Inheriting property in Spain as a foreigner involves a notarial deed, a tax return and a land registry filing. Inheriting a property in Spain as a foreigner is a well-trodden path. However, it is a formal one: Spanish law requires a specific sequence of documents. In addition, spanish tax authorities impose a strict six-month deadline. Skipping steps or starting late is what turns a straightforward estate into an expensive one. Reviewing inheriting property in Spain early on avoids unexpected tax bills and penalties.
Moreover, this guide sets out the process step by step, from the death certificate to Land Registry registration. In addition, flags the points where foreign heirs most often get stuck.
Step 1: establish which law governs the succession
Under EU Regulation 650/2012, applicable to deaths on or after 17 August 2015. Moreover, the succession is governed by the law of the country where the deceased had their habitual residence at the time of death. Furthermore, the deceased may, however, have chosen the law of their nationality in a will.
In addition, this determines who inherits and in what shares. In fact, spanish law reserves a portion of the estate to certain relatives. Furthermore, whereas common law jurisdictions generally allow full testamentary freedom, so the applicable law can change the outcome completely. See our article on choice of law in wills.
Inheriting property in Spain: step 2: gather the core documents
- Death certificate, legalised or apostilled and officially translated into Spanish if issued abroad.
- Certificate of last wills from the Spanish central registry, confirming whether a Spanish will exists.
- In particular, the will itself: an authorised copy of the Spanish will, or the foreign will with apostille and sworn translation.
- Where there is no will, a declaration of heirs or the equivalent document from the relevant jurisdiction, or a European Certificate of Succession where available.
- Identification documents of all beneficiaries.
Step 3: obtain a Spanish tax number (NIE)
Every beneficiary needs a Spanish NIE before anything can be filed or registered. Similarly, it can be obtained at a Spanish consulate or in Spain. In particular, in person or through a representative holding a power of attorney. Moreover, this is the single most common cause of delay, so it should be started immediately.
Step 4: identify and value the assets
Furthermore, the inventory must cover the property itself and any other Spanish assets: bank accounts. Similarly, vehicles, shares in Spanish companies and life insurance policies. In addition, for real estate, the starting point is the cadastral reference value, which operates as a minimum taxable base. Declaring a lower value will almost certainly trigger an assessment.
Outstanding mortgages, local property tax, community of owners charges and utility debts should also be identified. Moreover, as they affect both the taxable base and what the heirs actually receive.
Step 5: accept the inheritance before a notary
In fact, the heirs execute a deed of acceptance and division of the estate before a Spanish notary. Foreign heirs normally do this through a power of attorney granted before a notary in their own country, apostilled and translated. This avoids having to travel to Spain.
Acceptance may be pure and simple or a beneficio de inventario, which limits liability for the debts of the estate to its own assets. Where the estate may be insolvent, this decision should be taken before signing anything.
Step 6: pay the taxes
- Inheritance tax: filed within six months of the date of death. In addition, extendable by a further six months if requested within the first five. Reliefs and rates depend on the applicable regional rules, as explained in our guide to Spanish inheritance tax for non-residents.
- Municipal capital gains tax (plusvalía municipal), payable to the local council where the property is located, generally within six months.
In particular, both must be settled before the transfer can be registered. Where the estate has no cash, deferral or instalment arrangements should be requested before the deadline.
Step 7: register the property and update ongoing obligations
Once taxes are paid, the deed is filed at the Land Registry to record the heirs as owners. Similarly, after that, the new owners must update the cadastral records. In particular, the local property tax, the community of owners and the utility contracts.
Moreover, from then on, non-resident owners have annual Spanish obligations: notional income or rental income under non-resident income tax. Similarly, local property tax and, above certain thresholds, wealth tax. We set these out in our guide to owning Spanish property as a non-resident.
If you intend to sell the property
Selling shortly after inheriting is common. Bear in mind that the buyer must withhold 3 % of the price and pay it to the Spanish tax authorities on account of the seller non-resident tax liability. Moreover, as explained in our article on the 3 % withholding and form 211. Furthermore, the acquisition value for capital gains purposes will be the value declared for inheritance tax purposes. This is another reason not to undervalue the property.
Frequently asked questions about inheriting property in Spain
When should inheriting property in Spain be reviewed?
As early as possible. In practice, decisions about inheriting property in Spain are taken at the start of the process and are difficult to reverse later. Moreover, an early review allows you to compare options with real figures.
Do I need professional advice?
Furthermore, inheriting property in Spain combines civil, procedural and tax issues. In fact, most of the problems we see come from cases handled without prior review.
Practical steps when inheriting property in Spain
When inheriting property in Spain, heirs must obtain a NIE, accept the estate before a notary and register the title. In addition, inheriting property in Spain triggers both inheritance tax and municipal capital gains tax.
Conclusion on inheriting property in Spain
Inheriting property in Spain is a sequence, not a single act: applicable law. In addition, documents, tax number, valuation, notarial deed, taxes, registration. Handled in that order and within the deadlines, it is a predictable process. Handled out of order, it becomes costly.
At DiG Abogados we handle Spanish estates for foreign heirs end to end. In particular, including powers of attorney, translations, tax filings and registration. See our international inheritance practice and our Spanish inheritance tax service. You can check the official rules at the Spanish Tax Agency.
Inheritance rules that apply when inheriting property in Spain are set out in the Spanish Civil Code.
Article reviewed by Carmen López, lawyer at DiG Abogados.
