Inheritance and gifts of property: how much do I pay?

What is the difference between an inheritance and a gift? What taxes are payable and where? In this article we will answer all these common questions.

Firstly, it should be mentioned that the main difference between the two is that inheritance implies the death of the owner of the property and the heir or heirs receive the property by will or by law as part of the legitimate inheritance that is due by right.

Donation, on the other hand, is made during life and involves a change of ownership of the property. Another substantial difference is that the donation can be scalable, i.e. the transferor can transfer the property but keep the usufruct, and this decision is reversible.

In 2022, more than one million transfers of property rights took place, 60.8% were sales and purchases, 21.2% inheritances and 18.5% donations, according to INE data.


Both formulas require taxation. While inheritance is taxed in the region where the transferor lives, donation is taxed in the place where the property is located.

  • Gift and inheritance tax. This is progressive (the greater the inherited wealth, the higher the tax rate); personal (paid by the person receiving the inheritance) and direct (levied on the estate), according to a BBVA report.

Likewise, the collection of this tax corresponds to the autonomous communities, so the amount varies from one territory to another, and there is also a difference between the degree of kinship, with ascendants, descendants and spouses being the most exempt group, in general.

In the Balearic Islands the tax rebate is 100%, while in the Canary Islands it is 99.9%. In other communities such as Madrid it is 99%; and other autonomous regions set limits depending on the amount inherited, as is the case in Catalonia where nothing is paid if the amount to be inherited is less than 100,000 euros for spouses or descendants under 21 years of age, in Andalusia descendants and spouses are exempt from tax up to one million euros.

  • Municipal capital gains tax. This is the value that the property has gained since it was purchased until the time of transfer. It is payable by the heirs or recipients of the donation. The amount is usually between 10% and 20% of the cadastral value of the property.
  • Personal income tax. This only applies to donations unless it is the habitual residence and the donor is over 65 years of age. The donor would have to pay between 19% and 32% depending on the profit generated since the purchase.
  • Land Registry Fee. Corresponding to the registration of the title deed of the property.

As mentioned above, taxes are compulsory, however, it should be noted that if the inheritance is divided, the amount is reduced; it can also be paid in instalments or by applying for a mortgage loan through a financial intermediary.

Selling the inherited or donated property

This is usually the first option if the aim is to obtain liquidity and, above all, if there is more than one heir, as it is usually the best way to share the income. If you opt for renting the property, this decision implies long-term benefits from the profitability, but entails multiple steps that the heir or heirs will have to assume or pay a specialised company to delegate them.

If you are considering selling your property with Homes by Gestilar you will be interested to know that we take care of all the paperwork, contract and signing at the notary’s office for your convenience. In addition, we are committed to a fast process, so you will receive an online valuation without obligation after contacting us; and after a virtual visit in 72 hours we will make you the first offer.