Inheriting Property in Spain as a Foreigner or Non-Resident

Many foreigners own a home, a bank account or a car in Spain, and many more inherit one from a parent or partner who retired there. A Spanish inheritance follows its own path even when the family lives elsewhere: the assets stay frozen until the heirs have accepted them before a Spanish notary and dealt with the Spanish tax. This guide is for heirs living abroad and for foreigners who want to plan ahead. It explains which law decides who inherits, how a Spanish will helps, the documents and steps after a death, the taxes by name, and where a lawyer usually steps in.

Which country's law decides who inherits

Since August 2015, inheritances across most of the EU have followed the EU Succession Regulation (Regulation No 650/2012). Spain applies it to every death, whatever the nationality of the person who died. Its basic rule is simple: one law governs the whole estate, and that law is the law of the country where the person had their habitual residence at death. A Briton who lived in Spain for years therefore leaves an estate governed by Spanish law, unless they chose otherwise.

They can choose otherwise. Instead, a person may opt, in a will, for the law of the country whose passport they hold. This choice of law also works when that law is from outside the EU, which is why many British, American and other foreign owners write it into their wills. It matters because Spanish law protects close family through forced heirship: a share of the estate, the legítima, is reserved for children (or, without children, for parents), and a surviving spouse has a life interest in part of it. Several regions with their own civil law, such as Catalonia, Aragon, Navarre, the Basque Country, Galicia and the Balearic Islands, set different shares and rules. A chosen foreign law may give the testator much more freedom.

The choice of law concerns who inherits. It does not change which country taxes the inheritance, nor the Spanish procedures for transferring a home or a bank account.

Planning ahead: a Spanish will

Owners of Spanish assets often sign a Spanish will before a notary, the testamento abierto notarial. The notary keeps the original and records it in the central register of wills, the Registro General de Actos de Última Voluntad, so the heirs can find it later. A will limited to Spanish assets can sit beside a will made in the home country, as long as each is worded so that it does not revoke the other. That combination usually spares the heirs from having a foreign will translated, legalised and explained to a Spanish notary. Lawyers who help foreigners make a will also check that a choice of law is stated in a form Spain recognises, and broader questions about protecting a family fall under probate law.

After a death: the first documents

The work starts with gathering papers. When the death occurs in Spain it is recorded at the Spanish civil registry; when it occurs elsewhere, the foreign certificate needs an apostille and a sworn translation. Families who also face a funeral, a repatriation or a hospital abroad can find help under dealing with a death abroad. The usual documents are:

• the death certificate, Spanish or foreign with apostille and translation;
• the certificado de últimas voluntades, issued by the register of wills after a short waiting period, which shows whether a Spanish will exists and which notary holds it;
• the certificado de contratos de seguros de cobertura de fallecimiento, which shows life insurance policies taken out in Spain;
• an authorised copy of the last Spanish will, or the foreign will with an apostille, translation and, where needed, a lawyer's opinion on the foreign law;
• a declaración de herederos, made before a notary, when there is no will at all;
• an NIE for every heir, see NIE number application;
• bank certificates of the balances on the date of death, and registry extracts and the latest IBI receipt for each property.

Spanish certificates from the civil registry can be ordered through lawyers who handle birth, marriage and death certificate applications.

Accepting the inheritance before a notary

Heirs do not become owners in practice until they accept. In Spain this is done in a notarial deed, the escritura de aceptación y adjudicación de herencia, which lists the assets and their values and shares them out between the heirs. The steps usually run as follows:

1. The lawyer collects the documents above and values each asset.
2. The heirs agree how the estate is divided; if they disagree, the deed cannot be signed until the dispute is settled or decided by a court.
3. The heirs, in person or through a power of attorney, sign the deed before a notary.
4. The inheritance tax returns are filed and paid.
5. The deed is presented to the Land Registry so that homes and land are registered in the heirs' names.
6. The banks release the accounts once they have the deed and proof that the tax has been dealt with.

An heir is not obliged to accept. They can renounce (renuncia) in a notarial deed, which is common when the estate has debts, or accept a beneficio de inventario, which limits their liability for debts to the value of what they inherit. For estates spread over several EU countries, a notary can also issue a European Certificate of Succession, a document that heirs use to prove their status in other member states. Lawyers handling inheritance in Spain coordinate all of this, often for families who never travel; many of them work in areas popular with foreign owners, such as Torrevieja, Fuengirola or Mallorca.

Taxes on an inheritance, by name

The main tax is the Impuesto sobre Sucesiones y Donaciones (inheritance and gift tax, often shortened to ISD). It is a national tax, but the autonomous regions run it and set their own allowances and reliefs, which differ enormously between regions and by how closely the heir was related to the person who died. Each heir is taxed on what they receive, not the estate as a whole. Non-residents pay on assets located in Spain; the state's form for an inheritance is Modelo 650, and some regions use their own. Rulings of the EU Court of Justice and of Spain's Supreme Court have opened the regional rules to many non-residents, who were once confined to the less generous state rules, so the region that applies is something a lawyer checks in each case.

The return is due within a period counted from the date of death, which can be extended if asked for in time; late returns bring surcharges and interest. Two further taxes often appear. The plusvalía municipal is a municipal levy on the increase in value of the land under a home, charged when it passes to the heirs. If the heirs later sell, the gain is taxed as income, see capital gains tax. The heirs' own country may also tax the inheritance, and only a few tax treaties cover inheritances, so credit for Spanish tax is worth checking at home.

Disputes, sales and other situations

Not every estate goes smoothly. A child left out of a will may claim the forced share, or a will may be challenged for the testator's lack of capacity or a defect of form, see contest a will. Heirs who own a home together but cannot agree whether to sell often end up with a court-ordered division or sale; lawyers for co-ownership disputes and termination handle that. Heirs who agree to sell can do so once the home is registered in their names, through the usual property sale process, which can also be completed from abroad.

Questions and answers

Do I pay inheritance tax in Spain if I live abroad?

On assets located in Spain, yes, as a rule. A non-resident heir is taxed in Spain on the Spanish home, account or shares they receive, under the national tax whose allowances depend on the region. The home country may tax the same inheritance too.

Can a British citizen choose UK law in a Spanish will?

Yes. The EU Succession Regulation lets anyone choose the law of their nationality, even a non-EU law, in a will. Spain then applies that law to who inherits, though Spanish procedures and Spanish tax still apply to the assets there.

Is a Spanish will needed if there is already a will at home?

It is not compulsory, but a separate Spanish will for Spanish assets usually makes the process faster and cheaper for the heirs, because a foreign will has to be legalised, translated and explained before a Spanish notary.

Who inherits in Spain if there is no will?

The law that governs the estate decides who inherits. In Spain the heirs are first confirmed in a notarial declaration of heirs, the declaración de herederos, and then accept the estate in the usual deed.

How long does inheritance take in Spain?

It varies with the documents. Gathering foreign certificates, translations and NIEs usually takes the longest; once these are ready, the deed, the tax and the registration follow in a fairly predictable order.

Can I refuse an inheritance in Spain?

Yes. An heir can renounce before a notary, or accept with the benefit of inventory to limit liability for the estate's debts. A renunciation is final, so families usually check the debts first.