The changes coming in 2026 to inheritance tax

If you inherit in 2026, it is important to be aware of the changes to inheritance tax that come into effect this year, as they could be significant. The controversy surrounding this tax is that, although state legislation establishes certain bases, the autonomous communities regulate allowances and, in some cases, these can reach high percentages. In 2026, changes will be implemented that may put an end to these allowances, as we will see below.

What changes are planned for inheritance tax in 2026?

Inheritance tax regulations vary greatly between autonomous communities, with some places imposing significant tax payments on heirs and others imposing a symbolic payment of 1%, as is the case in Madrid for certain groups of relatives.

The government wants to end .these differences and intends to introduce a national tax that will do away with inheritance tax allowances in the autonomous communities.

What allowances apply to inheritance tax in Madrid?

When a person dies and has assets and liabilities, these will form part of their estate, which will pass to their heirs and legatees. It is this acquisition of assets by the heirs that gives rise to the obligation to pay inheritance tax.

There are three groups of people who must declare the assets and rights derived from an inheritance: heirs, legatees and those who are beneficiaries of a life insurance contract.

In Madrid, two types of inheritance tax allowances apply:

• A 99% allowance, which means that the tax is almost eliminated. This allowance applies to two groups of people who are related to the deceased, as follows:
  o Group I includes the descendants of the deceased (children and grandchildren) and adopted children under the age of 21.
  o Group II includes descendants (children, grandchildren) and adopted children aged 21 or over, spouses, ascendants (parents and grandparents) and adoptive parents.
  Since January 2007, all these persons, if they are heirs, are eligible for a 99% allowance on inheritance tax, meaning they will pay 1%.
• A 50% allowance (previously 25%) applies from 1 July 2025 in the case of heirs who are second or third degree collateral relatives, ascendants and descendants by affinity, i.e. siblings, uncles, nephews, brothers-in-law and sisters-in-law.

What happens in other autonomous communities?

As we have seen above, the amount payable can vary considerably from one autonomous community to another. For example, in the Valencian Community there is also a 99% rebate on inheritances from direct relatives (parents, children or spouse, among others) and from June 2026 a 25% rebate will apply in the case of heirs who are nephews and brothers, and 50% from 1 June 2027.

In Galicia, the Law on Fiscal and Administrative Measures was published on 31 December 2025, which, in relation to Inheritance and Gift Tax, establishes that the amounts for reductions due to kinship and disability will be unique for all taxable events of inheritance tax that take place between the same deceased person and the successor. Therefore, they will only be applied to the second and subsequent acquisitions in the amount that has not been exhausted in the previous ones on a cumulative basis.

In Andalusia, the reduction of one million euros for descendants, spouses and ascendants and a 99% allowance on amounts over one million euros will remain in place in 2026. In the case of second-degree relatives, the reduction amounts to 250,000 euros.

On the other hand, in Castilla-La Mancha, heirs under the age of 21 are eligible for a 100% allowance, and for those over the age of 21, the allowance will be 80% if the inheritance does not exceed 300,000 euros.

In Castile and León, the 99% rebate also applies to direct relatives such as ascendants, descendants, spouses or adoptive parents of the deceased.

The Canary Islands have one of the highest rebates at 99.9% for ascendants, descendants, spouses, siblings, nephews and nieces, and uncles and aunts.

The highest tax relief is also found in Cantabria, with tax relief of between 90% and 100% in some cases.

In the Region of Murcia, there is also a 99% tax relief for ascendants, descendants and spouses, and other reductions are regulated for other heirs, depending on various factors such as the asset being inherited.

Catalonia, Asturias and Navarre, together with Castilla-La Mancha, are the regions that apply the fewest allowances, which has led to a significant increase in revenue for these autonomous communities.

In Extremadura, a 99% allowance for non-direct relatives and close friends with no family relationship to the deceased was approved last February.

The Basque Country and Navarre offer significant exemptions. For example, in the Basque Country there is an exemption for descendants, ascendants, spouses and common-law partners when the inheritance is less than €400,000. In Navarre, inheritances of up to €250,000 are subject to a 0% tax rate.

The draft budget for Aragon includes a 99% rebate on inheritance tax for relatives in kinship group II.

In the Balearic Islands, there is a 100% tax relief between parents and children that could be eliminated with the reform proposed by the Government.

In La Rioja, there is also a 99% tax credit for ascendants, descendants and spouses. On the other hand, in 2026, changes will be made to the tax law regarding reductions in cases of acquisitions of sole proprietorships and professional businesses and acquisitions of shares in entities.

In short, the regional landscape is complex and it is important to be aware of it in order to know what tax benefits can be applied. On the other hand, it is necessary to be attentive to the possible approval by the Government of a minimum limit on inheritance tax that affects regional allowances.