Murcia defies central government to remove gift tax for close relatives

Murcia, Spain - Costaluz Lawyers

The Murcia region in Spain has defied the central government by opting to remove gift tax for close relatives.

The PSOE-led government in Madrid has been seeking to homogenise gift tax across the region but the Murcia region, led by the opposition PP, has rebelled.

Since Friday 28 January 2022, taxpayers in the region have been able to apply for a 99% tax rebate for the so-called Grupo de Parentesco III from the Tax Agency (Hacienda). This rebate can be backdated to 1 January 2022.

This group includes siblings, uncles and aunts, nephews and nieces and various other close relatives (parents or children-in-law, step-parents or step-children).

This is now in addition to rebates for groups I (children under 21) and II (children over 21, spouses, grandparents, parents and adoptive parents).

According to the Murcia regional government, this measure “represents a further step in the regional government’s fiscal moderation policies to boost the economy”. It has been implemented, they say, to “favour job creation and economic growth”, as well as “helping families and boosting growth”.

In 2021, the rebates for groups I and II created a saving of around 330 million euros for almost 35,000 taxpayers in the Murcia region – an increase from the previous year.

The numbers also show that 88% of declared donations in group I were less than 100,000 euros, rising to 90% in group II.

Regional president Fernando López Miras argued that the central government’s move was targeting middle-income earners and stressed that Murcia was one of the first Autonomous Communities to eliminate inheritance and gift tax among those family members who most frequently carry out these transactions, such as between parents and children, spouses or between grandparents and grandchildren.

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