Gifting Property in Spain: the Donation Tax, Andalucia Bonificacion and Inter Vivos Transfers (2026)

Gifting a Spanish property to a family member during your lifetime is a recognised legal route, but it is not a tax-free one. A lifetime donation (inter vivos transfer) triggers the Impuesto sobre Sucesiones y Donaciones (ISD), the same tax that applies on death, and the donee, not the donor, is the one who pays it. In Andalucia, however, a 99% bonificacion on the tax cuota for direct family gifts means the effective bill is a fraction of the state tariff, provided the gift is formalised correctly in a public deed.

What tax applies when you gift property in Spain?

A lifetime gift of Spanish property is an inter vivos acquisition under the Impuesto sobre Sucesiones y Donaciones (ISD), the tax governed by the state framework in Ley 29/1987 and layered with regional rules. The state law sets the progressive tariff and the four kinship groups that determine the rate, while each autonomous community, including Andalucia, can add its own reductions, multipliers and bonificaciones on top. The donee (the person receiving the gift) is the taxpayer, not the donor, and the tax is calculated on the market value of the property transferred.

The state ISD tariff is progressive and can be steep. Without any regional relief, a EUR 500,000 property gifted to an adult child would generate a cuota in the tens of thousands of euros, because the state tariff scales from 7.65% on the first EUR 7,993 up to 34% on slices above EUR 797,555, before kinship multipliers are applied. This is why the regional bonificaciones matter so much: they are the difference between a meaningful bill and a token one. Our inheritance tax guide covers the mortis causa side of the same tax, including the same Andalucia 99% relief that applies on death.

How does the Andalucia 99% bonificacion work for gifts?

Andalucia applies a 99% bonificacion on the ISD cuota for gifts between Group I and II relatives, in force since 11 April 2019 (originally under Decreto-ley 1/2019 and now consolidated in article 40 of Ley 5/2021). The bonificacion covers donations and any other gratuitous inter vivos transfer, and the Junta de Andalucia’s tax agency ATRIAN publishes the full schedule of qualifying cases on its bonificacion-donaciones page. The relief cuts the cuota by 99%, leaving the donee to pay roughly 1% of the tax that the state tariff alone would produce.

Two conditions are non-negotiable. First, the gift must be formalised in a public deed (escritura publica) before a Spanish notary. A private document or a bank transfer does not trigger the bonificacion, which is why informal family transfers end up paying the full state tariff if the tax office discovers them. Second, where the gift involves cash rather than property, the donee must justify the origin of the funds. The Junta’s ATRIAN guidance lists the specific documentation required, and the cases index on the bonificacion page shows how the tax office interprets the rule across situations from spousal property gifts to foreign cash donations requiring a Hague Apostille.

The kinship groups that qualify come from article 20 of the state ISD law (Ley 29/1987). Group I covers descendants under 21, Group II covers descendants aged 21 and over, ascendants and the spouse. Registered parejas de hecho in Andalucia are assimilated to spouses under the article 26 equiparacion rules, so a registered partner qualifies for the same 99% relief as a married spouse. Group III collateral relatives (siblings, nephews, nieces) and Group IV non-relatives do not qualify for the bonificacion, so they face the full state tariff multiplied by a higher kinship coefficient.

What reductions apply on top of the bonificacion?

Gift type	Reduction	Key conditions	Max base
Cash to under-35 descendant for habitual home	99% of base	Donee under 35, property in Andalucia, retained 3 years	EUR 150,000 (EUR 250,000 if disabled)
Property (home) to under-35 descendant	99% of base	Donee under 35, retained as habitual home 3 years	EUR 150,000 (EUR 250,000 if disabled)
Cash for business or professional setup	99% of base	Used within 6 months, activity in Andalucia, retained 3 years	EUR 1,000,000
Group I/II gift (general)	99% of cuota	Public deed, funds origin justified	No base cap

The first three rows are base reductions (they cut the taxable base before the tariff is applied), while the fourth is the cuota bonificacion that cuts the final tax. They can combine in the right circumstances: a cash gift to an under-35 child buying an Andalucia home to use as their habitual residence benefits from both the base reduction and, on any remaining cuota, the 99% cuota bonificacion. The first-home requirement was suppressed, so the reduction applies to any property destined as the donee’s habitual home. The ATRIAN benefits page sets out the full requirements, including the age, disability and retention conditions, and the rule that multiple gifts from the same donor are aggregated against the cap.

Can a non-resident donee claim the Andalucia bonificacion?

