Inheriting a property in Spain: What are the rules? in Medvilla Spanje

Inheriting a property in Spain: What are the rules?

10.11.2023

At MedVilla we understand that inheriting a property in Spain is not always easy. Planning the division of your Spanish property is essential and it is therefore important to understand how inheritance tax works in Spain.

Upon the death of a UK resident, inheritance tax must be paid in UK on the deceased's worldwide assets. In addition, Spain is also authorized to tax real estate in Spanish soil.

We would like to list some important points:

  • Regional Variation: Inheritance tax in Spain varies from region to region. Each autonomous region has the authority to set its own rates and exemptions. This means that what you pay depends on where your property is located.
  • Residential Status: Whether you are a resident in Spain or not affects your tax payment. If you are a resident in Spain, inheritance tax is levied by Spain on your worldwide assets. If you are not a resident (Belgian resident), Spain only imposes inheritance tax on your assets in Spain.
  • Spanish Tax Deduction: If you are a Belgian resident and pay inheritance tax in Spain, you can deduct this from the Belgian inheritance tax you owe. This avoids double taxation on the same assets.
  • Role of Notaries: When dividing an estate in Spain, both the Belgian and Spanish notaries play a crucial role. The Belgian notary will draw up a European declaration of inheritance, which forms the basis for the notarial deed in Spain. The Spanish notary will draw up the deed for the Spanish assets and will ensure correct calculation and payment of the inheritance tax.
  • Timeline for Declaration and Payment: The deadlines for declaration and payment of inheritance tax may vary per region in Spain. In general, inheritance tax must be declared and paid within 6 months after death. It is very important to act in a timely manner and, if necessary, to request a postponement. Make sure you take timely action to prevent any complications.

With proper succession planning you can minimize inheritance taxes, for example by donating. We will discuss this further in a next blog.

At MedVilla we offer our customers guidance to smoothly arrange an inheritance or donation. We will then have you assisted by specialists in the field, both in UK and Spain.

¡ Hasta pronto!