50% cut to the gift tax: once only per donor, and still not in force

Quick answer: the 50% cut to the gift tax comes from the mega reform, which Congress passed on 4 August 2026 and which is still not law: as at 1 October 2026 it has not been published and the Constitutional Court stage is still pending. Under the text as passed, the benefit can be used once only per donor, requires at least half of the value given to go to forced heirs, is capped at 50% of the donor's estate, frees those gifts from the judicial insinuación, and lasts one year, counted from the first day of the second month after publication. In the meantime, the rates under law 16.271 continue to apply.

Because it is a one-off, time limited window, what needs to happen now is not signing anything: it is arriving with the decision already studied and the paperwork ready to act in the first month. Anyone who starts sorting out title once the window is already open will be too late.

Where things stand

What the benefit covers

• A 50% cut to the tax payable on the gift.
• Once only per donor. It is not a scheme that can be used year after year. The cap is measured against all the gifts that take advantage of it, and until the tax authority issues instructions on how it applies, it is best to settle the whole structure at once.
• Mainly in favour of forced heirs, meaning children, ascendants and a spouse or civil partner. At least half of the value given must go to them, the rest must go to people who can receive from the cuarta de mejoras, the quarter of the estate that can be allocated among close relatives, and gifts to third parties do not benefit unless the donor has no such beneficiaries.
• Capped at 50% of the donor's estate.
• For one year from the first day of the second month after publication, the period within which the public deed must be executed.
• No judicial insinuación. Qualifying gifts are made by public deed, after the donor files a sworn statement with the tax authority, and are freed from the judge's authorisation.

Being a one-off changes the whole planning exercise. If you have three children and want to transfer property to all three, that is not three opportunities, it is one. That forces you to decide in advance what is being given, to whom and in which transaction, rather than working it out as you go.

What the reduction does not change

The reduction is to the tax and, under the text as passed, it also frees qualifying gifts from the judicial insinuación. The rest of the gift regime stays the same, and that is where the costs and deadlines people do not keep in mind are hiding.

A common mistake

Transferring the house to a child during your lifetime looks like the elegant solution for avoiding inheritance problems. In practice, done badly, it creates three new problems:

• The parent loses control of their home. If a family rift, a child's divorce or a child's creditor comes along afterwards, the house is exposed. We go into this in the costly mistake of transferring the house to your children.
• It unbalances the inheritance among siblings, and that gets corrected later in the partition, at a cost and with conflict. That is covered in our guide to partition proceedings.
• The wrong legal structure is chosen. A gift, a simulated sale and a usufruct have different tax and family effects, and they are not interchangeable. The comparison is in transferring the house during your lifetime.

The structure that most often solves the real problem, which is wanting to transfer the property without losing the use of it, is the lifetime usufruct. If only the bare ownership is given and the parent keeps the usufruct, the transaction is still a gift, and the tax is calculated on the bare ownership under the rules of law 16.271.

What to do now, before the window opens

• Sort out the title. If the property comes from an estate without a posesión efectiva, if the registered area does not match the ground, or if there is an old mortgage that was never lifted, that has to be resolved first and takes weeks or months. When the problem is with boundaries or surface area, the route usually runs through a correction of the registered area.
• Work out the figure using the current rates to see what half actually means in your case. For medium sized estates the amount can be smaller than you imagine, and in that case the decision should not turn on the tax.
• Decide who gets what, bearing in mind that it is one opportunity per donor and that there is a cap of 50% of the estate.
• Talk to the other forced heirs. A transfer that a sibling did not know about often ends up being disputed in the partition.
• Prepare the sworn statement the donor must file with the tax authority to show the requirements are met, including the cap of 50% of their estate.

Documents worth having ready

None of this can be handled on the same day the law is published. While you wait for the Constitutional Court's ruling, this is what is worth gathering:

• The current certificate of title for the property you want to give away, and a copy of the current registration.
• The certificate of mortgages and liens, to find out whether anything needs to be lifted before the deed of gift.
• A calculation of the donor's estate, even an approximate one, because the cap on the benefit is measured against that estate, not against the value of the gifted asset on its own.
• The complete list of forced heirs, children, spouse or civil partner and, where applicable, parents, to gauge the effect of the gift on a future succession.
• The property's fiscal appraisal certificate, which is a standard piece of information for calculating taxes associated with the property.