Yes, and this is the point that most foreign owners misunderstand. A non-resident receiving a gifted Andalucia property applies the same regional bonificacion as a resident, following the equal-treatment principle established by the Court of Justice of the European Union and implemented in Spain through Ley 26/2014. The connection point for inter vivos gifts is the location of the gifted asset, so a property in Andalucia routes the donee into the Andalucia regional rules regardless of where the donee lives.

The CJEU’s 2014 ruling in Commission v Spain (Case C-127/12, decided 3 September 2014) held that taxing non-residents under the state ISD rules while letting residents apply their regional bonificaciones breached the EU freedom of movement of capital. Spain responded with Ley 26/2014, which lets non-residents apply the regional legislation where the connection point applies. The Spanish tax administration has since extended the principle to non-EU donees on free-movement-of-capital grounds, so a UK, US or Norwegian child receiving a Marbella property gift claims the same 99% bonificacion as a resident child in Malaga. The practical mechanism is the same as for inheritances, where the connection point is the asset location rather than the heir’s residence.

What is the filing process and deadline for a property gift?

The donee files Modelo 651, the self-assessment form for ISD on inter vivos acquisitions, with the Agencia Tributaria. The filing deadline is two months from the day after the donation deed is signed, under the Andalucia rule for facts imponible devengados from 1 January 2022 (the state deadline is 30 working days, but the Andalucia regional rule extends it to two months with no extension possible). This is still shorter than the six months allowed for inheritances on death. Non-residents file with the National Tax Management Office for Non-Residents in Madrid, not the regional Andalucia tax office, and non-resident donees outside the EU/EEA must appoint a Spanish tax representative (representante fiscal) to handle the filing. EU/EEA residents in countries with mutual assistance agreements on tax information and recovery are exempt from this requirement.

The process in practice is: the donor and donee sign the escritura publica de donacion before a Spanish notary, the notary issues the deed, and the donee (or their representative) files Modelo 651 within two months, self-assessing the tax due after applying the bonificacion and any base reductions. The property then needs to be registered in the donee’s name at the Land Registry using the notarised deed. If the property is mortgaged, the lender’s consent is needed for the transfer, and the donee may need to refinance or assume the debt, a point the Junta’s cases index covers under donation of mortgaged property.

How does gifting compare to inheriting the same property?

Both routes trigger ISD, and both can attract the 99% Andalucia bonificacion for Group I and II transfers, so the tax difference is often smaller than owners assume. The real distinctions are procedural and strategic. A lifetime gift requires a public deed and a Modelo 651 filing within two months, while an inheritance files Modelo 650 within six months of the death, a longer and less pressured window. A gift transfers ownership immediately, which means the donor loses control and use of the property, while an inheritance only passes on death.

Factor	Lifetime gift	Inheritance on death
ISD applies	Yes (inter vivos)	Yes (mortis causa)
Andalucia 99% bonificacion	Yes, Groups I/II, public deed	Yes, Groups I/II
Filing form	Modelo 651	Modelo 650
Filing deadline	2 months (no extension)	6 months (extendable)
Donor retains control	No	Yes, until death
Public deed required	Yes (escritura publica)	Notary deed of acceptance
Non-resident filing	Madrid non-resident office	Madrid non-resident office

The choice usually turns on succession planning, not on the ISD rate. A donor who wants to keep living in the property should not gift it, because the transfer is irrevocable. A donor who wants to simplify probate for a non-resident heir may prefer to gift now, accepting the earlier tax event to avoid a cross-border inheritance process later. Our non-resident inheritance process guide covers the mortis causa route in detail, and our Spanish will guide explains why a will remains useful even when a lifetime gift is planned.

What should a foreign owner check before gifting?

Three things matter beyond the ISD itself. First, the donor’s home country may tax the gift or the deemed disposal independently of Spain, so a UK donor gifting a Spanish property may face UK capital gains tax on the transfer, as the property is treated as disposed at market value. Second, the property must be free of encumbrances that block transfer, or the lender must consent, which is why the Junta’s cases index includes specific guidance on mortgaged property gifts. Third, the donee needs a NIE (foreigner tax number) to file Modelo 651 and register the property, and non-resident donees outside the EU/EEA need a Spanish tax representative.

The bonificacion is generous but conditional. Miss the public deed requirement, or fail to justify the origin of gifted funds, and the relief falls away, leaving the full state tariff. File Modelo 651 late, and surcharges apply. The safest approach is to treat the gift as a notarised transaction with professional support, not as an informal family arrangement, and to take tax advice in both Spain and the donor’s home country before signing the deed.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.