Spain: Inheritance laws affecting foreign buyers

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Do Spanish inheritance laws apply to foreign property buyers, or can I choose my home country's laws?

Spanish inheritance laws automatically apply to property located in Spain, regardless of your nationality or residence status.

However, as a foreign property owner, you can legally elect to apply your home country's inheritance laws instead. This choice must be explicitly stated in a Spanish will that you draft specifically for your Spanish assets.

If you make this election, your home country's succession rules will govern how your Spanish property is inherited, potentially allowing you to bypass Spain's forced heirship requirements. The choice of law must be clearly documented and legally valid in both jurisdictions to be enforceable.

Without this explicit choice, Spanish law becomes the default framework governing your property's inheritance, which includes mandatory inheritance portions for certain family members.

It's something we develop in our Spain property pack.

What happens to my Spanish property if I don't make a will in Spain?

Without a Spanish will, your property will be distributed according to Spain's intestacy laws and forced heirship rules.

Spanish forced heirship laws automatically reserve two-thirds of your estate for your children and one-third for your surviving spouse. Your children receive half of your estate as their "legitimate portion" and have rights to another third that you can distribute among them as you choose.

If you have no children, your parents become forced heirs, and if you have neither children nor living parents, your spouse inherits the entire estate. These rules apply rigidly when no will exists, leaving you no control over asset distribution.

The absence of a will also complicates the inheritance process for your heirs, requiring additional legal procedures and potentially increasing costs and delays. Your heirs must prove their relationship to you and navigate complex Spanish bureaucracy without your guidance.

Making a Spanish will gives you the opportunity to choose applicable law and streamline the inheritance process for your beneficiaries.

Do Spanish inheritance laws treat non-resident foreigners differently from residents?

Spanish inheritance laws apply the same basic framework to both residents and non-residents, but there are important practical differences.

For residents, Spanish inheritance law governs their entire global estate unless they explicitly choose their nationality's law. Non-residents face Spanish inheritance law only for their Spanish assets, while their other international assets follow their country of residence's rules.

As of September 2025, inheritance tax rates and allowances are identical for residents and non-residents, following European Court of Justice rulings that eliminated previous discrimination. Both groups benefit from the same regional tax reliefs and deductions.

The main differences lie in administrative procedures: non-resident heirs must obtain a Spanish tax identification number (NIE) and may face additional paperwork requirements. They also need to work with Spanish notaries and legal representatives more extensively than residents who are familiar with local systems.

Non-residents can use the same inheritance planning strategies as residents, including company structures and Spanish wills with foreign law elections.

Can I legally draft a Spanish will that overrides the forced heirship rules?

Yes, you can draft a Spanish will that effectively bypasses forced heirship by electing your home country's succession law.

This legal strategy requires explicitly stating in your Spanish will that you choose your nationality's inheritance laws to govern your Spanish property. Your home country's laws must allow greater testamentary freedom than Spain's forced heirship system.

For example, if you're from the UK, USA, or Australia, your will can specify that English or American law applies, allowing you to leave your Spanish property to anyone you choose without mandatory family portions. The will must be properly executed according to both Spanish formalities and your home country's requirements.

However, this election only works if your chosen law is compatible with Spanish public policy and property registration systems. Some countries' laws may conflict with Spanish legal principles, limiting this option's effectiveness.

Professional legal advice is essential to ensure your will is valid and enforceable in both jurisdictions, as mistakes can result in unintended consequences for your heirs.

How much inheritance tax would my heirs pay on my Spanish property?

Spanish inheritance tax rates range from 7.65% to 34% on a progressive scale, calculated after applying various allowances and deductions.

Inherited Amount (EUR)	Tax Rate	Example Tax (Before Allowances)
Up to 7,993	7.65%	€611 on €7,993
7,994 - 31,956	8.5% - 9.5%	€2,288 on €25,000
31,957 - 79,881	9.5% - 10.5%	€6,645 on €65,000
79,882 - 239,389	10.5% - 15.5%	€25,987 on €180,000
239,390 - 398,777	15.5% - 21.25%	€58,742 on €320,000
398,778 - 797,555	21.25% - 25%	€142,436 on €600,000
Over 797,555	25% - 34%	€272,055 on €1,000,000

The actual tax burden is significantly reduced by allowances that vary based on the heir's relationship to the deceased. Close family members receive substantial reductions, while distant relatives and non-family beneficiaries face higher effective rates.

