Elimination of inheritance tax benefits 20,000 Balearic families

Since the entry into force of the Decree Law on fiscal measures, approved on 18 July 2023, a total of 20,646 families have benefited from the elimination of the inheritance tax in the Balearic Islands on inheritances between parents and children, grandparents and grandchildren, and spouses (groups I and II), resulting in a savings of 758 million euros.

The president of the Government, Marga Prohens (centre); the first vice president and Minister of Economy, Finance and Innovation, Antoni Costa, and the Director General of Budgets and Financing, Tomeu Alcover. Photo: CAIB.

According to the government led by Margalida Prohens (PP), the reform has significantly boosted the use of lifetime inheritance agreements or “pactos sucesorios”, a figure specific to Balearic civil law. In addition, 94% of the inheritances fully exempted in these groups have been under one million euros.

Regarding group III —inheritances between siblings, uncles and nephews—, the partial tax exemption (25% or 50%, depending on the case) has benefited 2,346 taxpayers, generating total savings of 50 million euros.

“We are not only satisfied but proud that in the first two years of this legislature more than 26,000 taxpayers have been able to benefit from these tax reductions approved within the first ten days of the government,” said the first vice president and Minister of Economy, Finance and Innovation, Antoni Costa. “The change was this: stop taxing the lifetime efforts of families and facilitate access to housing for those who need it most.”

Other key data from the fiscal reform

Tax on property transfers (first home).
- Eliminated for under 30s and people with disabilities.
  - 1,452 beneficiaries.
  - 21 million euros saved (average of €14,462 per person).
- 50% reduction for under 36s and vulnerable families.
  - 2,402 beneficiaries.
  - 24 million euros saved (average of €10,000 per person).
New regional deductions in income tax.
- 101,839 taxpayers benefited from regional deductions in the latest income tax campaign (58.1% more than the previous year).
- Savings in income tax: 32.33 million euros.
- Five new deductions have been created and four existing ones improved.
- Income tax rates reduced for incomes under €30,000.