Take the case of a 30-year-old man who, in order to inherit 800,000 euros from his parents, had to pay 164,109 euros in death duties. Had he lived in Castilla-León the amount payable would have been almost half (89,163) or in Balearic Islands where it would have only set him back 5,950.
But there is a cheaper region: If his parents had lived in Madrid, he would only have paid 1,586 euros.
Yes, Madrid is cheap, which is why the Duquesa de Alba, a top nobility in Andalucia who had lived most of her life in Sevilla, moved there so that her offspring ended up paying virtually nothing upon her death.
The Junta, was disappointed to say the least with this ‘desertion by its honorary citizen,’ losing in this way 100m euros in revenue.
There’s even a pressure group called Plataforma Stop Impuesto Sucesiones, which is headed by 56-year-old, Juan Carlos Valverde from Sevilla, whose aim in life it to push the Junta de Andalucia to abolish the tax.
The fact is that as Andalucia has the highest death duties in the whole of Spain it means that it’s actually getting very little money because people are doing a ‘Duquesa de Alba,’ whereas in Madrid, where it is the lowest, they’re pulling in the money, because that is where everybody is heading.
The figures speak for themselves: the total amount earned in death duties in the whole of Spain was 2,454m euros, of which Andalucía took 360m euros – a surprisingly small percentage given the fact that it is the region with the most population.
Two final points:
The tax must be paid up front, before you receive your inheritance; if it’s the family home and the inheritor doesn’t have any savings then it’s impossible to pay.
The tax is based on pre-crisis Catastral prices; i.e., properties heavily over priced compared to today’s real prices.