14. Spanish will & inheritance tax

Bought a house? Then don´t forget about your Spanish will & inheritance tax. With a Spanish will you appoint your own country´s inheritance law and leave your house to the longest-living. Also very important for inheritance tax: register in the Registry de Pareja de Hecho if you´re not married and will inherit a Spanish property. Non-married couples are in the highest tax scale (4) and foreign registries aren´t acknowledged in Spain.

Click here for the other chapters of ´LEGAL ADVICE BUYING HOUSE IN ANDALUSIA´. 

BREXIT consequences for UK citizens with properties in Spain

N.B. This chapter contains general information for EU members. In relation to the BREXIT, we expect some kind of similar future deal between the UK and Europe and/or Spain for British people with assets in other European countries.

Remember that ´already putting the house in name of the children’ isn´t an attractive option. It is seen as a normal sale/purchase by the Spanish Tax Office. And so it has its fiscal consequences. This means 7% ITP Transfer Tax (permanently lowered) for the buyer (plus other costs) and for the seller Capital Gain Tax / Plusvalia. Also, non-resident heirs would need to pay IRNR income tax in Spain every year. 

Choice inheritance law and heirs Spanish will

Resident in Spain? Appoint your heir(s) and national inheritance law through a last will (testament).
Resident in Spain? Appoint your heir(s) and national inheritance law through a last will (testament).

Especially for fiscal residents in Spain, the last will is necessary if you first want to leave to each other and then later to the children. In Spain there´s no benefit to leaving directly to your children. This is because the Tax Office doesn´t charge inheritance tax between close family (spouses, children, grandchildren, parents). If there is tax to be paid, this is calculated over the minimal fiscal value of the property (minus potential mortgage debts).

But also for non-fiscal residents, a Spanish will is advisable. The reason for this is the costs and bureaucracy for the heirs during the Spanish inheritance process.

The Spanish will is often signed after the final balance meeting with the lawyer when all after-sales works have finished (about 4 months after completion at the notary). The signing is done in person at the notary and can´t be done by Power of Attorney.

Advice: check old Spanish will and world assets

Do you have a Spanish will from before 2015? Then ask a lawyer/solicitor to check this new clause for the choice of inheritance law of your nationality (passport). If it has no or an incorrect description this clause namely is invalid.

Another tip: a Spanish will normally only applies to Spain. But with a small adjustment, it will apply to your worldly assets. This maybe saves you costs for the last will in your own country (if you wish to appoint the same heirs).

High inheritance tax for non-married couples

Even though you can appoint the inheritance law of your home country, the inheritance tax (if applicable) of course is paid in Spain. IMPORTANT ADVICE: Spain doesn´t acknowledge foreign registries for official partnerships. So in future, you don´t want to pay up to 25% over the minimal fiscal value of the property? Then you either need to get married or you need to get registered in Spain. This you can do at the Registro de Pareja de Hecho (through the Town Hall).

Do you have the same situation in your home country with a high inheritance tax? Then marriage is 1 solution for 2 problems at once.

 Referrals & references real estate agent & lawyer:

Need a referral for a good estate agent in Andalusia? Or like to receive an example offer for the legal investigation of a specialized and independent lawyer? Find out more through the link above. 

©2023, Ariane van Wijk