Second house in Spain, second home abroad
A second home in Spain! Coming home under the sun abroad. Maybe you've been living with that dream for a while, or maybe you've made it come true. We know from experience that there are many questions surrounding this subject, because there are many financial and tax matters to take into account. MedVilla Spain is happy to inform you about this, so that you can make the right choice later.
Second home in Spain - the inheritance tax
What about the Spanish inheritance tax that your heirs will have to deal with if you leave your second home in Spain? There are major regional differences in Spain regarding inheritance tax exemptions and rates.
Most countries levy inheritance tax if you leave real estate in that country. Even if you do not live in that country. Spain is no exception. The Spanish government has established exemptions and rates. These apply in principle when the Spanish property is inherited by persons who do not live in Spain. The 17 autonomous regions into which Spain is divided have the authority to deviate from national rules. These deviations are almost always to the benefit of the taxpayer. Because higher exemptions apply and/or high discounts on the inheritance tax due. In the past, the regional rules only applied to heirs living in Spain. The European Court of Justice ruled in September 2014 that this constituted unlawful discrimination. Since then, residents of other EU member states can also rely on the application of the regional rules.
Second home in Spain - Double inheritance tax?
Belgium, the Netherlands and Spain have not concluded a treaty that prevents double taxation of inheritance tax. But if you die as a resident of Belgium or the Netherlands, your heirs can rely on the Double Taxation Decree 2001. In principle, your heirs may deduct the inheritance tax they pay in Spain from the inheritance tax they have to pay in Belgium or the Netherlands. . But if the inheritance tax on your second home in Spain is lower than the Spanish assessment, they may only deduct the lower amount. If the surviving partner does not have to pay inheritance tax in Belgium or the Netherlands, he or she cannot offset the Spanish inheritance tax. If you have children, it is more beneficial to leave the second home in Spain to them in your will. And to allocate other assets to your partner
Second home in Spain, Major regional differences in inheritance tax in Spain.
To illustrate the major regional differences, we compare the inheritance tax that a spouse must pay in a number of Spanish regions. In this example we assume a gross inheritance of Spanish assets of € 500,000.
According to national rules, the exemption for spouses is less than €16,000. In the regions of Valencia and Catalonia, the exemption is significantly higher at € 100,000. In Andalusia, since 2018, there has even been an exemption of € 1,000,000 for spouses. Which means that in this example the spouse does not have to pay inheritance tax at all.
In the Balearic Islands, the spouse only pays 1% on the first €700,000 of taxable value. Valencia does apply the national tariff table, with percentages of up to 34%. But gives the spouse a 50% discount on the calculated tax. In Catalonia, the spouse is not only entitled to a relatively high exemption and favorable rates. But the spouse also receives a discount of no less than 99% on the inheritance tax to be calculated. As a result, on balance, he also has to pay virtually no inheritance tax in Catalonia.
Second home in Spain - Unfavorable cases of inheritance tax
The higher exemptions and tariff discounts in certain autonomous regions do not apply to everyone. But are reserved for immediate family members, such as the surviving spouse and children. In principle, no exemption applies at all for unmarried cohabiting partners. And the rate in Spain can be as high as 68%. While in Belgium and the Netherlands the same high exemption and the same rate often apply as for married people. These situations deserve special attention. For example, by not leaving any Spanish assets to the partner, a lot of inheritance tax can be saved. A mortgage on the Spanish home can also have an advantageous effect in such a case. Because it reduces the tax base for Spanish inheritance tax.
Other questions about a second home in Spain
Do you have questions about your personal situation in relation to a second home in Spain? Or would you like to meet the tax specialists at MedVilla Spain without obligation? Email us - info@MedVillaSpanje.com - or call us - 0034 688 708 332 - for no-obligation advice.
We are happy to discuss any questions you may have with you. And we are happy to work with you to determine who within our network best suits your needs and is therefore the best contact person for you.
Your second home in Spain is well insured
Because the purchase of a second home in Spain is a serious investment, you want to adequately protect this investment with appropriate insurance. Through our partner network with more than 10 years of experience in insuring foreign holiday homes on the basis of very extensive conditions. With a policy in Dutch.
We have built up unique expertise in, among other things, insuring special homes and valuable contents of a second home in Spain. We will assist you in taking out the necessary insurance.
The door of our office is always open from Monday to Friday from 10am to 2pm - Avenida de los Nenúfares 0, Vivero de Empresas, despacho 9, 03184 Torrevieja - https://goo.gl/maps/2eEZ8gLwnKaVPc7k9
Would you like to contact our team?
- You can reach us directly on 0032 2 342 10 61 from Belgium & 0031 207 45 00 27 from the Netherlands
- Free via WHATSAPP 0034 688 708 332
- We can also be reached by email firstname.lastname@example.org
- Or even by simply completing the contact form
Please feel free to ask your question and indicate how we can assist you. If your question concerns a property, do not forget to mention the reference(s) or complete the contact form on the page of the property itself.