As reported in the media this summer, the new government in the Balearic Islands has implemented one of its electoral promises by adopting changes to the inheritance tax. The legislative decree of 18 July 2023, states that inheritance by close relatives, i.e. children, spouses and parents, is now subject to a 100% tax reduction.

An important concern for many homeowners in Ibiza is how their property will be inherited.

The covenant known as an “succession agreement” (“el pacto sucesorio“)is a useful instrument that serves to regulate property transmissions between relatives, and it can be treated from a fiscal point of view as an anticipated inheritance.

Following the ruling of the European Court of 3 September 2014, Spanish lawmakers equated non-residents to residents with regard to inheritance, with the move being hailed as a great success.

Since 1 January 2015, following these changes to the law on inheritance and gift tax, the special tax regimens observed by the different Spanish Autonomous Communities in Spain also became applicable to EU citizens with residency in another member state.