Mallorca property: Donations at record levels to avoid tax

Property transfer tax percentage rises in line with the value of the most expensive homes. | Patricia Lozano

Majorca Daily Bulletin reporterPalma19/02/2022 12:41

For the whole of Spain in 2021, there were 25,062 donations of properties, a record number. In the Balearics alone, there were 2,152, an increase of 43% from 2020 and also a record.

The reason for this was concern about increased tax, especially in regions which have typically most benefited from this type of operation.

The president of the API real estate agents association in the Balearics, Natalia Bueno, says that for people who made these donations in 2021, there were "significant tax savings.". In the Balearics, there is a property transfer tax rate of between one and twenty per cent for operations involving family and bases of 700,000 euros. "In the Balearics we have one of the lowest tax burdens in Spain, although it is also true that Spain generally has one of the highest burdens, not only in Europe, but in the whole world."

Of the 2,152 donations in 2021, 1,243 were made during the first half. This was attributed to families wishing to anticipate the July entry into force of law on fraud prevention. This in itself increased the tax burden.