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The Spanish inheritance tax is a tax on the goods of someone who has passed away, just like in many other countries. This tax includes property, money and any other kind of assets.
The amount owed depends on several factors, including the value of the estate, the relationship between the heir and the deceased, and the region in which the property is located, as tax laws vary across Spain’s autonomous communities. For this reason, working with our inheritance solicitors ensures that heirs pay the correct amount and can claim every allowance available.
Inheritance and Gift Tax (ISD) in Spain is levied on assets inherited after a person's death. It affects both residents and non-residents: residents are taxed on their worldwide assets, while non-residents are only taxed on assets located in Spain.
Each autonomous community sets its own reductions and rates, which can significantly change the tax burden. The tax is calculated based on the total value of the inheritance (money, real estate, investments, or businesses) using a progressive system: the larger the inheritance, the higher the percentage applied. In addition, factors such as the degree of kinship with the deceased and the heir's assets are taken into account. Our experienced lawyers can plan ahead to reduce the overall burden on your heirs.
Inheritance tax in Spain must be paid within six months from the date of the deceased’s death. However, if more time is needed, you can request a six-month extension within the first five months. If the tax is not paid on time and no extension is requested, penalties and interest may apply. It’s important to consult with Pellicer&Heredia legal advisor to ensure compliance with deadlines and minimize any financial impact.
Inheritance tax in Spain is calculated based on the value of the total assets the heir inherits. These taxable assets include a wide range of items such as real estate, bank accounts, investments, shares, vehicles, and personal belongings like jewelry, art, or valuable collections.
The tax is progressive: it ranges from 7.65% to 34%, depending on the value of the inheritance. Each autonomous community can modify rates, thresholds, and deductions, so the amount varies depending on the region.
Close relatives (children, spouses, parents) pay less and have more exemptions. Distant relatives or unrelated persons pay more. There are additional deductions based on the age, health, or disability of the heir.
Each autonomous community regulates its own reductions and allowances. Madrid applies significant tax benefits for close family members, while in other regions the tax burden is higher.
In the Valencian Community, there are reductions, but they are more limited than in Madrid or Andalusia. Close heirs benefit from exemptions (especially those under 21 and spouses), although high net worth individuals continue to be taxed. In addition, there are benefits for disability or if the primary residence is inherited.
The government reduced inheritance tax deductions in 2013: previously they could be as high as 99%, but now they are limited to 50% and only for certain relatives.
Non-EU residents in Spain paid more inheritance tax because they were only eligible for state regulations, while EU residents enjoyed regional benefits. In 2014, the EU recognized these benefits for EU residents, but excluded non-EU residents. In 2021, the Spanish Supreme Court ruled in favor of a Canadian citizen, also recognizing his right to regional reductions and ordering the refund of excess taxes. This ruling, backed by European precedents, was a key step forward against tax discrimination against non-EU residents.
Spain has double taxation agreements with numerous countries (such as the United Kingdom, the US, and much of the EU) to prevent heirs from paying inheritance tax twice. These agreements allow for compensation between what is paid in one country and what is owed in the other. The conditions vary depending on the agreement, so if there is no agreement, the risk of double taxation increases. It is therefore essential that non-resident heirs seek specialized tax advice in order to apply the available deductions and comply with the regulations of both countries.
Avoiding or reducing inheritance tax in Spain requires careful planning and understanding of Spanish tax laws. Here are some strategies that can help minimize the tax burden:
At Pellicer & Heredia, our solicitors provide professional legal and tax advice, you can ensure to comply with both Spanish and international regulations and that your estate plan is tax-efficient.
No, in Spain heirs are not obliged to accept an inheritance. You may accept it fully, accept it “under benefit of inventory” (which limits your liability to the inherited assets), or renounce it. Many heirs choose the second option to avoid inheriting debts that exceed the value of the estate.
No, in Spain heirs are not obliged to accept an inheritance. You may accept it fully, accept it “under benefit of inventory” (which limits your liability to the inherited assets), or renounce it. Many heirs choose the second option to avoid inheriting debts that exceed the value of the estate.
In Spain, inheritance tax must be filed and paid within six months from the date of death. You may request a one-time extension of another six months. If you miss the deadline without extension, penalties and interest for late payment will apply, which can significantly increase the amount owed. In some cases, tax authorities may also freeze inherited assets until the tax situation is resolved.
The amount depends on several factors: the relationship between the heir and the deceased, the autonomous community where the assets are located, applicable allowances, and the heir’s existing wealth. For example, children and spouses often benefit from generous regional deductions, while distant relatives or unrelated heirs may face higher rates. As a rough estimate, without regional deductions, inheritance tax on €1 million could range from 200,000 to over 400,000 euros, but with regional allowances it may be considerably reduced.
