As a Belgian with property in Spain, Spanish inheritance tax will be due on your estate. Spanish inheritance tax is partly regulated at national level and partly at regional level and is therefore very complex. This contribution will explain the calculation method of Spanish inheritance tax explain. However, you should not forget that in addition to Spanish inheritance tax, the inheritance tax in Belgium may be applicable.
When do I pay Spanish inheritance tax?
Inheritors owe Spanish inheritance tax if they are resident in Spain or if there are assets located in Spain in the estate.
Inheritance tax in Spain is calculated based on the inheritance of the heir and not on the entire estate itself. However, different deductions apply which are determined by the regions. Property values are determined by the Spanish government. Spain applies a minimum reference value per property. This tax reference value is the starting point for inheritance tax. We can request this estimate for you.
Note: Heirs cannot dispose of the estate until they have paid the inheritance tax.
Spanish inheritance tax for residents and non-residents
Before 2015, residents and non-residents were treated unequally in Spain. The European Court of Justice condemned Spain for this. After 2015, the Spanish legislature amended the inheritance tax so that equal treatment does now exist and non-residents can also enjoy reductions. In addition, there is a right to a refund of overpaid tax for bequests prior to 2015.
Spanish inheritance tax is taxed at a rate from 7.65% to 34%.
However, several reductions are possible.
- Descendants up to 21 years of age are entitled to taxable minimum from €15,956.87 to €47,858.59, depending on age.
- The heirs in direct line, first degree (children and parents) older than 21 years and the surviving spouse are entitled to a taxable minimum from €15,986.87.
- Other family members are entitled to a taxable minimum from EUR 7,993.46.
These are minimum conditions. Each region can increase the taxable minimum. Below, we discuss reductions in some autonomous regions.
In the region of Valencia
- Descendants up to 21 years of age are entitled to taxable minimum from €100,000 to €156,000 depending on age and an additional tax credit of 75%.
- The heirs in direct line, first degree (children and parents) older than 21 and the surviving spouse are entitled to a taxable minimum of euro100,000 and an additional tax reduction of 50%.
In case of permanent residence in Valencia, the taxable basis of the family home will be reduced by 95% with a maximum reduction of €150,000 provided that:
- the heirs in the first degree and/or the surviving spouse are older than 65 and lived with the testator for two years prior to death;
- the property was used as a family home for five years prior to death.
In the region of Murcia
First-degree descendants under 21 years of age are entitled to a tax rate reduction of 99% on the family home. Descendants over 21 and the surviving spouse can enjoy a reduction of 60% on the tax rate. Update: From January 2018, the reduction is 99%.
In the region of Andalusia
In Andalusia, the taxable basis of the family home is reduced by 99.99% in case of permanent residence in Spain. In addition, there is a taxable minimum in the amount of €1,000,000 for the heirs in direct line, the first degree (children and parents) and the surviving spouse.
Update 2019: Inheritances in Andalusia above the taxable minimum of €1,000,000 will be exempt for 99%.
Last update: March 2022.