One of the most common misconceptions among our Nordic and international clients concerns lifetime gifts of Spanish property. Many parents who wish to transfer their home to their children during their lifetime assume that the only tax involved is the Gift Tax (Impuesto sobre Donaciones) paid by the recipient. This is incorrect. Spanish law treats every donation as a disposal for income-tax purposes, which means the donor must also declare and pay tax on any capital gain — even though he or she received no money in return.
Why is the donor taxed?
Articles 33–36 of the Spanish Personal Income Tax Act (LIRPF) for residents, and article 13 of the Non-Resident Income Tax Act (LIRNR), treat a gift as equivalent to a sale. The tax is calculated on the difference between the acquisition value (the price paid when the property was purchased, plus taxes and incidental costs) and the transfer value (the market value on the date of the gift, typically the value declared in the deed). The fact that no money has changed hands is irrelevant: the State considers that the gain has been realised at the moment ownership is transferred.
A practical example
Suppose you bought your apartment in Alfaz del Pi in 2008 for €150,000, plus €15,000 in taxes and notary fees. Your acquisition value is therefore €165,000. In 2026 you decide to donate the property to your son. The market value at the date of the gift is €250,000. The taxable capital gain is €250,000 − €165,000 = €85,000.
For an individual donor who is not tax resident in Spain and acts without a permanent establishment, the capital gain on the gift of Spanish property is generally taxed at a flat 19% under non-resident income tax (IRNR). The progressive savings-income rates for Spanish tax residents do not apply, and the rate is not based on Swedish nationality. In this example, a taxable gain of €85,000 gives a tax liability of €16,150, before any adjustments or relief that may apply to the particular case. Modelo 210 for the property transfer must be filed during the three-month period following the first month after the gift. See the Spanish Tax Agency’s IRNR rates and Modelo 210 instructions.
And the recipient’s tax?
On top of that, the recipient pays Gift Tax under the rules of the Autonomous Region where the property is located. In the Valencian Community, since 2023 there is a 99% rebate for gifts between parents and children, which keeps the recipient’s bill low — but this rebate has no effect on the donor’s capital-gains tax, which must be paid in full.
The famous over-65 exemption (does not apply to non-residents)
Spanish law exempts the capital gain when a person aged 65 or over transfers their habitual residence. However, this exemption only applies to tax residents in Spain. For non-residents the tax applies in full, regardless of age or family relationship with the recipient. This is one of the most important distinctions to bear in mind when planning intra-family transfers.
Calculate your tax
👉 Capital gains tax calculator
The linked calculator is designed for sales and provides an indicative estimate. It must not be treated as a gift-tax calculation: a pure gift has no purchase price from which to withhold the 3% payment that applies to purchases from non-residents. The tax valuation, costs, any depreciation and the circumstances of both donor and recipient must be reviewed before signing.
Our recommendation
Donating a property in Spain is often a sensible idea, but it must be planned with both taxes in mind: Gift Tax for the recipient and Capital Gains Tax for the donor. In some cases a will or a marital-property arrangement is more advantageous; in others, the lifetime gift is clearly the better option. We analyse each family’s situation and set out every alternative with precise figures before any decision is taken. Get in touch and we will review your specific case.
Contact us:
Email: [email protected]
Phone: +34 629 549 430
Web: www.colas-abogados.com