Did you know that the Community of Madrid has introduced new tax relief measures and regulatory changes affecting donations?

Law 2/2025, dated June 25, 2025 (published on June 27, 2025), increases the tax relief available to all relatives classified under Group III of kinship (second- and third-degree collateral relatives, as well as ascendants and descendants by affinity) to 50%.

To understand the scope of this measure, it is important to review the different kinship classifications.

Classification of Kinship Groups

Consanguinity

Consanguinity refers to blood relationships and is classified as follows:

• Direct line: parents and children (first degree), grandparents and grandchildren (second degree).
• Collateral line: siblings (second degree), uncles, aunts, nephews, and nieces (third degree).

Affinity

Affinity relationships arise through marriage or civil partnerships, linking an individual to their spouse’s or partner’s blood relatives. Examples include parents-in-law, sons-in-law, and daughters-in-law.

Specific Kinship Groups

• Group I: descendants and adopted children under 21 years of age.
• Group II: descendants and adopted children over 21 years of age, spouses, and ascendants.
• Group III: siblings, nephews and nieces, and second- and third-degree collateral relatives.

100% Tax Relief for Certain Donations

A 100% tax relief applies to donations with a taxable base not exceeding €1,000, regardless of the relationship between the donor and the recipient.

This limit may only be applied once within a three-year period for donations made by the same donor to the same recipient.

In these cases, there is no obligation to declare the donation.

Simplified Formal Requirements

In addition, for the purpose of applying tax benefits to donations, the requirement to execute a public deed has been removed when the taxable base does not exceed €10,000, provided that a public deed is not otherwise required for the acquisition to be legally effective.

For this purpose, all donations made by the same donor to the same recipient during the three years preceding the tax event will also be taken into account.

All of these measures entered into force on July 1, 2025.

Are you facing a similar situation and need assistance?

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