Inheritance tax Spain: what parents can give their children — and where the real limit sits
"Can I give my children something if we mortgage our property in Spain?" Yes. Inheritance tax Spain non residents actually owe is, for most families, almost no obstacle at all. The limit that actually matters sits elsewhere — and that's exactly what this page explains.
In short
Does my child pay Spanish tax as a non-resident?
Yes, but usually very little: the rules of the region where the property sits apply, and for parents and children that comes to close to zero in most regions.
Does that make the transfer cheap?
For the Spanish side, yes. The German side is independent: without a double-taxation treaty Germany taxes the worldwide estate — what Spain doesn't levy can't be credited in Germany.
How does the mortgage fit in?
The released capital is tied to Spain, not to a purpose — purchase, renovation, new build or a gift, each evidenced. For the age rule the child needs at least a 10% ownership share on the title.
As a German family, do we pay Spanish inheritance or gift tax on a property in Spain?
Usually very little, if the recipient is a child, spouse or parent — but that is rarely the number that decides the case. For non-residents, Spanish law lets you apply the tax rules of the region where the property sits, not the region of residence. In the Balearics, Comunitat Valenciana, Andalusia and the Canary Islands, that regional bonus reduces the Spanish share for parents and children to close to zero. Catalonia is the exception: a declining allowance and, for gifts, a reduced tariff instead of a blanket cut. None of this settles the German side. There is no double-taxation treaty between Germany and Spain for this tax, so Germany taxes the worldwide estate with German allowances, crediting only the Spanish tax actually paid — and where Spain has taken almost nothing, there is almost nothing to credit. That is usually the number that matters, and it is also why lifetime transfer, not just inheritance, is worth planning for.
This page is for parents and children
This is specifically about the parent–child constellation: spouse, descendants, ascendants. Siblings, uncles, nieces and nephews are a different case with different rules — this page isn't written for that.
And it's about a specific question: how does the case work where a parent mortgages a paid-off property in Spain so a child can buy — or so their own next property gets financed? What happens tax-wise, in Spain and in Germany, is set out here. What the mortgage itself requires is on the overview page for mortgaging existing property.
Which region decides — not where the family lives
For residents in Spain, the applicable tax region follows their place of residence. For a German family owning property in Spain, a different rule applies: Spanish law lets a non-resident apply the regulation of the Autonomous Community where the property is located — for a gift that's simply where the property sits, for an inheritance it's the region holding the highest value of the Spanish assets. This rule followed a ruling of the European Court of Justice (03.09.2014) and was later extended to non-EU citizens too.
The property decides, not where the family lives. That's the first point most people have backwards — and the reason this page is structured by region.
What the region takes — as of July 2026
The reference case throughout is parent–child (Groups I and II: descendants, spouse, ascendants). In most of our regions it comes down to the same answer: next to nothing, against a notarial deed and proof of where the funds came from. Catalonia is the exception.
Compare regions directly in the inheritance tax calculator
| Region | Inheritance | Gift | Condition |
|---|---|---|---|
| Balearics (Mallorca, Ibiza, Menorca) | 100% relief, since 18.07.2023 | 100% relief, only since 25.07.2025 | Notarial deed for gifts; no explicit non-resident clarification found for gifts specifically — confirm with a tax adviser |
| Comunitat Valenciana (Costa Blanca, Valencia) | 99% relief, retroactive to 28.05.2023 | 99% relief | Notarial deed and traceable origin of funds |
| Andalusia (Marbella, Costa del Sol) | 99% relief, since 11.04.2019, no cap | 99% relief | Notarial deed mandatory, otherwise no relief |
| Canary Islands (Tenerife, Gran Canaria) | 99.9% relief, since 06.09.2023, no cap | 99.9% relief | Notarial deed; lapses if the same recipient already used it in the previous three years |
| Catalonia (Costa Brava) | No flat relief. Spouses 99%; descendants under 21 from 99%. Adult children and parents: weighted rate starting at 60%, falling to about 28.9% at €3m (since Ley 5/2020) | No relief on the tax due — a reduced own tariff of 5–9% instead | The reduced gift tariff only applies with a notarial deed, otherwise the full tariff applies |
| Comunidad de Madrid | 99% relief, since 2007 | 99% relief | Notarial deed; since Ley 2/2025 not required up to a taxable base of €10,000, unless the asset itself requires one — so always for property. For cash gifts, the source of funds and the transfer route must be evidenced |
| Región de Murcia (Costa Cálida) | 99% deduction, since 01.01.2018 | 99% deduction | On inheritance only groups I and II — siblings and nephews pay the full tariff there; on gifts the deduction also extends to group III |
Regional tax law changes; this overview does not replace tax advice or a calculation for your specific case. Reviewed quarterly.
The less Spain takes, the more is left for Germany
There is no double-taxation treaty between Germany and Spain for inheritance and gift tax. If the donor, the deceased or the recipient is resident in Germany, German unlimited tax liability applies to the worldwide estate — the Spanish property included — with the German allowances of €400,000 per child every ten years.
Relief comes only via §21 ErbStG: the tax actually paid in Spain gets credited, but only up to the amount of German tax that falls on that asset. And here's the point almost nobody says out loud: where Spain takes next to nothing — as in the Balearics, Valencia, Andalusia or the Canary Islands — there is next to nothing to credit. The Spanish tax was never the problem. The relief of "Mallorca doesn't tax it" is therefore usually premature — it's referring to the wrong one of the two taxes.
The German limit is therefore the actual bottleneck — not the Spanish region. That's the reason to plan the timing of the transfer, rather than waiting for the inheritance case.
When the wealth sits in the property and nobody wants to sell
The typical constellation: the property in Spain has been paid off for years. Nobody wants to sell — not to give the child something, not to work around the German allowance limit either. That's exactly what mortgaging existing property is for: a parent mortgages their own, paid-off property, and the released capital is used in Spain — for the child's purchase, the parents' own next one, a renovation or a new build, and equally as a gift to the child. What is tied is the country, not the purpose: the few banks that underwrite this product for non-residents at all require evidence of the use in Spain, and the funds may not leave the country.
Two points make the case additionally workable. The loan normally has to be repaid by the borrower's 75th birthday — but where there are two borrowers, the age of the younger one counts. If the child co-signs as co-borrower with their own equity share on the title (minimum 10%), the term follows their age instead of the parents'. And the use of funds is tied to Spain, not to a single purpose — the capital must stay in Spain and be evidenced, but can flow into different forms of property acquisition.
This typically becomes relevant from around half a million euros in total financing — below that, except with very strong income, the effort rarely pays off for anyone involved.
Frequently asked
Does my child, as a non-resident, pay Spanish tax at all?
If the Spanish tax is close to zero, does that make the transfer cheap?
Can we just transfer the mortgage money to our child freely?
Does our child need to be on the title, or is co-signing enough?
From what size does this make sense?
Can you calculate how much tax we'd save?
Want to give your child something without selling?
Send us the key figures — the property, the size, who should be involved. We'll tell you whether the structure works for your case, and point you to the right adviser for the tax side.
Discuss your caseDetails on the mortgage itself: Mortgaging existing property in Spain. If a sale is on the table instead of a gift, the gain is taxed — see Capital Gains Tax in Spain. Practical examples: Inheritance & gifts — cases from practice.