{"id":3755,"date":"2026-11-09T18:26:42","date_gmt":"2026-11-09T18:26:42","guid":{"rendered":"https:\/\/joseselles.com\/family-loan-to-buy-a-home-in-spain\/"},"modified":"2026-11-09T18:37:39","modified_gmt":"2026-11-09T18:37:39","slug":"family-loan-to-buy-a-home-in-spain","status":"publish","type":"post","link":"https:\/\/joseselles.com\/en\/family-loan-to-buy-a-home-in-spain\/","title":{"rendered":"Family Loan to Buy a Home in Spain: How to Do It Right with the Tax Office and the Bank"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"3755\" class=\"elementor elementor-3755 elementor-3734\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7844a985 e-flex e-con-boxed e-con e-parent\" data-id=\"7844a985\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-1e141962 elementor-widget elementor-widget-text-editor\" data-id=\"1e141962\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"Does a loan from parents to children have to be declared to the tax office?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes. Although it is exempt from ITP, form 600 has to be filed with the regional tax office. In the Balearic Islands it is filed with the ATIB within one month of signing the contract. If the loan carries interest, your parents also declare it in their tax return.\"}},{\"@type\":\"Question\",\"name\":\"How much money can my parents lend me without paying tax?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"There is no legal limit. The loan is exempt from ITP whatever the amount. What has to be clear is that it is a genuine loan and not a disguised gift: a written contract, money sent by transfer and repayments as agreed. And if it carries interest, your parents pay tax on it in their return.\"}},{\"@type\":\"Question\",\"name\":\"Can a family loan be interest-free?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes. The law presumes that loans earn interest, but allows proof to the contrary, for example a contract stating there is none, form 600 filed and repayments made. Without that proof, the tax office can attribute the statutory interest rate, 3.25% in 2026, to your parents.\"}},{\"@type\":\"Question\",\"name\":\"Is a loan or a gift better for a flat deposit in the Balearic Islands?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"It depends on whether the money has to come back. If not, in the Balearic Islands a gift from parents to children qualifies for a 100% deduction in gift tax, provided it is made in a public deed documenting the origin of the money and the person receiving it is resident in the Balearic Islands, and the bank sees it as your own savings. If your parents need it back, a well-documented loan is the option.\"}}]}<\/script>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-44ba05dc e-con-full e-flex e-con e-parent\" data-id=\"44ba05dc\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7dbbc8f0 elementor-widget elementor-widget-heading\" data-id=\"7dbbc8f0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\"><span style=\"color:#000000\">Family Loan to Buy a Home in Spain: How to Do It Right with the Tax Office and the Bank<\/span><\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-253c7dba elementor-widget elementor-widget-image\" data-id=\"253c7dba\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"800\" height=\"600\" src=\"https:\/\/joseselles.com\/wp-content\/uploads\/2026\/11\/prestamo-entre-familiares-para-comprar-vivienda-raw-1024x768.webp\" class=\"attachment-large size-large wp-image-3732\" alt=\"\" srcset=\"https:\/\/joseselles.com\/wp-content\/uploads\/2026\/11\/prestamo-entre-familiares-para-comprar-vivienda-raw-1024x768.webp 1024w, https:\/\/joseselles.com\/wp-content\/uploads\/2026\/11\/prestamo-entre-familiares-para-comprar-vivienda-raw-300x225.webp 300w, https:\/\/joseselles.com\/wp-content\/uploads\/2026\/11\/prestamo-entre-familiares-para-comprar-vivienda-raw-768x576.webp 768w, https:\/\/joseselles.com\/wp-content\/uploads\/2026\/11\/prestamo-entre-familiares-para-comprar-vivienda-raw.webp 1200w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-34be5f5 elementor-widget elementor-widget-text-editor\" data-id=\"34be5f5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<div class=\"seo-tldr\">\n\n<p>A family loan to buy a home in Spain is perfectly legal and exempt from the property transfer tax (ITP), although it has to be declared on form 600 (in the Balearic Islands, within one month of signing). If it carries interest, your parents declare it in their tax return. The Spanish tax authorities presume that every loan earns interest unless proven otherwise: a written contract stating there is none, the money sent by bank transfer, repayments made as agreed and that form 600 help to prove it. For the bank giving you the mortgage, your parents&#8217; loan is one more debt. And in the Balearic Islands, a gift from parents to children qualifies for a 100% deduction in gift tax if it is made before a notary, the origin of the money is documented and the person receiving it lives in the Balearic Islands: sometimes that works better than a loan.