Inheritance tax in Spain for foreign property owners (2026)

In Spain the tax is paid by each heir, not by the estate. Every beneficiary calculates their own bill on the value they receive. Non-resident heirs pay Spanish tax only on assets located in Spain, so a villa in Ciudad Quesada is taxable here even if the owner and the children all live in Manchester, Milan or Munich.

The basic framework is the state law (Ley 29/1987), but the regions set their own reductions and bonuses. Since the state law was amended after the 2014 EU Court judgment (case C-127/12), non-residents can apply the regional rules: if the deceased was not resident in Spain, heirs apply the rules of the region where most of the Spanish assets are; if the deceased lived here, non-resident heirs apply that region's rules. The current wording of the law no longer limits this to EU or EEA residents, which matters for British, Norwegian, Swiss or Ukrainian families. For a home on the Costa Blanca South, that region is the Comunitat Valenciana.

We checked the consolidated text of the Valencian tax law (Ley 13/1997) on the BOE on 12 October 2026. These are the key figures:

• Group I (children under 21): allowance of €100,000 plus €8,000 for each year under 21, up to €156,000.
• Group II (children 21 or over, spouses, parents): allowance of €100,000 each.
• 99% bonus on the tax due for Groups I and II, in force since the 2023 reform (deaths from 28 May 2023).
• Group III blood relatives (brothers, sisters, nephews, nieces, uncles, aunts): a new 25% bonus for deaths from 1 June 2026, rising to 50% from 1 June 2027.
• Disability: an extra €120,000 allowance (33% or more), or €240,000 (65% or more, or a recognised intellectual disability of 33% or more).
• Main home of the deceased: a 95% reduction, capped at €150,000 per heir, for spouse, children or parents who keep it for five years.

Registered unmarried partners are treated as spouses if the partnership is entered in the Valencian register or an equivalent public register; check that your own registration qualifies before relying on it.

Take a widowed owner who leaves a two-bedroom apartment in Playa Flamenca, worth approximately €220,000, to two adult children. Each child inherits €110,000. After the €100,000 allowance, each has a taxable base of about €10,000. The tax on that small base is then reduced by 99%, so each child typically ends up paying well under €100 rather than thousands.

Now imagine the same apartment left to a niece. Group III heirs receive only the much smaller state allowance (around €8,000), a higher multiplier applies and, for a death after 1 June 2026, the bonus is 25%. The bill can easily be tens of thousands of euros. The relationship to the deceased matters far more than the value of the property, which is why we always suggest a quick calculation with a tax adviser before you decide who inherits what.

Inheritance tax must be declared within six months of the date of death. Heirs can ask for an extension of another six months, but the request has to be made within the first five months, and late-payment interest runs during the extension.

The detail that catches families out: the Valencian 99% and 25% bonuses only apply to assets that are fully declared, either within the deadline or late but before the tax office sends a formal requirement. If you wait until the administration writes to you, you can lose the bonus and face the full tax plus surcharges. Resident heirs file with the Agència Tributària Valenciana (form 650); non-resident heirs file with the state tax agency, Agencia Tributaria, applying the Valencian rules.

The taxable value is not simply what you think the house is worth. Since 2022 the Catastro's valor de referencia is the minimum value for most homes, so check it before you declare a lower figure.

Since August 2015 the EU Succession Regulation (650/2012) decides which country's succession law applies: by default, the law of the country where the deceased had their habitual residence, unless they chose the law of their nationality in a will. A British owner living in La Zenia can therefore choose English law, which allows them to leave the house to whoever they wish, while a Spanish-resident owner without that choice falls under Spanish civil law and its forced-heirship rules for children.

A simple Spanish will covering only your Spanish assets, signed before a notary, costs relatively little and is registered in the Central Registry of Last Wills in Madrid. Without one, your family must apostille and translate a foreign will and probate documents, or obtain a Spanish declaration of heirs, which can add many months. Make sure your Spanish and home-country wills do not cancel each other out; the wording matters.

1. Obtain the death certificate (translated and apostilled if the death occurred abroad).
2. Request the certificate of last wills and of life-insurance contracts, available about 15 working days after the death.
3. Get an NIE for each heir who does not have one.
4. Gather the title deed, latest IBI receipt, community-fee certificate and bank statements.
5. Sign the acceptance of inheritance deed before a Spanish notary.
6. Pay inheritance tax within the six-month deadline.
7. Pay the municipal plusvalía (tax on the increase in land value) to the town hall, also within six months; some councils offer reductions for close relatives.
8. Register the property in the heirs' names at the Land Registry and update IBI, utilities and the community of owners.

Remember that your home country may also tax the inheritance; the UK, for instance, has no inheritance-tax treaty with Spain, so the credit for Spanish tax paid has to be checked with an adviser there.

Inheritance tax is not the last bill. If the heirs keep the property and live abroad, each of them becomes a non-resident owner and must file the annual Modelo 210 for imputed income: as a rule, 1.1% or 2% of the cadastral value, taxed at 19% for EU and EEA residents and 24% for others. IBI and community fees continue as before, and if the home is let, the rental income is declared instead.

If the heirs sell, the acquisition value for capital gains purposes is the value declared in the inheritance, so an artificially low declaration means a higher gain later. Non-resident sellers pay 19% on the gain, and the buyer withholds 3% of the price at completion as a payment on account. This is one more reason to declare a realistic value from the start and to get a market valuation before signing at the notary.

We are not lawyers, and this guide is general information, not legal or tax advice: rules change, as the 2025 and 2026 Valencian reforms show, so always confirm your own case with a Spanish lawyer or tax adviser. What we can do is help with the practical side. Many heirs decide to sell an inherited apartment in Torrevieja or Orihuela Costa, or to keep it and let it on a long-term contract, and we give free valuations so you know the real market value before declaring it.

If you are buying now, you can browse property for sale in Torrevieja, homes in Orihuela Costa or Ciudad Quesada, and see current long-term rentals. For a valuation or a recommendation of how to start, contact our team.