Any citizen of any nation can purchase property in Spain. You can get any type of residential property, including villas, houses and apartments. But what rules apply when foreigners inherit properties in Spain? In this article, we explain who has the right to gain ownership of the property after the death of the previous owner, how the procedure is established and whether the heir is required to pay tax.
Content:
- Which country's laws are necessary for you to claim an inheritance?
- What documentation is required to claim the inheritance?
- Do I need to pay tax after entering into inheritance rights?
Which country's laws are necessary for you to claim an inheritance?
Various aspects depend on the laws of the state in which the process of acquiring inheritance rights will take place. There may be the following scenarios:
- The recently deceased owner was a permanent resident of Spain. In this situation, the inheritance is opened within the kingdom itself. If the person who passed away had close relatives (children, parents and a spouse), they might register their property rights with a Spanish notary. If there are no direct heirs or if they disagree, inheritance disputes are decided in a Spanish civil court. It should be noted that the regulations of local law addressing inheritance may differ in the Spanish autonomies (Catalonia, Castile, the Basque Country and so on).
- When dealing with the inheritance of someone who was a citizen of another country, it’s important to follow the specific laws of that However, for the Russian Federation, the Civil Code takes into account the norms of the country where the deceased had been residing before their passing. Nevertheless, a crucial detail should be considered, especially if the deceased owned property in both Russia and Spain. In such cases, it becomes necessary to start the inheritance process under Russian law.
If the deceased person left a will - in Spain or the country of their citizenship - the heirs' registration for property rights will be simplified.
What documentation is required to claim the inheritance?
To apply for an inheritance, you need the following:
- You should request a death certificate at the place of death of the Spanish property owner;
- You should get a certificate from the registry of wills (you can request a document 15 days after the owner's death. To do so, contact the Ministry of Justice's territorial office or the Madrid Central Registry of Wills. The service costs UAE 70);
- If the owner left a will, a copy can be obtained from the notary who certified it;
If the Registry of Wills does not contain any information regarding the deceased individual's final testament, the heirs are required to approach a Spanish notary to get a document known as a deed of the heirs. Along with the aforementioned documents, the heirs have to prove their relationship with the deceased, as well as present their identification cards needed for the paperwork. It’s worth noting that this entire process takes place in the presence of two witnesses, ensuring transparency and legitimacy.
If there are multiple heirs, as soon as their group is determined and an inventory of the deceased's property is completed, the notary will proceed to draft a document governing the division of property among the rightful heirs. This document serves as a crucial basis for successfully registering the real estate under their names. By following these legal procedures and guidelines, the heirs can navigate the intricate process of inheriting and managing the real estate with confidence and assurance.
In Spain, inheritance is a complicated bureaucratic process. It has an impact on various areas of law, including inheritance, family law, taxation and property laws. As a result, experts advise hiring a lawyer to assist in professionally guiding the procedure through all the stages.
It’s important to note that partial inheritance is not possible: for example, taking ownership of properties or apartments in Spain while refusing debts. If you choose to enter into inheritance rights, you’ll be responsible for the whole estate of the deceased. Furthermore, once you have obtained ownership of the real estate, you‘ll be required to comply with Spanish laws: pay the utility bills and taxes for non-residents with real estate:
- Income tax (should be paid even if you do not rent out your home or flat and receive a profit from it);
- Garbage removal and disposal tax;
- Real estate tax (IBI);
- Optional – luxury tax.
Nonpayment of taxes carries serious penalties, including confiscation of property. Keep in mind that if your debts pile up, you’ll lose the ability to conduct transactions with your real estate and may even be sued. In the most extreme circumstances, a malevolent debtor can be placed on Interpol's worldwide wanted list, but this usually requires serious grounds. For example, if you have a mortgage debt or owe money after your property has been taken.
Do I need to pay tax after entering into inheritance rights?
The entire value of all inherited property is reflected in the notarial deed, based on it being possible to record the deceased's property oneself. This sum is used to calculate the tax that the heirs will have to pay.
This tax is set on a progressive basis in Spain. This indicates that the heir will have to pay more if the sum specified in the notarial deed is higher. There are several exceptions: the tax amount is also determined by the autonomous territory (for Spanish residents) in which the deceased's property is located, as well as the level of relationship with the heirs. Direct heirs will pay less.