<\/p>\n\n\n<p>In Mallorca, buying your first home without family help is getting harder and harder. On a \u20ac300,000 flat in Palma, a 20% deposit plus the property transfer tax already comes to more than \u20ac60,000 before any costs, and that help usually comes from parents. Many families ask me the same thing: &#8220;Should we do it as a loan or as a gift? And what will the tax office say?&#8221;. Here is how to do it properly.<\/p>\n\n<\/div>\n\n<h2 style=\"color:#000000;\">Is it legal for your parents to lend you money to buy a house?<\/h2>\n\n\n<p>Yes, and there is no limit on the amount. A loan between family members is a contract like any other: one side lends and the other repays. What is not advisable is a purely verbal loan: it is valid, but afterwards it is very hard to prove it is a loan and not a gift.<\/p>\n\n\n<p>That matters for two reasons:<\/p>\n\n\n<ul>\n\n<li><strong>The tax authorities presume that loans earn interest<\/strong> &#8220;unless proven otherwise&#8221; (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2006-20764#a6\" target=\"_blank\" rel=\"noopener\">art. 6.5 of the Spanish Income Tax Act<\/a>). Without paperwork, they could ask your parents to declare interest they never received.<\/li>\n\n\n<li><strong>If the money is never repaid<\/strong>, the tax authorities can treat it as a disguised gift and claim gift tax.<\/li>\n\n<\/ul>\n\n\n<p>With a well-drafted contract and repayments up to date, neither should happen.<\/p>\n\n\n<h2 style=\"color:#000000;\">How to draw up a family loan agreement<\/h2>\n\n\n<p>You do not need a notary: a private document signed by everyone is enough. What matters is what it says:<\/p>\n\n\n<ol>\n\n<li><strong>Who lends and who receives<\/strong>, with names, DNI or NIE (Spanish ID numbers) and addresses.<\/li>\n\n\n<li><strong>The amount and how it is handed over<\/strong>: always by bank transfer, never in cash, so there is a trail.<\/li>\n\n\n<li><strong>What it is for<\/strong>, for example the deposit and costs of buying your home.<\/li>\n\n\n<li><strong>How it is repaid<\/strong>: monthly or annual instalments, dates and total term. A realistic schedule you can keep to.<\/li>\n\n\n<li><strong>Whether it carries interest.<\/strong> If it is interest-free, say so expressly.<\/li>\n\n\n<li><strong>What happens if it is not repaid<\/strong>, or if you want to repay early.<\/li>\n\n\n<li><strong>Date and signatures<\/strong> of all parties.<\/li>\n\n<\/ol>\n\n\n<p>After that, make each repayment by transfer with a clear reference, such as &#8220;loan repayment, March instalment&#8221;. That bank trail matters as much as the contract.<\/p>\n\n\n<h2 style=\"color:#000000;\">Form 600: exempt, but compulsory<\/h2>\n\n\n<p>Loans are exempt from property transfer tax (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-1993-25359#a45\" target=\"_blank\" rel=\"noopener\">art. 45.I.B.15 of the ITP and AJD Act<\/a>), but exempt does not mean there is nothing to declare. In the Balearic Islands, the loan is declared to the ATIB (the Balearic Tax Agency) on form 600, marked as exempt, within one month of signing, according to the <a href=\"https:\/\/atib.es\/DescargaDocs\/Instrucciones600_es.pdf\" target=\"_blank\" rel=\"noopener\">form 600 instructions<\/a>. It is filed by the person receiving the money.<\/p>\n\n\n<p>It has an advantage beyond the paperwork: once filed with the ATIB, the contract has a certain date against third parties, the tax office included. The Spanish Civil Code says that the date of a private document counts against third parties from the day it is delivered to a public official in the course of their duties (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-1889-4763#art1227\" target=\"_blank\" rel=\"noopener\">art. 1227<\/a>). If the tax office ever asks, you can show the loan existed from the start and was not put together afterwards.<\/p>\n\n\n<h2 style=\"color:#000000;\">With interest or interest-free?<\/h2>\n\n\n<p>Both are possible. The difference is in the tax:<\/p>\n\n\n<ul>\n\n<li><strong>Interest-free.<\/strong> The law allows it if it can be proven that there is no interest; the clearest evidence is a contract that says so, form 600 filed and the repayments made. Without that proof, the tax authorities can attribute interest at the statutory rate to your parents (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2006-20764#a40\" target=\"_blank\" rel=\"noopener\">art. 40.2 of the Income Tax Act<\/a>), which remains at 3.25% because the 2023 Budget Act is still extended.