asked Questions (FAQ)
Madrid, Andalusia, Galicia, the Canary Islands, La Rioja, Murcia, and Catalonia (post-2024 reform) all apply a **99% bonus** for Group I and II heirs (children, spouses, parents). The Basque Country and Navarre have their own foral tariffs that effectively reduce the tax to near-zero for close family. In these regions, a child inheriting from a parent pays less than 1% of the inherited value.
Filing late without prior request from the tax authority triggers surcharges of **5%** (up to 3 months late), **10%** (3–6 months late), **15%** (6–12 months late), and **20%** (over 12 months late). If the tax authority contacts you before you file, it becomes a penalty of up to 150% plus interest. You can request a 6-month extension before the initial deadline expires, which suspends interest temporarily.
Yes. When the policyholder and insured person are the same deceased individual, beneficiaries pay ISD (not income tax) on the payout. A national reduction of **€9,195.49** applies per beneficiary for Groups I and II. If the regional community applies a bonus (e.g. Madrid's 99%), that bonus also applies to the life insurance portion. Life insurance held in the deceased's own name does not avoid ISD, though trust structures and specific products may have different treatment.
In Madrid, both inheritance and gifts now carry a 99% bonus for direct family, making the fiscal difference minimal. The key consideration is that when parents gift real estate while alive, they may owe income tax (IRPF) on the capital gain — the difference between what they originally paid and the current value. Inheriting the same property avoids this IRPF for the parents entirely. Financial planning advice from a tax advisor (*asesor fiscal*) is strongly recommended for large estates.
Mortgages and other verifiable debts of the deceased are deducted from the gross estate before applying reductions and the tariff. If your parent leaves a property worth €300,000 with a remaining mortgage of €150,000, the net taxable value of that property is **€150,000**, not €300,000. Funeral expenses and costs of the last illness are also deductible with documentation.
When you sell an inherited asset, income tax is calculated on the gain between the **sale price and the value declared in the inheritance** (which was already taxed under ISD). If you inherited a flat valued at €200,000 and sell for €220,000, IRPF applies only to the **€20,000 gain** at the savings tax rates (19%–28%). The date of acquisition for tax purposes is the date of death, not when the deceased originally bought the property.
Yes. The regulations allow deferral and instalment payment of ISD in certain circumstances, particularly when the estate consists mainly of illiquid assets like real estate. Standard deferral is up to **1 year**, though some communities offer longer periods. You must apply before the original deadline expires and may need to provide a guarantee depending on the amount. Interest at the legal rate applies during the deferral period.
The multiplying coefficient adjusts the tax quota based on the heir's pre-existing net wealth. For Groups I and II, it only increases above 1.0 when pre-existing wealth exceeds **€402,678**. For Group III (siblings, in-laws), the base coefficient is already **×1.5882** regardless of wealth, adding 58.82% to the gross quota automatically. This makes the coefficient especially punishing for distant relatives with moderate estates in communities that offer no regional bonus.