Inheritance Tax in Mallorca

How high is inheritance tax in Mallorca?

Those who inherit in Mallorca pay nothing in the end in most family constellations — and still have to file a return. For spouses, children, grandchildren and parents (Groups I and II), the Balearic Bonificación (tax relief) has, since 18 July 2023, remitted 100% of the calculated tax. However, the relief is tied to a condition that hardly any summary mentions: if a property is inherited, the value declared in the Escritura pública — the notarial deed — may not exceed the Valor de referencia (the cadastral reference value) by more than a fifth; if no certifiable reference value exists, the market value applies instead. Anyone who exceeds this loses the Bonificación entirely (Art. 36.2 and 36 bis.2 Decreto Legislativo 1/2014). The calculator above asks for this. Siblings, nieces and nephews, on the other hand, still pay tax, but since 25 July 2025 considerably less than before. The calculator above walks through the full chain: from the value of the inherited share, through the allowances and the tariff, to the amount actually paid to the ATIB (Agència Tributària de les Illes Balears, the Balearic tax authority).

How it's calculated: the six stages of Spanish inheritance tax

Spanish inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones, ISD) is not calculated using a single tax rate on the estate's value, but in stages. Each stage has its own technical term, and each can significantly change the result. The calculator displays all six individually — in exactly this order:

1. Base imponible (taxable base): the value of what this particular heir receives — not the whole estate. Real estate is assessed at a minimum of the Valor de referencia (cadastral reference value).
2. Reducciones (deductions from the taxable base): the allowance according to the relationship group, where applicable a deduction for disability, and the deduction for the deceased's main residence.
3. Base liquidable: what remains after the deductions. Only this amount is subject to the tariff.
4. Cuota íntegra (tax before reliefs): the result of the tariff scale. The Balearic Islands have had their own, much flatter scale for Groups I and II since 1 January 2016; for Groups III and IV, the general scale applies, from 7.65% to 34%.
5. Cuota íntegra corregida (tax after pre-existing wealth surcharge): the cuota íntegra multiplied by a coefficient that depends on the Patrimonio preexistente (the heir's own wealth before the inheritance) and on the relationship group. In Groups I and II, it is exactly one at the lowest level, so it changes nothing; for a sibling or a niece, it noticeably increases the tax.
6. Bonificación (tax relief) and Cuota a ingresar: the relief is deducted from the cuota íntegra corregida. What remains is the amount payable. For real estate, the relief requires that the value declared in the deed does not exceed the reference value by more than a fifth; otherwise, it is forfeited entirely.

The most common misconception: The percentage values of Group III are reductions on the calculated tax, not tax rates. Anyone who reads them as a tax rate miscalculates by a multiple. Even the full allowance of Groups I and II is a remission on the tax — the tax arises, it is simply not collected. That is precisely why the obligation to file a return remains.

The four kinship groups — and the subgroups that make the difference

The division into four groups comes from national law, the amounts and allowances from the Balearics. Within Group III, it is additionally decisive whether the relationship is by blood or by marriage — this affects both the coefficient and the allowance.

The two subgroups of Group III differ in the multiplier: for blood-related collateral relatives and for those related by marriage in a direct line, the more favourable column applies, while for collateral relatives by marriage the more expensive one applies. That is why the calculator asks for the exact relationship and not just the group.

Caution with partners: Anyone who is not married and not registered as a Pareja de hecho (registered civil partnership) falls into Group IV — with the smallest allowance, the highest coefficient and without any reduction, even after decades of living together. Anyone who wants to change this cannot avoid a Spanish will and the question of the choice of law under European inheritance law is unavoidable.

Two deductions that are often overlooked

The deceased's main residence. If a spouse, parents or descendants inherit the vivienda habitual (the main residence in which the deceased lived), its value is disregarded entirely — capped at €270,151.20 per heir. A collateral relative over 65 may also qualify if they lived with the deceased in the two years before death. The condition is that the property must be held for five years; if it is sold earlier, the tax saved must be repaid with default interest. A holiday property that the deceased only occupied occasionally does not fall under this rule.

Disability of the heir. In addition to the group allowance, €48,000 applies for a physical or sensory disability of 33% or more but under 65%, and €300,000 for 65% or more; the same amount applies for a psychological disability of 33% or more. This deduction is not tied to the kinship group — even an heir in Group III or IV receives it.

When Balearic law applies at all

Inheritance tax is a state tax, the design of which is delegated to the Comunidades Autónomas (the autonomous regions). Which region has jurisdiction is decided not by where the property is located, but by the deceased's habitual residence: Balearic law applies if they spent most days in the Balearics in the five years before the inheritance took effect.

If the deceased was not resident in Spain — the typical case of a German holiday-property owner — the heirs are entitled under the Disposición adicional segunda of the national law to apply the law of the region in which the most valuable part of the Spain-located estate lies. In the case of a finca on Mallorca as the main asset of the Spanish estate, this means Balearic law with its allowances applies. Conversely: if the deceased was resident in the Balearics and the heir lives in Germany, Balearic law also applies.

The calculator asks this first. If the answer is no, it deliberately does not proceed further — the amounts for another region would be different.

Germany and Spain: no treaty, only crediting

Unlike with income tax, there is no double taxation treaty between Germany and Spain for inheritance tax. Both states can tax the same acquisition; relief runs unilaterally via crediting under national law, in Germany under § 21 ErbStG. In practice this means: even if the Spanish tax is reduced to zero by the Bonificación, the German inheritance tax still needs to be checked — and since nothing was paid in Spain, there is nothing to credit. This calculator only maps the Spanish side. More on this in the guidesthe Spanish tax on a German inheritance and the treaty situation between the two countries.

