Spain · Tax · Information, not legal advice — as at 28 June 2026
How does Spanish inheritance tax work for non-residents?
Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones) is charged on what each heir receives in Spain, on a sliding scale, with large reductions for close family. Since 1 January 2015 a non-resident inheriting Spanish assets may apply the reductions of the relevant Spanish region instead of the harsher state-only rules — and several popular regions reduce the tax to almost nothing for spouses and children. The detail is fact-sensitive, so take regional tax advice on your own figures.
This guide is general information, not tax advice. Carroll Law handles a Spanish estate on both sides — who inherits and how the assets transfer, and the Spanish inheritance tax itself: we compute it, prepare the return and file it as part of the work. Tax back home is not ours, and we say plainly and early where an adviser there is needed.
Who pays Spanish inheritance tax?
Spanish inheritance tax is paid by each heir on what they personally receive, not by the estate as a whole, and the rate rises with the amount and with how distant the relationship is. A non-resident is taxed in Spain on the assets located in Spain (the property, the Spanish bank account), under what is called obligación real. Close relatives — a spouse, children and parents (tax Groups I and II) — are treated far more generously than distant ones.
Why 2015 changed everything for non-residents
Spanish inheritance tax is a state tax, but each autonomous region sets its own reductions and allowances, which are often dramatically more generous than the state defaults. Until 2014, non-residents were locked out of those regional reductions and taxed on the harsher state scale. The Court of Justice of the EU held this unlawful discrimination (Case C-127/12, 3 September 2014), and Spain changed the law (Law 26/2014, in force from 1 January 2015) so that non-residents may apply the relevant region’s reductions. Later Spanish Supreme Court and tax-authority rulings extended the same equal treatment to residents of non-EU/EEA countries. The practical effect: a non-resident family is now usually entitled to the same favourable regional treatment as a local family.
Which region’s rules apply to a non-resident?
If the person who died lived in a Spanish region, that region’s rules apply; if they lived abroad, it is generally the region where the most valuable of the Spanish assets is located. So if the estate is a flat on the Costa del Sol, Andalucía’s rules will usually govern; a villa on the Costa Blanca points to the Valencian Community, and so on. This matters enormously, because regions differ widely.
How much is actually payable for close family?
For spouses and children (Groups I and II), several of the most popular expat regions have, in recent years, reduced the effective tax to little or nothing — for example Andalucía, Madrid, Murcia and the Valencian Community have all introduced very large reductions or rebates for close family. The exact percentages, ceilings and conditions change from year to year and from region to region, so the figure for your family must be confirmed for the region and the year in question. The headline point is that a close-family inheritance on the costas is often taxed very lightly — but it is never safe to assume a precise number without checking.
When is it due, and what about tax at home?
The return and any payment are generally due within six months of the death, with an extension available if applied for in time, and the tax usually has to be dealt with before the property can be registered or the bank will release funds. Separately, your home country may still tax the same estate — UK inheritance tax, for instance, can apply to a UK-domiciled person’s worldwide assets, with relief for tax paid in Spain. Coordinating the two is a job for a tax adviser, and we will tell you when to bring one in.
The actual numbers — a worked example
Take a €200,000 flat on the Costa del Sol passing to one adult child living in the UK. Under the bare state rules, the child’s allowance is just €15,956.87, and the sliding scale on the rest produces a bill of roughly €28,000. Under the Andalucía rules the same child has a reduction of up to €1,000,000 (subject to a modest pre-existing-wealth condition) with a 99% rebate on any excess — and pays nothing. Madrid and the Valencian Community run 99% rebates of their own for close family. That is the size of what the regional election is worth, and why it is made deliberately, never by default. Since 2022 Spanish property is assessed on the official valor de referencia where higher than the declared value — the number is checkable in advance, so the tax can be computed before anyone commits to anything.
One honest caveat for UK-taxable estates: where the regional rules reduce the Spanish tax to nearly nothing, there is correspondingly little Spanish tax to credit against UK inheritance tax — the UK side then takes over, which is a conversation for your UK adviser, and one we make sure happens at the right moment rather than after the fact.
So, in short
Since 2015 non-residents are no longer penalised: you can use the regional reductions, which on the main expat coasts often make close-family inheritance tax very small. But the numbers are fact-sensitive and change, so treat this as orientation and confirm your own position with a qualified Spanish tax adviser.