What Happens to Your Spanish Property When You Die: Inheritance Rules for Foreign Owners

When a foreign owner of Spanish property dies, two separate sets of rules switch on at the same time: the civil rules that decide who inherits the property, and the tax rules that decide what the heirs pay to receive it. These are governed by different laws and, since the EU Succession Regulation came into force, can even point to different countries. Foreign owners are frequently caught out because they assume the law of their home country handles everything. In Spain it does not. This guide walks through what actually happens to a Spanish house, apartment, or villa when its foreign owner dies.

Who inherits a Spanish property when the foreign owner dies?

By default, the law of the deceased's country of habitual residence at the time of death decides who inherits, under EU Regulation 650/2012. The regulation, often called Brussels IV, has applied to deaths since August 17, 2015, and it determines the civil succession of the whole estate, including Spanish real estate. So a German national who lived in Germany and owned a holiday flat in Alicante has German succession law applied to that flat unless they chose otherwise in a will.

Can a foreigner choose their own national law for a Spanish property?

Yes. Article 22 of Regulation 650/2012 lets any person elect the law of their nationality to govern their entire succession, a choice known as professio iuris, as long as it is made expressly in a will. This is the single most important step a foreign owner can take. A British or American owner who elects the law of England or of their US state can avoid Spain's forced heirship rules entirely, because those systems allow a person to leave property to whomever they choose.

What is forced heirship in Spain?

Forced heirship, called the legítima, reserves a fixed portion of the estate for close family even against the wishes expressed in a will. Under the Spanish Civil Code (Código Civil, articles 806 to 808), when the deceased leaves children or descendants, two thirds of the estate is reserved for them. One third is divided equally among the children as the strict legítima, and a second third, the tercio de mejora, must also go to descendants although the parent can decide how to split it. Only the final third can be left freely to anyone.

Does the surviving spouse inherit the property automatically?

Not outright. Under the Spanish Civil Code the surviving spouse is entitled to a usufruct, a lifetime right to use the property and its income, over the tercio de mejora when there are children, not to full ownership of it. If the will elected a foreign national law under Regulation 650/2012, the spouse's rights follow that foreign law instead, which is one more reason the choice of law matters so much for couples.

Does EU Regulation 650/2012 also decide the inheritance tax?

No. Regulation 650/2012 governs civil succession only, meaning who inherits, and it explicitly excludes tax. Spanish inheritance tax applies to Spanish-situated assets regardless of which civil law governs the succession. So a foreign owner can elect English law to avoid the legítima and still owe Spanish inheritance tax on the Spanish property.

What inheritance tax do heirs pay on a Spanish property?

Heirs pay the Impuesto sobre Sucesiones y Donaciones (ISD), Spain's inheritance and gift tax, set out in Law 29/1987 and Royal Decree 1629/1991. The tax is paid by each beneficiary individually on what they receive, not by the estate as a whole. The state scale runs from 7.65 percent up to 34 percent, and the result is then multiplied by a coefficient based on the heir's relationship to the deceased and their existing wealth, so distant heirs can face an effective rate well above the headline figure.

Are inheritance tax rates the same across Spain?

No, and the differences are enormous. Spain's seventeen Autonomous Communities can set their own reductions and rebates, and several apply a 99 percent rebate for close family. Andalusia, the Region of Madrid, the Valencian Community, and the Region of Murcia all effectively reduce inheritance tax close to zero for spouses, children, and parents (Groups I and II). The same inheritance that costs almost nothing in Andalusia can carry a real bill in a region with fewer reliefs, so where the property sits changes the outcome.

Can non-resident and non-EU heirs use the regional tax reductions?

Yes. After the Court of Justice of the European Union ruled against Spain in case C-127/12 on September 3, 2014, Spain changed its law so that non-resident heirs in the EU and EEA could apply the regional rules. Spanish Supreme Court rulings in 2018 then extended the same treatment to residents of non-EU countries. In practice an American or Canadian heir of a property in Valencia can now apply the Valencian Community's reductions, filing with the central tax agency.

How long do heirs have to pay Spanish inheritance tax?

The deadline is six months from the date of death. A six-month extension can be requested, but only if the request is filed within the first five months. Missing the deadline triggers surcharges that rise with the delay plus late-payment interest, and the property cannot be transferred into the heirs' names at the Land Registry until the tax is settled.

What documents are needed to inherit a Spanish property?

The heirs need the death certificate, a certificate from the Registro General de Actos de Última Voluntad confirming whether a Spanish will exists, the will itself, and a Spanish NIE number for each heir. With these, a notary draws up the deed of acceptance of inheritance (escritura de aceptación de herencia), the ISD is paid using Modelo 650, and the property is then registered to the heirs at the Registro de la Propiedad. A European Certificate of Succession issued under Regulation 650/2012 can replace several of these documents for estates with an EU element.

Is there any other tax besides inheritance tax?

Yes. The local town hall levies the plusvalía municipal (IIVTNU) on the increase in the cadastral land value since the deceased acquired the property. This municipal tax is separate from the national ISD, is due to the ayuntamiento where the property is located, and also has a six-month filing window from the date of death.

What happens if the foreign owner dies without a will?

The succession is decided by the intestacy rules of whichever law applies under Regulation 650/2012, which by default is the law of the country where the deceased habitually lived. With no will there is no professio iuris election, so an owner habitually resident in Spain will have Spanish intestacy and the legítima applied to the property. This is the scenario foreign owners most want to avoid, and it is why a Spanish will or a will that expressly elects national law is the standard recommendation.

The practical takeaway

A foreign owner who wants their Spanish property to pass according to their home country's rules should make a will that expressly elects their national law under Regulation 650/2012, keep it registered, and understand that Spanish inheritance tax will still apply to the property no matter which civil law governs who inherits. The civil side and the tax side are two separate questions, and planning for only one of them leaves the other exposed. Bektu exists to make these cross-border rules transparent before a purchase, not after a death, so the people who inherit are not the ones discovering them.