Inheritance tax in Spain typically ranges from 7.65% to over 34%, but can be significantly higher for distant relatives or unrelated beneficiaries once regional multipliers apply.
Non-residents are taxed only on Spanish-located assets, while residents may be taxed on worldwide inheritance, with rates and exemptions varying by autonomous community.
This article covers:
- How does inheritance work in Spain?
- What is the maximum amount you can inherit without paying inheritance tax?
- What is the inheritance tax in Spain for foreigners?
- Is there inheritance tax on property in Spain?
- How to reduce inheritance tax liability?
Key Takeaways:
- Inheritance tax rates in Spain vary by region, relationship, and asset value.
- Non-residents are taxed only on Spanish assets, residents on worldwide inheritance.
- Spouses, descendants, and disabled beneficiaries may qualify for significant reductions.
- Planning strategies such as gifts, life insurance, and regional rules can lower tax liability.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is inheritance tax in Spain?
Spanish inheritance tax is a regional tax levied on assets received from a deceased person, including property, cash, investments, and other valuables.
The tax is calculated based on the net value of the inheritance after debts and funeral costs, with rates influenced by:
- The beneficiary’s relationship to the deceased
- The value of the assets inherited
- The autonomous community where the assets are located, as each region sets its own reductions and multipliers
The tax ensures that heirs contribute to government revenue based on the size and type of inheritance they receive.
Does inheritance tax apply to non-residents in Spain?
Yes, non-residents are subject to Spanish IHT but only on assets located in Spain.
Foreign heirs must take note:
- Inherited Spanish property, bank accounts, or shares are taxable in Spain.
- Non-residents may also have tax obligations in their home country depending on double taxation treaties.
- Some regions offer reductions for foreign heirs, but these are usually smaller than for residents.
How much is inheritance tax on a property in Spain?
Inheritance tax on Spanish property ranges from about 7.65% to over 34%, based on market value, debts, region, and relationship to the deceased.
- Calculation: Taxable base = property value minus mortgages, loans, and funeral costs.
- Regional differences: Madrid and Andalusia offer up to 99% relief for close family; Asturias or Catalonia have smaller reductions.
- Relationship to the deceased: Spouses and children pay the lowest rates; distant relatives or unrelated heirs face higher rates.
- Special reductions: Some regions allow deductions for family homes or long-term ownership, lowering the effective tax.
How much can you inherit without paying tax in Spain?
In Spain, heirs can generally inherit anywhere from €0 up to €1 million tax-free. Their relationship to the deceased and the region where the assets are located are key considerations.
- Relationship to the deceased (Kinship Groups):
- Group I – Children under 21: €15,957 plus €3,990 per year under 21 (maximum €47,858 nationally)
- Group II – Children 21+, parents, spouse: €15,957
- Group III – Siblings, aunts/uncles, nieces/nephews, in-laws: €7,993
- Group IV – Distant relatives, unmarried partners, friends, charities: €0
These are national minimum allowances; most autonomous communities offer much higher reductions for Groups I & II.
- Autonomous community rules (Regional reductions 2026):
- Most generous regions: Madrid, Andalusia, Murcia, Canary Islands, Cantabria, Castile and León, Extremadura, Galicia, La Rioja – typically 99–100% reduction for close family, with tax-free thresholds up to €1,000,000.
- Valencian Community (new 2026 reforms): 99% reduction for spouse, children, parents (€100,000 allowance), collateral relatives (siblings, aunts/uncles, nieces/nephews) phased: 25% reduction from June 2026, 50% from June 2027 (€7,993 allowance).
- Moderate to high-tax regions: Catalonia, Basque Country, Balearic Islands, Aragon, Asturias – reductions vary, thresholds lower (€300,000–€700,000), potentially higher effective tax rates.
- Net value of the inheritance: Debts, mortgages, and funeral expenses reduce the taxable base. For example, a property valued at €200,000 with a €50,000 mortgage yields a taxable base of €150,000.
Spouses and direct descendants can often inherit substantial portions tax-free, especially in regions like Madrid or Andalusia.
Distant relatives or non-family beneficiaries may face higher rates, sometimes exceeding 30–34%, particularly in less generous regions like Asturias or Catalonia.
What happens if I inherit a house in Spain?
When you inherit a house in Spain, you are legally required to declare it for inheritance tax, pay any applicable levies, and manage ongoing property obligations.
