Every gift of money received in Spain is subject to Inheritance and Gift Tax, regardless of the amount and regardless of whether the person giving the money lives abroad. There is no exempt minimum. The good news is that the final cost depends on the region, and in the Community of Madrid gifts between parents and children or between spouses carry a 99% reduction of the tax due, which means a gift of 100,000 euros results in a tax bill of roughly 124 euros rather than several thousand. The return must be filed within 30 business days of the transfer.
In this guide, updated for 2026, our Spanish gift tax lawyers explain who has to pay, which regional rules apply, how a family loan differs from a gift and how to document both correctly. With more than 13 years of practice and 2000 cases handled, we have managed transfers into Spain from The United States, Venezuela, Mexico,Argentina, Italy, Bolivia, Peru, the Czech Republic, Russia, France, the United Kingdom and Brazil, among others.
Who has to pay gift tax in Spain?
The tax is always paid by the recipient, never by the person making the gift. Two situations need to be distinguished:
- The recipient is resident in Spain. They are taxed under what Spanish law calls personal liability, which covers gifts received from anywhere in the world. This is why money sent by parents living abroad is taxable in Spain when the child lives here.
- The recipient is not resident in Spain. They are taxed under real liability, which covers only assets located in Spain, such as money held in a Spanish bank account or Spanish real estate.
One point that matters a great deal to foreign clients: since 2021, non-residents are entitled to the same regional reliefs as residents, and this applies to residents of non-EU countries as well. For years the Spanish authorities denied those reliefs to non-residents, until the Court of Justice of the European Union and the Spanish Supreme Court ruled otherwise. If you were taxed as a non-resident without regional relief in the past, it may be worth reviewing whether a refund can still be claimed.
Which region’s rules apply to your gift?
This question decides how much you pay, because the difference between regions can run into thousands of euros. As a general rule:
- Gifts of money to a resident: the rules of the region where the recipient has lived the greatest number of days over the previous five years.
- Gifts of Spanish real estate: the rules of the region where the property is located, whether the recipient is resident or not.
- Gifts of money located in Spain to a non-resident: the rules of the region where the funds have been held for the greatest number of days over the previous five years.
Cash gifts in the Community of Madrid
Madrid is one of the most favourable regions in Spain. Gifts between close relatives, meaning spouses, children, grandchildren, parents and grandparents, benefit from a 99% reduction of the tax payable.
It is worth being precise here, because this is widely misunderstood. The 99% reduction applies to the tax calculated on the gift, not to the amount of the gift itself. Take a gift of 100,000 euros from a parent to a child: the tax under the regional scale comes to approximately 12,407 euros, and after the 99% reduction the amount actually payable is around 124 euros. Someone who mistakenly applies the 1% to the gift itself would expect a bill of 1,000 euros, which is eight times too high.
There is an even better outcome where the money is used to buy a home. Madrid grants a 100% reduction on up to 250,000 euros of money given to a child to purchase their habitual residence, provided that:
- The gift is formalised in a public deed before a notary.
- The origin of the funds is properly documented.
- The deed states expressly that the money is intended to buy the recipient’s home.
Is there a minimum amount below which nothing is due?
No. There is a persistent myth that gifts of up to 3,000 euros are free of tax and paperwork. That is simply not the case: any amount is a gift and must be declared, and the tax is calculated from the first euro.
Madrid has introduced one narrow exception. Since July 2025, gifts of up to 1,000 euros carry a 100% reduction and do not require a self-assessment return, unless the asset given must be registered in a public register. Beyond that threshold, the return has to be filed even when the tax due is minimal.
Is a loan from parents to children treated as a gift?
Not if it is a genuine loan, properly documented. Lending money within the family is entirely lawful and, when done correctly, it costs nothing in tax. The problem arises when people describe a transfer as a loan simply to avoid the gift tax, without any of the formalities. In that case the Spanish Tax Agency can re-characterise the transaction as a disguised gift and demand the tax plus interest and a penalty.
The essential difference is straightforward: a loan has to be repaid, a gift does not.
How to document a family loan correctly
Here we need to correct a very common misunderstanding: a loan between private individuals does not require a notary. A private contract signed by both parties is perfectly valid under Spanish law. What is genuinely compulsory is the tax filing. The steps are these:
- Draw up a written loan agreement identifying both parties, the amount lent, the repayment schedule, the repayment deadline and, where applicable, an express statement that no interest is charged.
- Transfer the money by bank, ideally with a payment reference such as “loan under agreement dated …”.
- File form Modelo 600 with the tax authority of the relevant region within 30 business days, claiming the exemption under article 45.I.B.15 of Royal Legislative Decree 1/1993.
- Keep evidence of the repayments throughout the life of the loan.
Loans are subject to Transfer Tax but fully exempt from payment, so the filing itself costs nothing. The catch is that the exemption only works if the transaction is declared. Failing to file does not trigger tax immediately, but it leaves the door open for the tax authorities to treat the money as a disguised gift later on. You can read our detailed Spanish guide on Modelo 600 for interest-free loans between individuals.