Mistakes we see in enquiries about this reduction

• Acting as if it is already in force. The text has been passed, but without publication there is no law and no benefit to invoke. Any step taken on the opposite assumption rests on the wrong basis.
• Thinking about separate gifts for each child without factoring in that the benefit is once only per donor. The whole structure has to be decided in advance, not built up gift by gift.
• Not checking the couple's marital property regime. If the asset belongs to the marital estate rather than being one spouse's own property, each donor's situation changes, and it is worth sorting out before going to the notary.
• Telling the family after signing, instead of before. That often leads to disputes that end up in the partition.
• Calculating the saving on the asset's market price instead of on the actual tax due under law 16.271. These are different figures, and confusing them leads to rushed decisions.

What to ask before committing to a gift

With the title in order and the documents gathered, there are still questions worth answering before setting a date for the deed:

• What is my total estate, and what does 50% of it come to? Without that figure you cannot know whether the gift you are planning fits within the cap.
• Is the title free of problems? A mortgage that has not been lifted, or a registered area that does not match, can delay the deed just when the window is already running.
• Are all the other forced heirs aware of this? It is not a legal requirement for making the gift, but it is the difference between a peaceful gift and one that ends up in partition proceedings.
• Which structure suits my case better, a gift or a usufruct? The answer is not always an outright gift. Sometimes keeping the usufruct and giving away only the bare title solves the real problem better, which is not losing the use of the home.
• Does my gift meet the requirements to qualify? At least half of the value given must go to forced heirs, and the gift cannot exceed 50% of the estate. If those conditions are not met, the gift follows the general regime, with the judicial insinuación and the full tax.

What was given during life is not forgotten when the donor dies: for tax purposes it is added to what the recipient inherits from the donor, less the tax already paid, and under the text as passed, for gifts that took the reduction the tax treated as paid is the amount that would have been due without it. In civil law, it is charged against their share. It is in inheritance given away before death.

Frequently asked questions

Can I make the gift now and claim the benefit once the law comes out?

No. The benefit applies to gifts made within the window, so giving before that means giving under the current regime. What you can do is have everything ready to execute the deed as soon as the window opens.

Does the reduction apply to inheritances too?

What was passed is a reduction to the gift tax, that is, to lifetime transfers. Inheritance tax follows its own regime, and the succession rules are in our guide to the posesión efectiva.

I have three children. Can I use it three times?

No. The benefit is once only per donor, and the 50% cap is measured against all the gifts that take advantage of it. Until the tax authority clarifies how it applies when there are several recipients, the prudent course is to include all three in a single structure, decided once the figures have been worked out.

What if both of us give, father and mother?

Each donor has their own situation, and the couple's marital property regime matters here, because a marital asset is not the same as a spouse's own property. It is exactly the kind of thing that needs to be sorted out beforehand, not at the notary's office.

Do I need the insinuación even with the reduction?

No, if the gift qualifies for the reduction: under the text as passed, those gifts are made by public deed and are freed from the judicial insinuación. If the gift does not meet the requirements or is made outside the window, article 1401 applies: without the insinuación it is void for the excess, and a void gift is not fixed by having paid less tax.

What happens if the Constitutional Court changes something?

The Constitutional Court has already ruled on the challenges that were filed, but as at 1 October 2026 its mandatory review of certain provisions was still pending. Until there is a ruling and publication, the prudent course is not to commit to anything on the strength of the benefit, while having the preparatory work done so as not to miss the window if it is confirmed.

Is it always worth giving property away during your lifetime if the tax is cut in half?

No. The tax is one variable, and almost never the most important one. Losing control of your own home, creating a conflict between siblings or ending up exposed to the recipient's creditors costs far more than the tax you save. The reduction makes it worth looking into, not worth doing automatically.

While waiting for publication, is there anything that makes no sense to move forward on?

Yes: it is not worth executing the deed on the strength of a benefit that does not yet exist. Everything else, sorting out the title, calculating the estate, talking to the family and gathering the information for the sworn statement to the tax authority, can and should be pushed forward now.

How we work on this

We start with the title and with the family map, in that order. The title, because a gift is registered, and anything wrong with the registration will surface exactly when a deadline is running. The family map, because it defines who the forced heirs are and what effect the transfer will have on the future succession.

Then we compare the options using actual figures: a gift, a usufruct, a sale, or leaving things as they are. In quite a few cases the conclusion is that the window does not change the decision, and we would rather say so before the client spends money on a deed.

When a gift does make sense, we get the deed and the sworn statement ready to execute as soon as the benefit is in force, and we coordinate the registration so no time is lost at the Conservador. All of this is handled by our estates team, with a title study as the first step.

Send us the property's rol, its property tax roll number, and tell us who your heirs are, and we will tell you whether the gift makes sense for you, how much the reduction is worth in your case, and what needs sorting out now so you are not too late.