At the very beginning of 2019, Madrid approved a bill that would mean giving 135 million euros of savings related to tax payments to its citizens.
Among other measures, the bill will give a discount of 15% to the siblings receiving an inheritance, and 10 % to uncles/aunts and nieces/nephews. Furthermore, donations of below €250,000 to a son or daughter in order to help them to buy a house or entrepreneur a new business will be also free of charge.
Madrid always has been one of the autonomous communities with lower taxes in Spain, and these changes continue down the same path. The savings forecasted due to these changes are 38.3 million euros for Madrid’s citizens.
There is also good news for those who are not inheriting. Buying a second-hand house will have a 10% reduction in patrimony-transfer tax payments.
2019 is an important political year in Madrid, because there will be an election, which of course brings lower taxes and many promises. No matter what your political ideas may be, it is important to keep yourself updated in order to take advantage of the changes that may benefit you. Take into consideration that, before the elections, governments tend to benefit the people so that they are happy at the time to vote. It is also typical that the new government revert some of these changes just a few months later, especially if there is a change in the winning party.
Of course, you cannot inherit if the owner is not dead, but you can check whether a donation may be interesting or not.
Other cases in which you may be entitled to a succession tax reduction in Madrid:
- Handicapped people: A doctor should state the level of disability to obtain discounts up to 153,000 euros.
- Life insurance: The first 9,200 euros are free of tax for a widow/er, descendants, or ascendants.
- Home: 95% of the tax related with the property in which the heir lives if the person has been living with the deceased since two years or more before the death.
- Company: Reduction of 95-100% tax for widow/er, descendants, or ascendants.
These are the most common cases. However, each of them may have different requirements in order to be valid. If you are facing a probate in Spain and want to do everything right, but without extra payments relating to taxes, call us and we will be happy to assist you with everything.