Spanish Inheritance Tax by Region: A Practical Comparison

Why the applicable region is the most important fiscal decision in an inheritance

Spanish Inheritance and Gift Tax (ISD) is regulated at state level but its revenue is transferred to the Autonomous Communities, which have wide powers to introduce reductions, reliefs and modify rates. The practical consequence is that the same inheritance can have a radically different tax cost depending on the applicable region. It is common for two sibling heirs of the same parent to pay very different amounts if one inherits in a region with generous reliefs and the other accepts after a regulatory change.

In practice we see that the first question to resolve is not "how much will I pay" but "which regional rules apply to me". Once that is fixed, the calculation becomes much simpler.

How the applicable Autonomous Community is determined

The basic rules are:

• If the deceased was a Spanish resident: the rules of the region where they had their habitual residence during the five years prior to death apply.
• If the deceased was a non-resident: the rules of the region where the highest-value asset of the estate is located apply (typically a property).
• If both heir and deceased are non-residents: after the European case-law evolution, the heir may apply the regional rules that would correspond under the rules above.

Note that the applicable regime is determined according to the rules in force at the date of accrual of the tax (the date of death), not at the date of filing.

Catalonia: rates, reductions and reliefs

Catalonia has its own structure: it applies a progressive tariff and a kinship-based relief system that is tiered according to the taxable base. It is one of the regions with the most particular tax treatment, and unlike territories where the relief is a flat 99%, here the applicable percentage adjusts according to the inherited amount.

Indicative summary (always according to the rules in force at the date of accrual):

• Kinship reduction for Groups I and II with specific amounts.
• Additional reduction for Group I heirs (descendants under 21) based on age.
• Reduction for acquiring the deceased's primary residence with maintenance requirements.
• Reduction for acquiring a family business or shareholdings, with specific conditions.
• Kinship relief with a percentage that varies by taxable base: the applicable percentage decreases as the base increases.
• Special rules for persons assimilated to relatives (stable couples, foster situations).

Catalonia falls under the Catalan Tax Agency (Agència Tributària de Catalunya), which has its own electronic filing system. We covered the detail in the specific guide on Inheritance Tax in Catalonia, where we explain the nuances of the tiered reliefs.

Andalusia: 99% relief for Groups I and II

Andalusia provides a 99% relief on the Inheritance Tax liability for Group I and II heirs, subject to the requirements set by the regional rules in force at the date of accrual. It is one of the regions with the most favourable treatment for direct relatives.

Beyond the 99% relief, Andalusia maintains specific reductions for the deceased's primary residence and for family business or shareholdings. For Group III heirs (siblings, uncles, nieces), the treatment is less favourable and each case should be reviewed.

Detail in the specific guide on Inheritance Tax in Andalusia.

Valencian Community: 99% relief for Groups I and II

The Valencian Community provides a 99% relief on the Inheritance Tax liability for Group I and II heirs, subject to the requirements set by the regional rules in force at the date of accrual. The Valencian relief is relatively recent and the regime applicable at the date of death should be confirmed.

The Valencian Community maintains primary-residence and family-business reductions similar in structure to those in other territories, with their own particularities. Treatment for Group III heirs follows a less favourable logic.

Detail in the specific guide on Inheritance Tax in the Valencian Community.

Galicia: specific reductions and a recent relief

Galicia has been reforming its regional rules to move closer to the favourable treatment of other regions for inheritances between direct relatives. It applies its own kinship reductions for Groups I and II and a relief on the tax liability whose amount and requirements should be reviewed under the rules in force at the date of accrual.

It maintains specific reductions for the deceased's primary residence and for family business or agricultural holdings, the latter being particularly relevant in rural Galicia, where a significant part of the estate may be linked to agricultural or forestry activities. Reductions for agricultural holdings often come with specific maintenance requirements.

Balearic Islands: zero rate and reliefs for Groups I and II

The Balearic Islands apply a notably favourable system for Group I and II heirs, with reductions and reliefs that often bring the effective tax to very low or near-zero amounts. This makes it one of the regions with the lightest tax burden on inheritances between direct relatives, subject to the requirements set by the regional rules in force at the date of accrual.

The regime for Group III is less favourable, and for Group IV (strangers or very distant relatives) the taxation approaches the state regime without the more generous regional reliefs. Each case should be reviewed, particularly when there are valuable real-estate assets.

Canary Islands: 99.9% relief on the tax liability

The Canary Islands apply a relief very close to 100% on the tax liability for Group I and II heirs, according to the regional rules in force at the date of accrual. It is one of the territories where inheritance between parents and children or between spouses tends to result in very light taxation, in line with other island and mainland regions with favourable treatment.

It also keeps specific reductions and applies its own nuances depending on the type of asset acquired. For Group III, the treatment is more restrictive and each case should be reviewed to know the actual scope of the applicable reliefs.

Practical comparison: in which region does a child heir pay less?

On a purely qualitative basis, Group I and II heirs (children, spouses, ascendants, descendants) tend to face a very light or near-zero tax burden in regions such as Madrid, Andalusia, the Valencian Community, the Canary Islands and the Balearic Islands. Catalonia applies a tiered system that produces significant differences depending on the inherited amount. Galicia has moved in recent years towards a more favourable regime for direct relatives.

For Group III heirs (siblings, uncles, nephews), differences between regions are even more pronounced. Madrid has applied a 50% relief for Group III since July 2025, placing it among the most favourable options also for collateral relatives.

Note that any specific numerical comparison requires knowing the taxable base, the applicable reductions and the specific family situation. In practice, a generic calculation rarely matches reality exactly. Two inheritances of similar amount in the same region may produce different liabilities if they differ in the composition of the estate (for example, the weight of the primary residence or business shareholdings) or in the heir's personal circumstances (age, recognised disability).

It is common for clients to ask "in which region will my parent pay less". The correct answer is that the deceased does not choose: the legal rule determines the applicable region. Genuine planning prior to death (a real, not artificial change of residence with sufficient time) is possible. Any move close to death may be reviewed by the administration.

On the state-level minimum reductions that apply in every region, see our guide on state reliefs in Spanish Inheritance Tax: regions can improve them but not eliminate them.

How GESTISYD can help

• We identify which region is competent for your inheritance.
• We apply the regional reductions and reliefs that fit your case.
• We review cross-regional cases (deceased in one region, assets in others).
• We work in Spanish and English, with experience in cross-border inheritances.