- Declaration deadline: The inheritance must be declared within six months of the death, though extensions can sometimes be requested.
- Tax calculation: Estate tax is based on the property’s market value minus any mortgages or debts.
- Ongoing obligations: Non-resident heirs must consider annual property taxes (IBI) and potential capital gains tax if the property is later sold.
- Regional reductions: Some autonomous communities provide deductions for primary residences or for family members continuing to live in the house.
Who is exempt from inheritance tax?
In Spain, spouses, children, disabled heirs, small inheritances, and certain charitable transfers can be partially or fully exempt from inheritance tax.
- Spouses and direct descendants: Often receive the largest exemptions, though exact reductions vary by autonomous community.
- Disabled heirs: May qualify for higher allowances or additional relief.
- Small inheritances: Estates below regional thresholds can be fully or partially exempt.
- Charities and foundations: Transfers to qualifying organizations may avoid inheritance tax in some regions.
Note that exemption rules differ significantly across Spain’s autonomous communities.
How to pay Spanish inheritance tax?
To pay inheritance tax in Spain, you must declare the inheritance, calculate the tax owed, and pay it to the regional tax authorities, following official deadlines and procedures.
1. Obtain a certified death certificate from the local civil registry.
2. Apply for a Spanish tax identification number (NIE) if you are a non-resident heir.
3. Prepare and file the inheritance tax declaration within six months of the death. Extensions may be requested from the regional tax office.
4. Calculate the taxable value of the assets by subtracting debts, mortgages, funeral expenses, and applying exemptions or regional reductions.
5. Pay the inheritance tax to the relevant autonomous community tax office, usually via bank transfer or approved payment method.
6. Register property transfers at the Land Registry if real estate is inherited, ensuring legal ownership is formally updated.
How to avoid paying inheritance tax in Spain?
You can legally reduce inheritance tax in Spain by using strategies such as lifetime gifts, life insurance, regional exemptions, or careful estate structuring.
- Lifetime gifts: Assets given before death may fall outside inheritance tax if properly structured and documented.
- Life insurance: Policies that pay beneficiaries directly can bypass the estate, reducing taxable assets.
- Regional exemptions: Establishing residency or inheriting in regions with generous reductions (e.g., Madrid, Andalusia) can significantly lower tax liability.
- Trusts or holding companies: Holding assets in certain structures may reduce exposure, but require careful planning and professional advice.
What taxes do you pay in Spain as a non-resident?
As a non-resident in Spain, you are taxed only on Spanish-source assets and income, not on worldwide assets.
- Inheritance tax: Payable on assets located in Spain, such as property, bank accounts, or shares in Spanish companies.
- Property taxes (IBI): Annual municipal tax due if you own Spanish real estate.
- Capital gains tax: Payable if you sell inherited Spanish property, calculated on the gain from the declared inheritance value to the sale price.
Conclusion
Spain inheritance tax is complex and varies widely depending on the beneficiary’s relationship, the region, and the type of assets inherited.
Planning ahead, understanding regional rules, and leveraging legal strategies can significantly reduce tax liability.
For non-residents, careful attention to Spanish declaration requirements, property taxes, and potential capital gains is essential.
Staying informed and seeking professional guidance ensures that heirs preserve as much of their inheritance as possible while complying with Spanish law.
FAQs
Which country has the highest inheritance tax?
Japan has the highest inheritance tax rate among major economies, with a marginal rate of 55%.
South Korea follows with a top rate around 50%, and several European countries such as France and the UK have top rates between 40% and 45%.
Who is disqualified from inheriting under a will?
Under Spanish law, a person can be disqualified from inheriting if they are legally deemed unworthy to inherit, even if they are named in a will.
This applies to individuals who have committed serious acts against the deceased, such as violence, abuse, fraud, coercion, or manipulating or destroying a will, as set out in Articles 756–757 of the Spanish Civil Code.
What is the Beckham loophole in Spain?
The Beckham Law is a special tax regime in Spain that allows qualifying foreign workers to be taxed on a flat rate of 24% on Spanish-source income (up to €600,000) and only on Spanish income, instead of the higher progressive rates that apply to regular residents.
It does not provide a general inheritance tax exemption or lower inheritance tax rates, and inheritance/gift tax is still calculated under the normal rules of the relevant autonomous community.
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