Regional governments can modify these rates and offer additional allowances, with some regions providing significant tax relief for family inheritances. Madrid, for instance, offers near-complete exemptions for direct family members.

Are there differences in inheritance tax rates between residents, EU citizens, and non-EU citizens?

As of September 2025, there are no differences in inheritance tax rates based on nationality or EU citizenship status.

All heirs—whether Spanish residents, EU citizens, or non-EU nationals—face the same progressive tax rates ranging from 7.65% to 34%. This equality resulted from European Court of Justice rulings that forced Spain to eliminate discriminatory practices against non-residents.

Previously, non-EU citizens faced higher tax rates and couldn't access regional allowances, but these barriers have been removed. Now, all heirs can benefit from regional tax reliefs and deductions regardless of their nationality or residence status.

The only remaining practical differences involve administrative procedures, where non-residents may need additional documentation and must obtain Spanish tax identification numbers (NIE) before completing inheritance formalities.

This equalization has made Spanish property investment more attractive for international buyers, as their heirs won't face discriminatory tax treatment based on nationality.

How is the taxable value of a Spanish property calculated for inheritance purposes?

Spanish tax authorities calculate the taxable value using current market appraisals, not the original purchase price or cadastral value.

Professional appraisers determine fair market value by analyzing recent comparable sales in the same area, considering factors like location, size, condition, and local market conditions. This valuation typically reflects what the property would sell for at the time of death.

From this market value, authorities subtract any outstanding debts, mortgages, or liens against the property to determine the net taxable inheritance value. Funeral expenses up to €3,000 can also be deducted from the gross estate value.

If heirs disagree with the official valuation, they can commission independent appraisals and challenge the assessment through administrative appeals. However, significantly undervaluing property can result in penalties and additional tax assessments.

The final taxable amount becomes the base for calculating inheritance tax before applying personal allowances and deductions available to each heir.

What specific allowances reduce the inheritance tax bill for heirs in Spain?

Spanish inheritance tax provides substantial allowances that significantly reduce tax liability, especially for close family members.

1. **Children under 21**: Up to €47,858 plus an additional €3,990 for each year under 212. **Adult children, spouses, and parents**: €15,956 basic allowance3. **Siblings, nieces, nephews**: €7,993 allowance4. **Other relatives and non-family**: No allowance5. **Primary residence deduction**: Up to 95% reduction (maximum €122,606) for spouses and children who will occupy the home6. **Life insurance proceeds**: €9,195 additional allowance for beneficiaries7. **Disability allowances**: €47,858 to €150,253 depending on disability degree

These allowances are deducted from the inherited amount before calculating tax, dramatically reducing the actual tax burden for family members. For example, a child inheriting a €200,000 property would only pay tax on €184,044 after the basic allowance.

Regional governments often provide additional allowances, with some autonomous communities offering near-complete exemptions for family inheritances. Madrid provides 99% reductions for spouses and children, while Andalusia offers significant relief for family homes.

Multiple allowances can be combined, making inheritance tax minimal or zero for many family situations involving primary residences.

How long do heirs have to pay inheritance tax in Spain, and can they get extensions?

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Heirs have exactly 6 months from the date of death to file inheritance tax returns and make payment to Spanish tax authorities.

Extensions of up to 6 additional months are available if requested within the first 5 months of the initial deadline. The extension request must demonstrate reasonable cause and is generally granted for administrative or financial difficulties.

Late payment penalties increase progressively: 5% surcharge for delays up to 3 months beyond the deadline, 10% for delays between 3-6 months, 15% for 6-12 months, and 20% plus interest for delays exceeding one year. These penalties apply to the total tax amount due.

In exceptional circumstances, authorities may grant additional extensions beyond 12 months, typically in cases involving complex international estates or significant financial hardship. However, interest charges continue accumulating throughout any extended period.

Prompt payment is crucial because late penalties can substantially increase the total cost, and tax authorities have enforcement powers including property seizure for unpaid inheritance taxes.