<\/li>\n\n\n<li><strong>With interest.<\/strong> Your parents declare the interest they receive in their tax return, as savings income taxed at 19% to 30%. For you it is not deductible: there has been no state deduction for buying a main home since 2013.<\/li>\n\n<\/ul>\n\n\n<h2 style=\"color:#000000;\">What the bank will say when the deposit comes from your parents<\/h2>\n\n\n<p>If you are also taking out a mortgage on top of the family loan, which is the usual case, the bank will see it, and you should see it first:<\/p>\n\n\n<ul>\n\n<li><strong>It will ask where the deposit money comes from.<\/strong> Anti-money-laundering rules require it, so your parents&#8217; contract and transfers are also your proof of funds.<\/li>\n\n\n<li><strong>The family loan repayments count as debt.<\/strong> When assessing your creditworthiness, the lender has to take into account your expenses and the commitments you already have (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2019-3814#ar-11\" target=\"_blank\" rel=\"noopener\">art. 11 of Law 5\/2019<\/a>). A repayment to your parents reduces the mortgage you can be offered.<\/li>\n\n\n<li><strong>Hiding it is worse.<\/strong> A well-documented loan can be explained; a hidden one that shows up in your bank statements raises questions and causes delays.<\/li>\n\n<\/ul>\n\n\n<p>There is a very Balearic detail: if you are under 30 and want the 100% property transfer tax relief on your first home (on the first \u20ac270,151.20 of its value), one of the requirements is a mortgage with a financial institution of at least 60% of the property&#8217;s value. The law refers to the valuation, but the ATIB calculates it on the higher of the deed price and the Cadastre&#8217;s reference value. Your parents&#8217; loan does not count towards that 60%: if they lend you so much that the mortgage falls below it, you lose the relief. All the requirements are in the guide to the <a href=\"\/en\/young-buyer-mortgage-balearic-islands\/\">young buyer mortgage in the Balearic Islands<\/a>.<\/p>\n\n\n<p>As a <a href=\"\/en\/mortgage-advisor\/\">mortgage broker in Mallorca<\/a>, when I put your application to several lenders I do it with the family loan disclosed and its paperwork in order, so that each one makes its offer on your real situation. I work as an appointed representative of OVB Allfinanz Espa\u00f1a, a real estate credit intermediary registered with the Bank of Spain (D087).<\/p>\n\n\n<h2 style=\"color:#000000;\">Loan or gift: which works better in the Balearic Islands<\/h2>\n\n\n<p>In the Balearic Islands, gifts from parents to children qualify for a 100% deduction in gift tax if you, the person receiving it, have lived in the Balearic Islands for more days than in any other Spanish region over the last five years (<a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-2014-6925#a5-6\" target=\"_blank\" rel=\"noopener\">art. 54 of the Balearic consolidated tax law<\/a>, in the wording in force since 25 July 2025). When the gift is money, it only applies if its origin is documented and the gift is made in a public deed that states it, and the tax return still has to be filed even if nothing is payable.<\/p>\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th><\/th><th>Family loan<\/th><th>Gift from parents to children<\/th><\/tr><\/thead><tbody><tr><td>Repaid?<\/td><td>Yes, on the agreed schedule<\/td><td>No<\/td><\/tr><tr><td>Tax<\/td><td>Exempt from ITP, with form 600<\/td><td>Gift tax, with a 100% deduction in the Balearic Islands<\/td><\/tr><tr><td>Document<\/td><td>Private contract<\/td><td>Notarial deed, stating the origin of the money<\/td><\/tr><tr><td>For the bank<\/td><td>One more debt<\/td><td>Your own savings<\/td><\/tr><tr><td>If the terms are not kept<\/td><td>Risk of the tax office treating it as a gift<\/td><td>\u2014<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n<p>A loan fits when your parents need that money back, for example for their retirement, or when there are several siblings and everyone should be treated equally. A gift fits when the money does not have to come back and you want the bank to see it as yours. Be careful: if a loan is never repaid and the tax office treats it as a gift, it was not made in a public deed, so it would not get the 100% deduction.<\/p>\n\n\n<p>If the help is part of something bigger, such as sharing out the family&#8217;s assets among the children or bringing forward an inheritance, read first <a href=\"\/en\/how-to-leave-your-estate-to-your-children-in-mallorca\/\">how to leave your estate to your children in Mallorca<\/a>.