Wealth and Inheritance Tax in Madrid: Reliefs, Rates and Who Pays
Madrid's wealth tax relief, the national solidarity tax on large fortunes and the 99% inheritance and gift relief for close relatives, with what changes for non-residents.
Residents of the Comunidad de Madrid pay no regional wealth tax: a 100% relief cancels the bill. Above €3 million of net wealth, the state’s solidarity tax on large fortunes still applies, at 1.7% to 3.5% as of November 2026. Children, spouses and parents who inherit in Madrid get a 99% relief on inheritance and gift tax.
Do Madrid residents pay wealth tax?
In practice, no. Spain’s wealth tax (Impuesto sobre el Patrimonio) is a state tax whose yield and most rules belong to the regions. The state default exempts the first €700,000 of net wealth plus up to €300,000 for your main home, and taxes the rest at rates from 0.2% to 3.5%. Each region can change those figures.
The Comunidad de Madrid applies a general relief (bonificación) of 100% of the resulting tax. The rule is in article 20 of the regional tax law, which you can read in the BOE’s consolidated text of Madrid’s tax law. The relief has applied for years and is still in force as of November 2026.
The relief cancels the tax, not the paperwork. If your assets are worth more than €2 million in total, or your tax before the relief is positive, you still file form 714 with the Agencia Tributaria, even when you end up paying nothing. Check the current filing thresholds before the July deadline each year.
What is the solidarity tax on large fortunes?
The Impuesto Temporal de Solidaridad de las Grandes Fortunas was created by Ley 38/2022 as a state tax that regions cannot cancel. It was meant to run for 2022 and 2023, but Real Decreto-ley 8/2023 extended it until wealth taxation is reviewed, so it still applies as of November 2026. The return is form 718, filed in July for the previous year.
| Net taxable wealth | Rate on that slice |
|---|---|
| Up to €3,000,000 | 0% |
| €3,000,000 to €5,347,998.03 | 1.7% |
| €5,347,998.03 to €10,695,996.06 | 2.1% |
| Above €10,695,996.06 | 3.5% |
The same €700,000 exemption is deducted first, so the tax starts to bite at about €3.7 million of net wealth, or more if you own your home. Any regional wealth tax you actually paid is deducted from it. In Madrid that deduction is zero because of the 100% relief, which is why the solidarity tax hits Madrid residents with large fortunes harder than residents of regions that charge their own wealth tax.
How much inheritance tax do families pay in Madrid?
Inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones) is charged on the person who receives. The tax depends on the amount, any wealth the heir already has and the relationship to the deceased, grouped into four kinship groups. Madrid applies reliefs on the final tax bill, as of November 2026:
| Kinship group | Who is included | Madrid relief on inheritances | Madrid relief on gifts |
|---|---|---|---|
| Group I | Children and descendants under 21 | 99% | 99% |
| Group II | Children 21 and over, grandchildren, spouse, parents and grandparents | 99% | 99% |
| Group III | Siblings, nephews and nieces, uncles and aunts, in-laws | 50% | 50% |
| Group IV | Cousins, more distant relatives and non-relatives | None | None |
The Group III relief went up from 25% to 50% under Madrid’s Ley 2/2025, in force since July 1, 2025. Couples who are not married should check whether they count as spouses under the rules for registered partnerships before relying on the Group II relief.
What rules apply to gifts?
Gifts have extra conditions in Madrid. Small gifts with a taxable value of up to €1,000 from the same giver to the same person over three years are fully relieved and need no return. For larger gifts within the family, the 99% or 50% relief applies only if:
- the gift is formalised in a public deed before a notary when its value is above €10,000 (added up over three years from the same giver);
- for gifts of cash or bank balances, the deed states where the money came from;
- the return is filed on time, normally within 30 working days of the gift.
A private agreement turned into a notarial deed after the filing deadline loses the relief. That is the most common way families end up paying the full gift tax.
What applies to foreign residents and non-residents?
Foreign nationals who are tax resident in Madrid are treated exactly like Spanish residents: same wealth tax relief, same inheritance and gift reliefs. Nationality does not matter, residence does.
Non-residents pay wealth tax only on assets located in Spain, such as a Madrid flat. Since 2015, residents of EU and EEA countries could choose the rules of the region where most of their Spanish assets are, and a 2021 reform extended that choice to residents of any country. That means a non-resident whose Spanish assets are mostly in Madrid can generally apply the 100% Madrid relief. Similar rules let non-resident heirs use the regional inheritance rules. The solidarity tax applies to non-residents too, on their Spanish assets.
Tax treaties, foreign inheritance taxes and the timing of residence all affect the result, so cross-border estates are a case for a licensed asesor fiscal or the Agencia Tributaria, not a general guide.
How does Madrid compare with other regions?
Regions set their own wealth and inheritance rules, so the same estate can be taxed very differently across Spain. Several regions keep a wealth tax with their own exemptions and rates, and inheritance reliefs for children range from near-total to partial. Madrid is at the low end on both taxes, together with a few other regions that also relieve close-family inheritances by 99% or close to it. Rules change often, usually in each region’s annual budget law, so compare current figures in the regional laws on the BOE before taking decisions based on residence.
For the tax on income, see our guide to income tax for Madrid residents. Buying property brings its own taxes, covered in what buying a home in Madrid really costs. Workers under the special inbound regime are taxed on wealth only for Spanish assets, explained in our guide to the Beckham law.
Bottom line
If you plan to help a child buy a flat with cash, do the gift in a notarial deed that states the origin of the money and file the return within the deadline; otherwise the 99% relief is lost. If your net wealth is near €3.7 million, budget for the solidarity tax: in Madrid there is no regional wealth tax payment to offset it.
FAQ
Is there wealth tax in Madrid in 2026?
The regional wealth tax is fully relieved, so Madrid residents pay nothing under it as of November 2026. The state solidarity tax on large fortunes still applies to net wealth above €3 million after the €700,000 exemption.
How much inheritance tax does a child pay in Madrid?
Children and other Group I and II heirs get a 99% relief on the tax bill. The heir pays 1% of the tax calculated under the general rules, and still has to file the return within six months of the death.
Can a non-resident who inherits a Madrid flat use Madrid’s relief?
Generally yes, since non-residents can apply the rules of the region where the assets are. The details depend on where the deceased lived, so check with the Agencia Tributaria or an asesor fiscal.
Do I need a notary to give my child money in Madrid?
For gifts above €10,000 over three years, yes, if you want the 99% relief. The deed must also state where the money came from.