How does living abroad affect heirs' inheritance process and tax obligations?

Heirs residing outside Spain can inherit Spanish property but must complete the same legal procedures as resident heirs, with additional administrative requirements.

Non-resident heirs must obtain a Spanish tax identification number (NIE) before beginning inheritance procedures, which requires appearing at Spanish consulates or appointing legal representatives. They need to provide translated and apostilled documents proving their identity and relationship to the deceased.

Their Spanish inheritance tax liability applies only to the Spanish property value, not their global wealth, which can result in lower effective tax rates than Spanish residents. However, they must still meet the same 6-month payment deadline and face identical penalty structures for late payment.

Non-resident heirs often need Spanish legal representation to navigate notarial procedures, property registration, and tax filings, increasing professional service costs. They may also face currency exchange considerations when paying Spanish inheritance taxes.

Despite these additional complexities, foreign-resident heirs receive the same tax allowances and regional benefits as Spanish residents, ensuring equal treatment under current inheritance tax laws.

It's something we develop in our Spain property pack.

What administrative steps must heirs take to officially transfer Spanish property ownership?

Heirs must complete five essential administrative steps to legally transfer Spanish property ownership after inheritance.

1. **Obtain death certificate and locate the will**: Request certified death certificates from Spanish civil registry and check Spain's Central Wills Registry to confirm if a Spanish will exists.2. **Gather required documentation**: Collect family relationship certificates, obtain NIE numbers (for non-residents), and prepare all documents with official translations and apostilles as needed.3. **Accept the inheritance before a notary**: Appear at a Spanish notary office to formally accept the inheritance, either unconditionally or with the benefit of inventory to limit liability for debts.4. **Pay inheritance tax**: File inheritance tax returns within 6 months and pay all due taxes to regional tax authorities, obtaining official payment certificates.5. **Register the property transfer**: Present the notarized inheritance deed and tax payment certificates to the Land Registry to officially register the new ownership and update property records.

Each step requires specific documentation and deadlines, with the notary overseeing legal compliance throughout the process. Professional legal assistance typically streamlines these procedures and helps avoid costly mistakes or delays.

The entire process usually takes 3-6 months when properly managed, but can extend longer if complications arise with documentation, tax calculations, or international paperwork requirements.

Can inheritance planning tools help reduce taxes or complications in Spain?

Several inheritance planning strategies can legitimately reduce Spanish inheritance tax burdens and simplify property transfers for heirs.

Spanish wills with foreign law elections allow property owners to bypass forced heirship rules and choose their home country's more flexible succession laws. This strategy works particularly well for British, American, or Australian nationals whose legal systems permit greater testamentary freedom.

Company ownership structures can sometimes reduce inheritance tax liability, though Spanish anti-avoidance rules limit aggressive tax planning. Holding property through properly structured Spanish companies may provide succession planning benefits while maintaining legal compliance.

Co-ownership arrangements between spouses can optimize inheritance tax allowances by ensuring each partner can fully utilize their individual exemptions. Joint ownership strategies require careful legal structuring to achieve intended tax benefits.

International trusts face significant limitations under Spanish law, as tax authorities often look through trust structures to tax underlying beneficiaries. However, specific trust arrangements may provide benefits in certain circumstances when properly designed and implemented.

Professional inheritance planning combining Spanish wills, ownership structures, and family succession strategies can substantially reduce taxes while ensuring legal compliance with both Spanish and international requirements.

It's something we develop in our Spain property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Real Estate Andalusia - Inheritance Laws in Spain Key Points for Foreign Residents
2. Costa Luz Lawyers - Inheritance Tax Laws in Spain
3. Malaga Solicitors - Complete Guide to the Inheritance Process for Non-Residents in Spain
4. Health Plan Spain - Spanish Will Foreign Assets
5. Costa Luz Lawyers - Forced Heirs in Spain
6. Solicitors in Spain - Inheritance and Forced Heirship Spain
7. CD Solicitors - The Keys to the Inheritance Process for Foreigners in Spain 2023
8. Pellicer Heredia - Inheritance Tax Spain
9. PCC Wealth - Spanish Inheritance Tax Calculator
10. My Spanish Residency - Inheritance Tax Spain