Redaccion“This measure consolidates the fiscal policy of my Government, which considers this tax to be unfair and outdated, and which has already been eliminated by many countries in the European Union,” the president stated during her speech at the conference organized by the Forbes House Club, where she also recalled that it is “a commitment” she made in her 2023 electoral program, “broadly supported by the people of Madrid at the polls.”
“Therefore, I ask for respect for our fiscal autonomy and for the decision of the people of Madrid in a ballot box that has determined that we should go in this direction with our fiscal policy, one that makes us attractive, competitive, and, far from all the lies being spread, is not at the expense of the rest of Spain but quite the opposite,” she added.
Díaz Ayuso also emphasized that this is not any “fiscal dumping” but rather that the Community of Madrid uses “its autonomy and regulatory capacity, established in the Constitution, to define its tax policy and be more competitive, as can be done in any other region of Spain, where the neglect of employment, self-employed individuals, and opportunities for young people is evident.”
The Government Council will thus authorize the start of the public consultation and information process for the draft Law on this tax reduction that will continue to consolidate the Community as the Autonomous Community with the lowest taxes in all of Spain. This is one of the hallmarks of Madrid’s economic policy to generate employment and wealth, with top-quality public services, which has helped make it the region with the highest GDP in the country, surpassing Catalonia since 2019.
The new tax reduction – one of the 9 that will come into effect this year in the Community of Madrid – will establish a 100% bonus in the case of donations between individuals that are less than 1,000 euros, eliminating the obligation to submit a self-assessment below that amount. It will also eliminate the formal requirement of granting a public document to apply the existing ones for donations, up to 10,000 euros, that do not require the granting of the same for their registration in a public register.
Thus, for example, two siblings inheriting from another deceased sibling, without descendants, ascendants, or spouse, who owned a home valued at 200,000 euros and savings totaling 100,000 euros, will avoid paying more than 15,600 euros each on the unbonused quota (double the current amount or almost 7,850 euros more each) with the new bonus.
Similarly, four nephews inheriting from their uncle (under the same previous circumstances) his primary residence valued at 250,000 euros and money in accounts totaling 100,000 euros, will now save more than 7,200 euros each on the unbonused quota (double the current amount or almost 3,620 euros more each).
55 billion euros in savings on donations and inheritances
Additionally, this is the second reduction made in Inheritance and Donations during the tenure of the president of the Community of Madrid, following the one approved in 2022 that raised the bonus from 15% to 25% between siblings and from 10% to 25% between uncles and nephews. In total, once the one starting its processing today comes into force, both measures will allow an additional savings of 188 million euros per year for the people of Madrid.
This new reduction adds to the 31 approved by the regional government since 2019 under the presidency of Isabel Díaz Ayuso, which have allowed the people of Madrid to save 31.3 billion euros. An economic and tax policy that has led the Community of Madrid to lead the Autonomous Fiscal Competitiveness Index in Spain since 2020, annually compiled by independent experts from the Foundation for the Advancement of Liberty and the Tax Foundation of the USA.
The Community of Madrid began 20 years ago to approve reductions in the Inheritance and Donations tax. Since then, the total savings for all Madrid taxpayers thanks to these measures amount to nearly 55 billion euros.
The 9 tax reductions in the region for this year, mainly focused on facilitating the purchase and rental of housing, also represent an annual saving of 310 million euros for the people of Madrid as a whole.
