How Spanish inheritance and gift tax works

Key rules

• Who pays: Each heir pays separately on what they personally receive.
• Region: Regional rules can change reductions, tariff and multipliers, so the result can differ a lot from the state figures.
• Family group: Your relationship to the deceased sets your reduction and your multiplier; Group IV gets no state reduction.
• Family home: The state reduction is 95% of the value of the deceased's habitual home, capped at 122,606.47 euros per heir, and the home must be kept for 10 years.

The short version

Inheritance and gift tax (impuesto sobre sucesiones y donaciones) is charged on each person separately, on what that person receives. It is not charged on the whole estate. The calculation runs in four steps: work out the taxable base, subtract reductions, apply the tariff for your family group, then apply a multiplier for your existing wealth. Regions change many of these steps, so the final bill depends heavily on where the deceased lived.

Who pays

Each heir, legatee or beneficiary pays on their own share. This applies to residents and non-residents alike. The tax falls due on the date of death for an inheritance, and on the date of the gift for a gift. For life insurance, it falls due on the date the insured person dies. The timeline below shows the filing deadline and the extension.

Step 1: the taxable base

The base is the net value of what you receive. That means property, bank accounts, shares and vehicles, plus a presumed 3% allowance for household goods. From this you subtract proven debts, taxes the deceased owed and, within limits, funeral costs.

Real estate is valued at the regional tax office's checked value. If the cadastral value or the declared price is higher, that higher figure is used. Valuation methods vary by region.

Step 2: your family group

Your relationship to the deceased puts you in one of four groups:

• Group I: descendants and adopted children under 21.
• Group II: descendants and adopted children aged 21 or over, spouse, parents and other ascendants, and adopters.
• Group III: siblings, nephews and nieces, uncles and aunts, cousins (second to fourth degree), and in-laws.
• Group IV: more distant relatives and unrelated people.

Regions can change reductions but not these group definitions.

Step 3: reductions

Reductions come off the base before the tariff applies. The state amounts are:

• Group I: 15,956.87 euros, plus 3,990.72 euros for each year under 21, capped at 47,858.59 euros.
• Group II: 15,956.87 euros.
• Group III: 7,993.46 euros.
• Group IV: none.

A disabled heir gets an extra 47,858.59 euros (disability of 33% to 65%) or 150,253.03 euros (65% or more). The larger extra applies in every group.

Most regions replace these amounts with their own, often much higher.

The family home. The state reduction is 95% of the value of the deceased's habitual home, capped at 122,606.47 euros per heir, and the home must be kept for 10 years. It applies to a spouse, ascendants and descendants. It also applies to relatives aged 65 or over who lived with the deceased for the two years before death. If the heir dies within the 10 years, the condition no longer applies. Many regions raise or remove the cap. Madrid and Andalucía effectively remove the tax for close relatives.

Step 4: tariff and multiplier

The state tariff is progressive, from 7.65% on a base up to 7,993.46 euros to 34% on bases above 797,555.08 euros, in 16 brackets. Regions with their own tariff use theirs instead.

The tax from the tariff is then multiplied by a coefficient based on your existing wealth and your group:

Some regions set their own coefficients. Distant relatives and unrelated people pay at least double, so the group matters a great deal.

Check your region

Because regions change reductions, tariffs, coefficients and valuation, ask the regional tax office, or an adviser, for the rules where the deceased lived before you estimate a bill. For other quick questions, see the FAQ below.

Timeline and deadlines

• Tax becomes due for an inheritance: the date of death: On the date of death. Each heir or legatee is taxed on what they personally receive.

• Tax becomes due for a gift: the date of the gift: On the date of the gift. Life insurance is taxed from the date of the insured person's death.

• Ask for an extension if you need more time: In writing, within the first five months after death. It adds six more months.

• File and pay the inheritance tax: Within six months of the date of death.

Quick answers on inheritance and gift tax in Spain

Is there a tax-free allowance for a surviving spouse?

No, there is no universal tax-free allowance for a surviving spouse in Spain. A spouse is in group II and gets a state reduction of 15,956.87 euros, plus the habitual-home and life insurance reductions. Many regions, such as Madrid, Andalucía, Galicia and Valencia, add a bonus of 99% to 100% of the tax, while Catalonia, Asturias and Aragón have only partial reductions or limits.

Is a life insurance payout taxed as inheritance?

Yes, a life insurance payout is taxed as inheritance when the beneficiary is not the policyholder. A spouse, child or parent gets a reduction of 9,195.49 euros, up to 100% of the amount received. The payout is added to your other inherited assets, and some regions have their own reductions. If you are both policyholder and beneficiary, you pay income tax instead.

Who is liable if the inheritance tax is not paid?

All the heirs are jointly liable for the unpaid inheritance tax of the estate. The inherited assets are also directly liable for the tax. In practice, the land registry will not register the property in your name without proof of payment or exemption, and notaries report the deeds to the tax administration.