If you are an ex-pat with assets in the Baleares we have great news for you.
It now boasts the Lowest inheritance tax in Spain.
On the 18/7/2023 “The President of the Government, Margalida Prohens, announced:
Fiscal Reform Decree Law for the abolition of the inheritance and gift tax (ISD) between parents and children, grandparents and grandchildren, and between spouses, as well as a reduction of up to 50% between siblings and between uncles and nieces/nephews, in the Balearic Islands.
The Decree eliminates the payment of the inheritance and gift tax between parents and children, grandparents and grandchildren, and spouses.
In the case of inheritances between siblings or between uncles and nieces/nephews where the deceased person has no descendants, the reduction will be 50%, and in the case of having descendants, the reduction will be 25%. The reform applies both to inheritances due to death and to inheritances under the so-called succession agreements or life inheritances specific to the civil law of the Balearic Islands.”
PRO TIP
These special reductions introduced by the regional government of the Balearic Islands for their own residents are also available for non-resident beneficiaries, even though as non-residents they present their tax return to the national tax office. Example: if you live in London and inherit your mother’s villa in Ibiza, as a non-resident you have to present your inheritance tax clearance documents to the national tax office (where the rate is much higher), but you are allowed to claim the exemptions available in the region of Spain where the assets are situated if they are more beneficial. Therefore, you claim the Balearic exemptions on the national tax office forms and get clearance with 0 tax payable.
How much is inheritance tax in Mallorca , Ibiza , Formentera and Menorca ?
The inheritance tax for spouse , children (remember they need to be your own children and not just spouses children ), parents and grandchildren is 0 euro.
The inheritance tax for siblings in the Baleares is 50% of what it was before and of what it is in most other regions of Spain
Remember that if you are the beneficiary of an estate in the Balearics and are a non-resident of Spain you can claim these regional exemptions even though you present your return to the national tax office and not the regional government.