<\/p>\n\n\n<h2 style=\"color:#000000;\">The mistakes I see most often<\/h2>\n\n\n<ul>\n\n<li><strong>Handing over cash.<\/strong> It leaves no trail and makes it harder to justify the deposit to the bank and the notary.<\/li>\n\n\n<li><strong>Signing nothing<\/strong> because &#8220;it&#8217;s family&#8221;. The paperwork protects your parents as much as you.<\/li>\n\n\n<li><strong>Not filing form 600.<\/strong> It comes to zero and it is your best proof of date.<\/li>\n\n\n<li><strong>A schedule that is never kept.<\/strong> If the instalments never arrive, the loan stops looking like one.<\/li>\n\n\n<li><strong>Forgetting the rest of the family.<\/strong> If there are siblings, putting in writing whether it is a loan or an advance avoids arguments later on.<\/li>\n\n<\/ul>\n\n<div class=\"seo-faq\">\n<h2 style=\"color:#000000;\">FAQ \u2014 Family loans to buy a home in Spain<\/h2>\n\n\n<h3 style=\"color:#000000;\">Does a loan from parents to children have to be declared to the tax office?<\/h3>\n\n\n<p>Yes. Although it is exempt from ITP, form 600 has to be filed with the regional tax office. In the Balearic Islands it is filed with the ATIB within one month of signing the contract. If the loan carries interest, your parents also declare it in their tax return.<\/p>\n\n\n<h3 style=\"color:#000000;\">How much money can my parents lend me without paying tax?<\/h3>\n\n\n<p>There is no legal limit. The loan is exempt from ITP whatever the amount. What has to be clear is that it is a genuine loan and not a disguised gift: a written contract, money sent by transfer and repayments as agreed. And if it carries interest, your parents pay tax on it in their return.<\/p>\n\n\n<h3 style=\"color:#000000;\">Can a family loan be interest-free?<\/h3>\n\n\n<p>Yes. The law presumes that loans earn interest, but allows proof to the contrary, for example a contract stating there is none, form 600 filed and repayments made. Without that proof, the tax office can attribute the statutory interest rate, 3.25% in 2026, to your parents.<\/p>\n\n\n<h3 style=\"color:#000000;\">Is a loan or a gift better for a flat deposit in the Balearic Islands?<\/h3>\n\n\n<p>It depends on whether the money has to come back. If not, in the Balearic Islands a gift from parents to children qualifies for a 100% deduction in gift tax, provided it is made in a public deed documenting the origin of the money and the person receiving it is resident in the Balearic Islands, and the bank sees it as your own savings. If your parents need it back, a well-documented loan is the option.<\/p>\n\n<\/div>\n\n<hr class=\"wp-block-separator\"\/>\n\n\n<p><em>This content is for information only and is up to date as of November 2026. Every family is different: if the amount is large or there are several children, review the case with a professional before signing.<\/em><\/p>\n\n\n\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A family loan to buy a home in Spain is perfectly legal and exempt from the property transfer tax (ITP), although it has to be declared on form 600 (in the Balearic Islands, within one month of signing). If it carries interest, your parents declare it in their tax return. The Spanish tax authorities presume [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3731,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_vx_contenido_v2":"","_vx_titulo_v2":"","_vx_descripcion_v2":"","_vx_seo_title_v2":"","_vx_faq_v2":"","_vx_imagen_v2":"","_vx_antes_301":"","_vx_tema":"","_vx_servicio":"","_joinchat":[],"footnotes":"","rank_math_title":"Family Loan to Buy a Home in Spain: Tax Rules (2026)","rank_math_description":"How parents can lend a child money to buy a home in Spain without tax trouble: contract, exempt form 600, interest, what the bank sees and when a gift fits.","rank_math_focus_keyword":"family loan to buy a home in Spain","rank_math_canonical_url":"","rank_math_robots":[],"rank_math_facebook_image":"","rank_math_facebook_image_id":""},"categories":[25],"tags":[],"class_list":["post-3755","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/posts\/3755","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/comments?post=3755"}],"version-history":[{"count":1,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/posts\/3755\/revisions"}],"predecessor-version":[{"id":3756,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/posts\/3755\/revisions\/3756"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/media\/3731"}],"wp:attachment":[{"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/media?parent=3755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/categories?post=3755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/joseselles.com\/en\/wp-json\/wp\/v2\/tags?post=3755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}