The housing crisis is one of the main problems for young people (and not so young) in Spain. In this context, family support in the purchase of a home is a key element: many young people need the help of their parents or relatives to be able to assume the entrance of a house. The main obstacle to this family aid is that the Treasury consider it as a donation and, therefore, is subject to tax obligations.
A measure of the Government of Extremadura that has entered into force in 2026 seeks to eliminate this obstacle and allows parents or direct relatives of young people can donate to them up to a maximum of 200,000 euros without having to pay the Inheritance and Donation Tax. However, this exemption is not a blank check. There are strict rules that must be followed to avoid a tax scare.
Donation for first home. The Government of Extremadura has updated its regulations on the Inheritance and Donation Tax (ISD) to allow a 100% reduction in this tax for the first 200,000 euros donated to descendants, provided that this donation is intended for the purchase of your first habitual residence in Extremadura.
He article 21 of the new tax regulations establishes an exempt limit of 200,000 euros that covers cash donations as help for the purchase of housing, but also extends to direct transmission of homes or plots of land to build it (in this case it is limited to 120,000 euros). In this way, the exempt amount of 180,000 euros that was already contemplated by the previous regulations is increased and new requirements are added.
It is not a blank check. To benefit from this exemption, the recipient must be under 36 years of age when the donation is formalized and tax base in personal income tax It cannot exceed 28,000 euros individually or 45,000 euros jointly. This focuses help on young people with medium or low incomes who do not have the necessary capital to make a down payment or build their own home. This exemption does not apply if the recipient already has assets greater than the first tranche of the state ISD scale, set at more than 402,678.11 euros.
Furthermore, the donation must be registered in a public deed before a notary, specifying that it is intended for the first home and habitual residence, the purchase of which must occur within a maximum period of six months. On the other hand, the beneficiary must be listed as the owner of the home for a minimum of five subsequent years, except for death or justified causes such as job transfer.
Other conditions to take into account are that that first home and habitual residence must be in Extremadura, which has a double usefulness since it not only contributes to eliminating fiscal barriers to facilitate this donation, but also seeks the reduce depopulation of the territory.
Practical cases. Suppose that parents donate 190,000 euros to their 32-year-old daughter in Cáceres to buy her first apartment in February 2026. The beneficiary meets the age, income and personal income tax requirements, formalizes the donation before a notary and signs the purchase of her home on time. This family must complete the Inheritance and Donation Tax settlement process, but the payment will be zero euros as it is 100% subsidized.
However, the daughter must live in and be the owner (even if it is shared ownership) of the apartment she has purchased for at least five years. If you sell it after a year due to an unjustified move, you will lose the tax credit and must regularize the donation with a surcharge.
Image | Unsplash (Christian Dubovan)
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