08 · Inheritance & Gifting on Mallorca: the Balearic Foral Law
*Unlike mainland Spain, Mallorca is governed by its own separate body of inheritance law. For you as a buyer, that has very concrete consequences: a substantially smaller forced share, distinctively Mallorcan tools such as the definición — and, since 2023, a transfer to children and spouses that effectively costs no tax at all.*
What matters here: Where a Mallorca property forms part of an estate, it falls — provided there is Balearic vecindad civil (civil residency / regional civil-law status), or the EU Succession Regulation applies — precisely outside mainland inheritance law. The governing instrument is the Compilación del Derecho Civil de les Illes Balears (the codified Balearic civil-law statute). That shifts forced shares, planning latitude and tax outcomes noticeably — and in your favour, if you plan for it early.
The legal basis: Compilación del Derecho Civil de les Illes Balears (DLeg 79/1990)#
The Balearic Islands have their own foral / civil and inheritance law (BOIB-i-1990-90001). The Spanish Código Civil (Civil Code) applies here only on a subsidiary basis — that is, only where the island law is silent. Structurally, the Compilación is divided into four books: Libro I = Mallorca, II = Menorca, III = Ibiza/Formentera. It was last modernised by Ley 7/2017 and Ley 8/2022 — the latter concerns contractual succession law and has been in force since 17.01.2023.
Legítima (the forced share / reserved portion) on Mallorca ✅#
✅ established — Compilación DLeg 79/1990 (Libro I):
| Entitled party | Forced share | Article |
|---|---|---|
| Children/descendants | 1/3 (where ≤ 4 children) or 1/2 (where > 4) | Art. 42 |
| Parents/ascendants (where no descendants) | 1/4 ✅ (not 1/3) | Art. 43 |
| Surviving spouse's usufruct | 1/2 (alongside children), 2/3 (alongside parents), otherwise universal usufruct | Art. 45 |
In practice this gives you considerably greater freedom of disposition over your assets than the mainland allows — there, the children's forced share is 2/3. So anyone who wants to dispose freely of a larger portion of their property is structurally better placed on Mallorca.
Definición / *diffinitio* — the Mallorcan speciality ✅#
This is a unique planning instrument (Art. 50/51 Compilación, now in the version under Ley 8/2022). The principle: a descendant renounces, during the parents' lifetime, their future inheritance and forced-share claims — and does so in consideration of a gift. Put simply, it is a waiver of the forced share in exchange for an advance gift. On the mainland, exactly this fails on the prohibition of contracts over future inheritances and is therefore not permitted; on Mallorca, by contrast, it is permitted and common practice.
- Relevant for foreigners: 🟡 Under the TSJIB ruling 1/2021, foreigners resident on Mallorca
(with habitual residence on the island) can also enter into a definición — even without vecindad civil. For many DACH buyers (German, Austrian, Swiss) whose centre of life is on Mallorca, this is the decisive doorway.
- For tax purposes, the transaction is treated as an acquisition analogous to mortis causa (on
death). It follows that the ISD relief applies (see below), and on the transferor's side no IRPF (personal income tax) "plusvalía del muerto" (the deceased's capital gain) arises. All told, one of the strongest succession structures Mallorca has to offer.
Donación universal de bienes presentes y futuros ✅#
This is the universal gift with appointment of heir during one's lifetime (the beneficiary becomes the heredero contractual, the contractual heir). Present-day assets pass over immediately, any earlier wills are thereby revoked, and the disposition is irrevocable. It is typically used to hand on a business or property in an orderly way while still alive (Art. 8–13 Compilación, now Ley 8/2022).
Will and the EU Succession Regulation#
- Will: the standard is the
testamento abierto(open will) executed before the notary. Its content
follows the Compilación; its form follows the CC.
- EU Succession Regulation (Regulation 650/2012, "Brussels IV"): in principle, the law of the
habitual residence applies (Art. 21). By means of a choice of law (professio iuris, Art. 22), you can instead bring the law of your nationality into play. Registration of the change of title at the land registry is additionally eased by the European Certificate of Succession (ENZ / ECS). Our clear advice to foreign owners: do not leave the choice of law to chance, but make it deliberately.
Tax: Impuesto sobre Sucesiones y Donaciones (ISD) in the Balearics ✅#
Inheritance — relief up to 100 % (Decreto-ley 4/2023) ✅#
Since 18.07.2023, a 100 % bonificación (relief) on ISD applies to Group I & II — that is, children of any age, spouses and parents. In effect, inheritance by children or a spouse is therefore de facto tax-free. For Group III (siblings, uncles/aunts, nephews/nieces) the reduction is 50 % where the deceased had no descendants, otherwise 25 %. Important: the filing obligation remains — via the ATIB (Balearic tax authority) using Modelo 650/660, with a deadline of 6 months, plus a possible extension of a further 6 months.
Gift vs. inheritance vs. succession pact#
| Pure gift | Inheritance | Succession pact (definición / donación universal) | |
|---|---|---|---|
| ISD Group I/II | 🟡 high relief (2024/25 reform) | 100 % | 100 % |
| IRPF gain to transferor | taxable | does not apply | does not apply ("plusvalía del muerto") |
The upshot for you: where a property has risen sharply in value, the succession pact often beats the pure gift quite decisively on tax. There is one caveat all the same — the municipal Plusvalía municipal (local capital-gains tax on land value) may still fall due.
Double taxation (inheritance)#
🟡 Between Germany and Spain, and between the United States and Spain, there is no dedicated inheritance-tax double-taxation treaty. A double-taxation risk therefore remains, one that can be mitigated via §21 ErbStG (German Inheritance Tax Act) or, for the US, via Form 706-CE / Schedule P. The detail on this is in Ch. 14.
❓ FAQ#
How large is the forced share on Mallorca? For children it is 1/3 (where there are up to 4 children) or 1/2 (from 5 upwards); for parents, 1/4. That is clearly less than on mainland Spain, where 2/3 applies.
Do children pay inheritance tax on a Mallorca property? Since 2023 a 100 % bonificación applies to children, spouses and parents — in effect, no ISD falls due. The return via Modelo 650/660 must nonetheless still be filed.
Sources (selection)#
- Compilación DLeg 79/1990 (BOIB-i-1990-90001), Art. 42/43/45/50/51 · Ley 7/2017 · Ley 8/2022
- Decreto-ley 4/2023 (ISD relief) · Regulation (EU) 650/2012 · TSJIB 1/2021