It's not uncommon for parents to send money to their children to help them out, whether it's to buy a house or for smaller expenses. But many people skip an important step: declaring that transfer and paying gift tax.
Here's the essential information about the legal limits that banks and other institutions use when money moves between individuals. To be clear, there isn't a specific limit: any money transfer from one person to another, if it's a gift and isn't returned, counts as a donation and must be declared. Even so, the truth is that many don't do so when the amounts are small.
However, it's important to keep in mind that banks are obligated to notify the Tax Authorities if they see money transfers or cash deposits that exceed certain limits. How much can you transfer without the bank notifying the Tax Authorities? According to Law 7/2012, any transaction exceeding €10,000, including transfers, must be reported to combat fraud and money laundering. Other situations also apply: if you exchange €500 bills, the amount doesn't matter; if you pay or receive more than €3,000 in cash; or if you take out loans or credit exceeding €6,000. Furthermore, from 2026, the €3,000 threshold for reporting card payments will be eliminated, ensuring that the Tax Agency doesn't miss any relevant information.
And what about small transfers? Since January 1, 2026, the Tax Agency has changed how it monitors electronic payments, whether Bizum, transfers, or card payments. Now, they monitor not only large sums but also small, recurring transactions. Banks are required to notify you not only for deposits exceeding €3,000, but also for any recurring payments, even small amounts.
A typical example: parents who deposit money into their child's account every month for rent or mortgage payments. If this money isn't repaid, the tax authorities may consider it a recurring donation, and you'll be required to declare it.
Source: idealista/news — “Hacienda ya no perdona ni los pequeños pagos de padres a hijos”