Interest-free loans: what to watch out for
A family loan can perfectly well be interest-free, but two points deserve attention. First, Spanish tax law presumes that loans are remunerated unless the contrary is proved, so the agreement must state expressly and in writing that no interest accrues. Second, and more important in practice, the repayment schedule has to be genuinely honoured. A loan that is documented impeccably and then never repaid will be treated as a gift, and filing Modelo 600 does not protect you from that outcome. If circumstances change and the debt is forgiven, that forgiveness is itself a gift and must be declared.
How do I prove that a cash gift is legitimate?
Documenting the transfer properly is what keeps the reliefs safe. In practice we rely on:
- Bank statements identifying the account of origin, the receiving account and the transfer itself. Cash handed over in person is almost impossible to defend.
- The public deed signed before a notary, where one is required.
- The filed tax return and proof of payment.
- Evidence of the source of the funds, particularly where the money comes from abroad, since banks apply anti-money laundering checks and may block or return transfers that are not properly explained.
Do you need a notary to make a cash gift?
Not always, and the rules changed recently. Under the Spanish Civil Code, a gift of money can be made in a private document. What a notarial deed does is give access to the regional tax reliefs, which is where the real money is.
Since July 2025, Madrid no longer requires a public deed to apply the reduction where the taxable amount does not exceed 10,000 euros, adding together gifts between the same two people over the previous three years. Above that figure, and in any event where real estate is involved, a public deed remains essential. Gifts of property are void without one.
Our practical advice is unchanged for anything but very small sums: the cost of the deed is modest compared with losing a 99% reduction.
Should the money be transferred before or after signing the deed?
The transfer is normally made before attending the notary, so that the deed can refer to a transfer that has already taken place and identify it precisely. What matters most is the deadline: the tax return must be filed within 30 business days from the date of the gift. Missing that deadline can mean losing the reliefs and facing surcharges.
Legal requirements for making a lifetime gift
To make a valid gift in Spain, the person giving must be of legal age and have full legal capacity, must accept that gifts of real estate require a public deed, and must respect the forced heirship rules of Spanish succession law. This last point is often overlooked by foreign clients: Spanish law reserves a portion of the estate for certain close relatives, and a lifetime gift that eats into that reserved portion can be reduced after death at the request of the heirs affected.
How we can help
We determine which regional rules apply to your situation, calculate the tax before you commit to anything, advise on whether a gift or a loan suits you better, prepare the documentation, coordinate the notary and file the returns on time, including for clients sending money into Spain from abroad. Our 92% success rate and an average client rating of 4.6/5 reflect how we work. Send us the details of your transaction and we will tell you exactly where you stand.
Frequently asked questions about gift tax in Spain
How much is gift tax in Spain?
It depends entirely on the region and on the family relationship. In the Community of Madrid, gifts between parents and children benefit from a 99% reduction, so a gift of 100,000 euros results in a bill of roughly 124 euros. In Catalonia, by contrast, the same gift is taxed at a reduced rate starting at 5%, which comes to about 5,000 euros. The tax is always paid by the person receiving the money.
Do I pay Spanish gift tax if my parents live abroad?
Yes. If you are resident in Spain, you are taxed on gifts received from anywhere in the world, so money sent by parents living in another country is taxable here. The residence of the person giving the money does not exempt the transaction. Very few of Spain’s double taxation treaties cover inheritance and gift tax, so relief for tax paid abroad has to be assessed case by case.
Can non-residents claim the regional reductions?
Yes. Following rulings of the Court of Justice of the European Union and the Spanish Supreme Court, and the legislative change made in 2021, non-residents are entitled to the same regional reliefs as residents, including those resident outside the European Union. Anyone who paid Spanish gift tax as a non-resident without applying these reductions should check whether a refund can still be claimed.
Does a family loan have to be signed before a notary?
No. A private written agreement between the parties is valid and sufficient. What is compulsory is filing form Modelo 600 with the regional tax authority within 30 business days, claiming the statutory exemption. The filing costs nothing, but without it the tax authorities may later treat the money as a disguised gift. A notarial deed is optional and simply adds certainty as to the date.
Is there a tax-free amount for gifts in Spain?
There is no general exempt minimum, and the widely repeated idea that gifts below 3,000 euros are free of tax is incorrect. Every gift must be declared and is taxed from the first euro, although regional reductions often leave the amount payable close to zero. Madrid applies one limited exception, exempting gifts of up to 1,000 euros from the filing obligation.
What happens if I do not declare a gift in Spain?
If the tax authorities detect the transfer, you lose the regional reductions and face the full tax, late payment interest and a penalty of between 50% and 150% of the amount not paid. The transfer may also be treated as an unjustified capital gain in your personal income tax, which is taxed at considerably higher rates. Filing voluntarily before any enquiry begins avoids the penalty altogether.
