Inheriting a property in Spain implies different tax obligations set by each Community and depending on whether the heir is foreign or not: the so-called Inheritance and gift tax.

Night Shoot of a villa  sold by Balearic Properties

Balearic Properties has created a quick guide to be aware of these tax obligations as well as some tips for buyers and their relatives.

First of all, non-resident heirs (Spanish or not) are always concerned by the national law and should assume by higher taxes. This difference has been reported by the European Commission, and will probably disappear in the short term.

The inheritance tax settles a strict deadline of 6 months after the decease, to report to the Spanish Tax Agency (AEAT). If that deadline is not met, the Treasury may fine the heir with penalty interests.

Though, this tax obligation expires after 4 years, 6 months and 1 day after the decease. This means that, after this deadline, the heir is no longer under the legal obligation to pay off the fee. Nevertheless, this period only begins when the Spanish state has official knowledge of the expiration.

Although there are tax treaties between Spain and other countries, most do not include this tax: if you inherit a house in Spain and in the UK, or if you inherit a house in the UK and live in Spain, tax liability includes both countries.

The usual applied form is number 652: “Inheritance tax. Simplified Declaration”. It can only be purchased at the AEAT in Madrid or at the Agencia Tributaria‘s website, and, in case you do not have a NIF, you should request your Foreigner Identity Number at the National Police offices.

The compulsory documentation in these cases is the original document and a certified copy of the Deed of acceptance of inheritance or, failing that, the Record of assets and heirs (in duplicate).

Heirs should also provide copies of the Decease Certificate, Last Will Certificate and Testament or declaration of heirs. If foreign authorities issue the required documents, they should be submitted along with Hague Apostille and sworn affidavit.