Inheriting property in Spain: what to do, costs and how to manage it

Inheriting a flat is one of the most complex moments in many people's lives: there is urgent paperwork, taxes to pay, decisions to make and often family conflicts in the middle of it all. This guide takes you through the process step by step without unnecessary jargon.

The deadlines you can't ignore

The Impuesto de Sucesiones (Spanish inheritance tax) must be settled within 6 months of the death (extendable by another 6 months if requested within the first five months). If you file late without Hacienda (the Spanish tax authority) having asked you to, the surcharge is 1% plus another 1% for each full month of delay, with no late-payment interest; after 12 months, it is 15% plus late-payment interest. It's the most urgent deadline in the whole inheritance.

What paperwork has to be done and in what order

1. Death certificate and the certificate from the registro de últimas voluntades (the Registry of Last Wills): Essential to find out whether there is a will.
2. Declaración de herederos (the declaration of heirs) (if there is no will) or an authorised copy of the will (if there is one).
3. Inventory of assets: Flats, bank accounts, vehicles, debts.
4. Settling the Impuesto de Sucesiones: It is paid in the region where the deceased lived. There are huge differences between the CCAA (comunidades autónomas, Spain's regions): in Madrid, the tax relief is almost total for the spouse and children.
5. Deed of acceptance of the inheritance: Before a notary, so that the property can be registered in the heir's name in the Registro de la Propiedad (the Land Registry).
6. Registration with the Catastro (Spain's property cadastre) and the Registry.

Accept or renounce the inheritance?

If the property has more debts than value (an outstanding mortgage, charges, derramas, i.e. one-off levies by the owners' association), it may be better to renounce it. The renunciation must be made before a notary. Watch out: if you suspect there may be debts, accept "a beneficio de inventario" (with the benefit of inventory) to limit your liability to the value of the inherited assets; once you have accepted an inheritance, the acceptance is irrevocable.

What to do with the inherited flat

The options: keep it and let it (you need to register it in your name first), sell it (with a possible capital gain taxed under the IRPF, Spanish personal income tax), or keep it for your own use. If there are several heirs, they must all agree. If there is no agreement, any heir can apply for the division of the jointly owned property (dissolution of the co-ownership or a court-ordered sale).

Also read: Plusvalía municipal (the local tax on the increase in land value) when you sell and IRPF on the sale of the inherited flat. Use RadarPro to value the inherited property before deciding what to do.