Madrid makes changes to inheritance tax

Starting this Tuesday, July 1st, the Inheritance and Gift Tax of the Community of Madrid will be significantly reduced. This was confirmed a couple of weeks ago by the Madrid Assembly—over the opposition of the left —and last Friday, the measure was published in the Official Gazette of the community.

Specifically, the Madrid government is increasing the tax breaks and also including in-laws. Starting this Tuesday, brothers-in-law, fathers-in-law, sons-in-law, and daughters-in-law will be able to receive tax benefits when an asset or right is transferred to them.

It is estimated that this measure will benefit some 14,000 people each year, with a total of €140 million in contributions to the coffers of the Community of Madrid.

The initiative has three key points, the most notable being the bonuses for the entire kinship group III.

In this regard, the discount for operations between siblings and between uncles and nephews by blood relationship has been increased from 25% to 50% and will apply to all Group III kinships . The Community of Madrid is the first to introduce this reduction.

Another measure contemplated by the initiative is a 100% tax discount on sporadic donations between individuals that are less than €1,000, eliminating the obligation to file a self-assessment for donations below that amount.

Finally, the requirement for a notarized document to be issued is eliminated for donations of up to 10,000 euros.

Europa Press reports an example of how the regulations are changing. Two siblings who inherit from another deceased sibling, without descendants, ascendants, or a spouse, who owned a home valued at €200,000 and savings totaling €100,000, will avoid paying more than €15,600 each on the unsubsidized tax.

In this way, the Community of Madrid continues its commitment to tax cuts , this being the 32nd since 2019, the year Isabel Díaz Ayuso was sworn in.