Deadlines, forms, jurisdiction

The tax arises on the date of death. From that day a six-month period runs for the declaration and payment. It can be extended by a further six months if the request is submitted within the first five months; the extension incurs late-payment interest. Anyone who misses the deadline pays surcharges.

1. Obtain the death certificate, will or European Certificate of Succession, and the NIE number of each heir; German documents require an apostille and a certified translation.
2. Look up the property's reference value at the Kataster. For the Bonificación to apply, the value declared in the escritura must not exceed the reference value by more than 20 percent.
3. Fill out the Modelo 650 (self-assessment for inheritance tax), together with the Modelo 660 listing the inventory of the estate.
4. Submit both to the ATIB — even if the Bonificación reduces the tax to zero.
5. Only once the declaration has been stamped can the property be transferred to the heirs in the Registro de la Propiedad (Land Registry).

The Bonificación exempts you from payment, not from the formality. Without a submitted declaration, the transfer in the Land Registry remains blocked — and with it any later sale.

What else applies

Inheritance tax is not the only charge in the event of an inheritance. The municipality additionally levies the Plusvalía Municipal on the increase in land value. As the new owner, you also pay the ongoing IBI (property tax) and, depending on your wealth, the Vermögensteuer (wealth tax). Anyone who later sells the inherited property will find the process in the guide on selling an inherited property.

Not to be confused: The allowance under Spanish wealth tax — three million euros on the Balearics for persons resident there — has nothing to do with inheritance tax. These are two separate taxes with different assessment bases; the one allowance does not reduce the inheritance tax by a single cent.

Common mistakes

• Reading the bonification as a tax rate. A 60 percent Bonificación does not mean 60 percent tax, but 60 percent less tax.
• Forgetting the multiplier. Anyone inheriting as a sibling with their own assets pays more than the scale might suggest — and the coefficients for inheritances differ from those for gifts.
• Failing to file the declaration despite zero tax. The most common reason why an inherited property cannot be sold years later.
• Exceeding the reference value.If a value above the reference value plus 20 percent is declared in the deed, the bonificación is called into question.
• Overlooking the German side.No agreement means: two declarations, two legal systems.
• Waiting for the deadline to apply for an extension.After the fifth month has elapsed, no further extension will be granted.

How other Spanish regions handle it

Inheritance tax is the same state tax throughout Spain, but each region designs its own allowances and reductions. The Balearics are among the most favourable for close relatives: the reduction applies without an upper value limit. Catalonia works with a basic allowance plus its own deduction for the primary residence and a benefit that tapers off with the size of the inheritance share; Galicia exempts acquisitions by close relatives up to a fixed value limit; Aragón combines an allowance with a percentage reduction. The figures for these regions change independently of the Balearic ones — anyone inheriting there should check them locally. For a property in Mallorca, Balearic law is applicable in any case, provided the deceased lived here or the heirs opt for it under the Disposición adicional segunda.

Checklist for the case of inheritance

• Heir's relationship group determined, and for Group III also the exact relationship
• Reference value of the property queried at the Cadastre and compared with the value declared in the deed
• NIE number available for each heir, otherwise applied for immediately
• Death certificate, will or European Certificate of Succession obtained, German documents with apostille and certified translation
• Modelo 650 and Modelo 660 submitted to the ATIB on time, even if the tax due is zero euros
• Extension requested if the six months are not sufficient — by the fifth month at the latest
• German inheritance tax liability checked separately
• Re-registration in the Land Registry initiated
• Plusvalía Municipal registered with the local council

Who can help with this

The processing itself is usually handled by a gestoría — a Spanish administrative office that deals with official procedures — or a lawyer; with several heirs, assets abroad or company shares, a tax adviser in Mallorca is worthwhile. An appointment with the tax authority can be obtained via the tax authority's appointment booking system; whether you yourself are tax resident in Spain is explained in the guide the certificate of tax residency; what applies to residents overall can be found under the rules for tax residents. The formalities immediately after a death are compiled in the guide the formalities after a death.

Conclusion

For most German families in Mallorca, the bill ends up at zero — but it only gets there after six stages, and the obligation to file a return still remains. For those who don't belong to Groups I and II, the result above shows that the difference doesn't lie in a single tax rate, but in the interplay between a smaller allowance, the general tariff, the multiplier applied to one's own wealth, and a relief that only waives part of the amount. Three things determine the outcome before anyone even starts calculating: where the deceased lived, exactly how the family relationship is structured, and whether the six-month deadline is met. And because there is no inheritance tax treaty between Germany and Spain, the Spanish result only settles one half of the matter.

Legal basis and status

The relevant provisions are the national law Ley 29/1987 on inheritance and gift tax, its implementing regulation Real Decreto 1629/1991 for deadlines and procedures, and, for the Balearics, the Decreto Legislativo 1/2014 as amended by Ley 11/2023 and Ley 6/2025 — specifically Art. 21 to 23 (deductions), Art. 33 (tariff), Art. 34 (multiplier), and Art. 36 as well as 36 bis (tax reliefs). The calculator draws every figure from a versioned register with exactly these references and displays the legal status beneath the result; if the law changes, the figure changes in a single place.

Official sources

• Ley 29/1987, de 18 de diciembre, del Impuesto sobre Sucesiones y Donaciones — https://www.boe.es/buscar/act.php?id=BOE-A-1987-28141
• Decreto Legislativo 1/2014 (Balearic law on devolved taxes, consolidated) — https://www.boe.es/buscar/act.php?id=BOE-A-2014-6925
• Real Decreto 1629/1991, Reglamento del Impuesto sobre Sucesiones y Donaciones — https://www.boe.es/buscar/act.php?id=BOE-A-1991-27678
• ATIB — Impuesto sobre sucesiones: https://www.atib.es/TA/contenido.aspx?Id=9855&lang=es