Spanish families often wonder whether it is better to donate the apartment to their child now or keep it within the inheritance. The answer depends on three variables: the autonomous community, the value of the property, and the kinship. In 2026 the tax costs continue to be marked by the Inheritance and Gift Tax (ISD), the municipal capital gains tax and the notary and registration costs.
This article offers a direct comparison with concrete numbers. The reader will be able to calculate the approximate cost of each option and detect from what amount one path saves money compared to the other.
Costs of Donating a Property During Lifetime
The donation generates an immediate change of ownership. The recipient becomes the owner from the moment the document is signed. This fact activates several payments.
The main tax is the ISD paid by the person receiving the asset. The taxable base is usually the real value of the property according to the assessment by the regional administration. In many communities a multiplier coefficient is applied based on the degree of kinship and the recipient's prior wealth.
In addition, the transferor must pay the municipal capital gains tax (IIVTNU). The city council calculates the increase in land value since the last transfer. For an apartment acquired 15 years ago for 120,000 euros and valued today at 280,000 euros, the capital gains tax ranges between 2,800 and 5,200 euros depending on the municipality.
The notarial costs for a donation deed are between 480 euros and 950 euros when the value is between 200,000 and 400,000 euros. Property registration adds an average of 450 euros. The total fixed costs usually amount to around 1,400 euros.
Some communities apply reductions to the ISD on donations. Madrid maintains in 2026 the 99% reduction for donations between parents and children up to 500,000 euros per recipient. Andalusia offers the same benefit after the 2022 reform which is being extended. Catalonia, however, only reduces inheritances and maintains tax rates ranging from 5% to 20% on donations.
Taxes Generated by a Property Inheritance
Upon death, the property becomes part of the estate. The heirs must pay ISD on the value of the asset at the time of death. Most communities apply larger reductions than for donations.
The municipal capital gains tax is also due. In this case it is usually paid by the heir or the estate itself. The deadline for filing is six months from the date of death, extendable by another six months.
The notarial costs for an inheritance deed are more variable. If there is only one heir and no will, the notarial declaration of heirs costs about 350 euros. The subsequent deed of property adjudication ranges between 600 euros and 1,200 euros. Registration adds an additional 500 euros.
The most significant difference appears in the ISD. In the Valencian Community the reduction for inheritance for direct descendants reaches 100,000 euros per heir in 2026, and reduced rates apply. In Galicia there is a 99% bonus up to 400,000 euros for children and spouses. These advantages are not always replicated in lifetime donations.
Another practical aspect is personal income tax (IRPF). The donation does not generate a capital gain for the donor. The heir retains the same acquisition date and value as the deceased had. This delays the payment of the capital gains tax until the future sale.
Tax Comparison by Autonomous Communities in 2026
Regional differences are very pronounced. In Madrid a donation of an apartment valued at 350,000 euros to an only child generates less than 500 euros in ISD thanks to the 99% reduction. The inheritance would generate a similar amount. The municipal capital gains tax would be the same in both cases.
In Catalonia the donation of the same property can amount to between 12,000 euros and 28,000 euros in ISD depending on the child's prior assets. The inheritance, however, benefits from reductions of up to 500,000 euros per heir and a much lower effective rate. The difference can exceed 20,000 euros.
Andalusia maintains in 2026 the 99% reduction for both donations and inheritances in group I (descendants). The savings is similar in both options as long as the limits are not exceeded. The municipal capital gains tax continues to be the most relevant fixed cost.
In the Valencian Community inheritance is clearly cheaper. The donation is taxed at 7-11% once minimum reductions are applied. Inheritance enjoys bonuses that can leave the ISD at less than 2,000 euros for a property worth 300,000 euros.
Navarra and the Basque Country have their own taxes. In Navarra the Tax on Donations and Successions allows an exemption of 47,000 euros for children under 30 years old. Above that threshold the rates are progressive.
Practical Example: Family in Málaga with a 320,000 Euro Apartment
Juan, aged 67, lives in Málaga. He is a widower and has one son, Carlos, aged 38. He owns an apartment valued at 320,000 euros with pending municipal capital gains of 4,100 euros. His total net worth is 480,000 euros.
Option 1: immediate donation. Juan goes to the notary and signs the donation deed. He pays the capital gains tax of 4,100 euros. Carlos settles the ISD in Andalusia. With the 99% reduction in effect in 2026, the regional tax amounts to 380 euros. Notary and registration costs: 1,650 euros paid equally between them. Total cost for the family: 6,130 euros. Carlos becomes the owner immediately and can sell or rent the apartment whenever he wishes.
Option 2: wait for the inheritance. Juan keeps the apartment in his estate. Upon his death, Carlos declares the inheritance. The municipal capital gains tax remains 4,100 euros. The ISD in Andalusia with the kinship reduction and 99% bonus amounts to 220 euros. Notarial and registration expenses total 2,150 euros because two deeds are required (declaration of inheritance and adjudication). Total cost: 6,470 euros.
In this specific case the donation saves 340 euros. However, if Juan needed to sell the apartment in the next few years to finance a nursing home, the donation would allow Carlos to handle the sale without waiting. If Juan expects his estate to grow above 1,000,000 euros, the inheritance could end up being more expensive due to the adjustment of coefficients in the Andalusian ISD.
Savings Thresholds and Estate Planning Factors
There are three clear thresholds. The first appears around 200,000 euros of cadastral value. Below that figure, the fixed notary and registration costs weigh more than the tax differences. Donation is usually more expensive due to the regional tax rates.
The second threshold is at 400,000 euros. From that amount the ISD reductions on donations begin to decrease in several communities. Inheritance maintains more stable reductions.
The third factor is the number of children. With multiple descendants, inheritance allows the reductions to be distributed among all of them. Donation requires splitting the property while alive or making successive donations that may trigger audits by the tax authorities.
Another variable is the reservation of usufruct. It is possible to donate the bare ownership while reserving the usufruct. This reduces the ISD taxable base by between 20% and 70% depending on the donor's age. In 2026 a 70-year-old donor sees the base reduced by approximately 60%. This formula combines the advantages of donation with the security of continuing to use the property.
Planning should also include the future wealth tax. Donating reduces the donor's base but increases the recipient's. In communities with this tax, such as Catalonia or Aragon, the transfer may generate a new annual payment of between 400 and 1,200 euros.
These procedures can be formalized by videoconference in accordance with Law 28/2023. The notary verifies the identity of the parties and formalizes the document without the need for physical presence.