Initially announced by prime minister Fernando Clavijo and later confirmed by regional tax minister Rosa Davila, the measure will be included in the 2016 Canary Islands budget and is expected to be approved by 2015.
Jason Porter, director at international advisory firm Blevins Franks, said the current tax on successions and gifts on the island is currently so punitive that in some circumstances heirs have gone as far as to renounce their inheritance.
“This is an occurrence that has been on the increase over recent years, most notably in Spain,” he said. “The number of renunciations has been even high in the autonomous regions where there is higher succession and gift tax.”
He added that the high tax rate has prompted many residents of the Canary Islands to move to other regions with more generous taxation, something that the reduction should lessen.
Davila said the government also intends to introduce further reductions for Canary Islands taxpayers by 2017, but did not specify how.