Madrid to Cut in Property Inheritance Tax

25/04/2014 – Expansion

Madrid´s City Council approved an amendment in the Tax on the Increasin Value of Urban Land document (IVTNU by its Spanish acronym), known as local capital gains, to cut  by up to 90% on the payments for property inheritance.

Until now, the discount has been applied at transfers of houses due to mortis causa of the owner, provided that the hier is descendent, ascendent or a spouse who has been living with the late for last 2 consecutive years and has been registered as an inhabitant of the house over the past 5 consecutive years.

From now on, these requirements will not have to be met in order to inherit a property. As a consequence, the number of benficients of the tax rebate is expected to grow significantly.

According to estimations of the City Hall, “for a house of €90.000 in book value the change in law will bring a 90% cut in payment amount (from €4.698 to €469.8). It means a €4.200 saving, due to rise in tax abatement from 50% to 95%.

Throughout 2013, local authorities earned €410 million from the IVTNU. 41.000 beneficients obtained a discount for 20.000 inheritance processes.

 

Original article: Expansión (by J. M. Lamet)

Translation: AURA REE

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