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: it is waiting on the Constitutional Court to rule on challenges to certain of its provisions. Under the text as passed, the benefit can be used once only per donor, covers gifts made to forced heirs and to usufructuaries, is capped at 50% of the donor's estate, and lasts one year, counted from the first day of the 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, or split across several successive transactions.
• In favour of forced heirs, meaning children, parents and a spouse or civil partner, and also in respect of usufructuaries.
• Capped at 50% of the donor's estate.
• For twelve months from the first day of the month after publication.

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. Everything else about the gift regime stays the same, and that is where the costs and deadlines people do not keep in mind are hiding.

The mistake we see every week

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. And it is no coincidence that the text as passed expressly mentions usufructuaries.

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. Most of the partition proceedings we handle started with a transfer that a sibling did not know about.
• Have the insinuación ready to go, because it is a court process and it does not get resolved in the same month.

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. It is the most frequent cause of the partition proceedings we end up seeing later.
• 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.
• Is the insinuación already under way? If it has not started yet, that is the first step to take while waiting for publication, not the last.

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. If you want to cover all three, it has to be structured in a single transaction, or you accept that only part of it gets the benefit, and that decision should be made 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?

Yes. The reduction is a tax measure and does not change the civil law requirement under article 1401. Without the insinuación the gift 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 challenges relate to certain specific provisions. 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 or filing the final insinuación 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 getting the insinuación ready, 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 insinuación and the deed 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.