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Spanish Inheritance Tax for Foreign Property Owners
Who Pays Inheritance Tax in Spain?
Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones) is paid by the person who inherits, not by the estate. This is one of the most important differences from the system in the United Kingdom and several other countries, and it surprises many heirs.
If the deceased owned property in Spain, the tax is due in Spain even where both the deceased and the heirs lived abroad. Each heir declares what they personally receive, and the amount payable depends on their own relationship to the deceased and on their share.
Since the European Court of Justice ruling of 2014, non-resident heirs from the EU and EEA are entitled to the same regional allowances as residents, and Spanish practice has since extended equivalent treatment more broadly. This matters enormously, because the regional allowances are often far more generous than the state rules.
How Much Will My Heirs Pay?
Three factors determine the bill. The relationship between the deceased and the heir: spouses, children and parents fall into the most favourable group, while unrelated beneficiaries are taxed considerably more heavily. The value of what is inherited. And the region where the property is located, because each autonomous community sets its own allowances.
Altea is in the Valencian Community, which applies significant reductions for close relatives. In many family situations the effective tax on a typical Costa Blanca property is far lower than heirs fear before taking advice — but this depends entirely on the family circumstances and the figures.
Allowances and rates are set regionally and are revised periodically. We calculate the actual liability for your specific case rather than working from generic figures.
The Six-Month Deadline
Missing the deadline means surcharges and interest, and it can also block the sale of the property, because the inheritance cannot be registered until the tax has been dealt with.
Six months sounds generous. In practice, gathering a death certificate, obtaining the certificate of last wills, collecting apostilled and translated documents from another country and coordinating several heirs takes longer than most families expect, particularly in the weeks immediately following a bereavement.
How to Reduce the Bill Legally
Make a Spanish will
It does not by itself reduce the tax, but it avoids delay, translation costs and the risk of a foreign will being applied in a way that produces a worse tax outcome.
Claim every allowance you are entitled to
Regional reductions for close relatives, and the reduction for the main residence where the conditions are met, are the two that most often make the difference.
Consider the ownership structure while you are alive
How a property is held between spouses, and whether a lifetime transfer makes sense, are decisions with real tax consequences — but they must be assessed carefully, because a poorly planned lifetime gift can cost more than the inheritance it was meant to avoid.
Take advice before, not after
Almost every opportunity to structure the position disappears on the date of death.
Get Your First Consultation for FREE!
A free initial consultation to calculate what your family would actually pay, and what can still be done about it.
Our Inheritance Tax Service Includes
- Calculating the inheritance tax liability for each heir before anything is signed.
- Identifying every regional allowance and reduction you are entitled to.
- Obtaining the death certificate and the certificate of last wills.
- Managing apostilles and official translations of foreign documents.
- Preparing and filing the inheritance tax return within the deadline.
- Requesting an extension where the six-month deadline cannot realistically be met.
- Formalising the acceptance of the inheritance before a Spanish notary.
- Registering the property in the heirs’ names at the Land Registry.
- Acting under power of attorney so heirs abroad need not travel.
- Advising on the sale of the inherited property once registration is complete.
- Coordinating with your adviser at home on double taxation relief.
Frequently Asked Questions About Spanish Inheritance Tax
Do non-resident heirs pay more tax than residents?
They should not. Since the 2014 European Court of Justice ruling, non-resident heirs from the EU and EEA are entitled to the same regional allowances as residents, and Spanish practice has since extended equivalent treatment more widely. Heirs who paid on the old basis were in many cases able to reclaim the difference.
What is the deadline to pay?
Six months from the date of death, extendable by a further six months if the extension is requested within the first five. Late payment attracts surcharges and interest, and blocks registration and any subsequent sale.
Can we sell the property to pay the tax?
Not before the inheritance has been accepted, the tax settled and the property registered in the heirs’ names. This is precisely why the deadline can create pressure, and why it is worth starting the process early rather than waiting.
Does a Spanish will reduce inheritance tax?
Not directly — the tax depends on the relationship, the value and the region. What a Spanish will does is make the process faster, cheaper and more predictable, and it prevents the delays that lead to missed deadlines and surcharges.
Do the heirs have to travel to Spain?
Usually not. With a power of attorney we can accept the inheritance, settle the tax and register the property on their behalf.