Inehritance tax law in Marbella, Andalucia

When a non-resident of Spain owns property in Marbella or elsewhere in Spain and passes away, the inheritance process is governed by Spanish inheritance laws and relevant international treaties. Here’s a straightforward guide to understanding how this situation is managed, particularly in Andalusia:

  1. Applicable Laws

EU Succession Regulation (Brussels IV):
If the deceased passed away after August 17, 2015, this EU regulation allows EU citizens to choose whether the law of their nationality or their country of residence will apply to their estate in Spain. If no choice is made, the law of the country where they lived habitually at the time of death usually applies. Spanish law, however, governs procedural aspects of the inheritance in Spain.

Spanish Law:
If Spanish law applies, the concept of “forced heirship” becomes crucial. This means a portion of the estate must be left to certain heirs (such as children or spouse), regardless of what the will specifies.

  1. Inheritance Tax (Impuesto sobre Sucesiones y Donaciones)

General Rules:
Inheritance tax in Spain is levied on assets located in Spain, irrespective of the heir’s residency. The tax rate varies based on the relationship between the deceased and the heir and the value of the inheritance.

Regional Variations in Andalusia:
Andalusia offers generous tax exemptions. For instance, if you inherit property in Andalusia, you can benefit from significant reductions. Spouses and children can inherit up to €1,000,000 tax-free, and any amount above that is taxed at only 1%​ (Davies Abogados /Spanish lawyers).

Non-EU Heirs:
Recent rulings have extended these tax benefits to non-EU residents, making it easier for heirs from countries like the UK and the USA to benefit from Andalusia’s favorable inheritance tax laws​ (Tejada Solicitors)​ (Davies Abogados /Spanish lawyers).

  1. Transferring Property Ownership

Probate Process:
Regardless of the deceased’s residency, property in Spain must go through probate in Spain. This involves presenting the will (if available) or following intestacy rules, and formal acceptance of the inheritance by the heirs.

Payment of Taxes:
Before transferring property to the heir, inheritance tax must be paid. Delays or complications can arise if this tax is not settled promptly.

Legal and Notary Fees:
Heirs will incur various fees, including notary and registration fees, as well as potential legal costs during the transfer process.

  1. Obligations for Heirs

Declaration of Foreign Assets:
If the heir is a resident of Spain, they must declare inherited foreign assets, including property in Marbella, in their annual tax return under the Modelo 720 declaration​ (Tejada Solicitors).

  1. Practical Steps for Heirs

Seek Legal Assistance:
It’s advisable to consult with a lawyer who specializes in Spanish inheritance law and cross-border estates to navigate this complex process effectively.

Gather Documentation:
Heirs need to collect various documents, such as death certificates, the will (if available), identification documents, and property deeds.

Tax Advice:
Consulting with a tax advisor is crucial to understand the implications in both Spain and the heir’s country of residence.

Conclusion

Inheritance of property in Marbella for non-residents involves navigating Spanish law, potential EU regulations, and possibly the laws of the deceased’s home country. Professional advice is highly recommended to manage this process efficiently and to minimize any potential tax liabilities.

This blog post aims to provide clarity on the inheritance process for non-residents owning property in Andalusia, especially in light of recent legal updates that offer significant tax benefits. For more personalized guidance,  CA Estates Marbella will be happy to help you find your legal expert that’s familiar with Spanish inheritance laws.

Join The Discussion

Compare listings

Compare
Translate Website »
Contact Us on Whats App