How does inheritance tax work in Andalusia?
Spanish inheritance and gift tax is called the Impuesto sobre Sucesiones y Donaciones (ISD). It is paid by the recipient: each heir or donee files a separate return, even when the result is zero.
The calculation proceeds in steps. The taxable base is the value of what you receive; for a property this is at least the cadastral reference value (valor de referencia). For an inheritance, a flat 3 per cent for household contents is generally added. Then come the reductions, the Andalusian rates of 7 to 26 per cent with a multiplier per kinship group and, finally, the 99 per cent relief for close family. See also valuation and values.
Even if you do not live in Spain
What counts is your tax residence, not your nationality. A non-resident is liable in Spain only for assets located in Spain, such as your home on the Costa del Sol. Since a change in the law in 2021, all non-residents, whether inside or outside the EU, may apply the regional rules. An heir in London, Amsterdam or Hamburg therefore receives the same benefits as someone in Málaga.
Which region applies? If the deceased lived in Andalusia, Andalusian rules apply. If he or she lived abroad, the region where most of the Spanish assets are located applies; if that is the Costa del Sol property, it is Andalusia. For a gift of a property, the location of the property is what counts.
Who benefits?
| Group | Who | Reduction of taxable base (inheritance) | Relief on the tax |
|---|---|---|---|
| I | Children and descendants under 21 | Up to 1,000,000 euros | 99% (inheritance and gift) |
| II | Children aged 21 or over, spouse, parents and ascendants | Up to 1,000,000 euros | 99% (inheritance and gift) |
| III | Siblings, nephews and nieces, uncles and aunts, in-laws | 10,000 euros | None |
| IV | More distant relatives and unrelated persons | None | None |
Two points to note. A cohabiting partner is treated as a spouse only if the partnership is entered in the Andalusian register or a comparable public register; without registration the partner falls into Group IV. And the 1,000,000-euro reduction applies only to inheritances. For a gift, the 99 per cent relief is the main benefit, and it requires a notarial deed.
Worked examples
Calculated with the Andalusian rates, reductions and relief, the following examples give an indication (as of 2026, based on the reference value):
- A child inherits a 400,000-euro home: no tax.
- An only child inherits an estate of 1,500,000 euros: around 996 euros.
- A daughter receives a 400,000-euro home as a gift: around 756 euros.
- A brother inherits a 400,000-euro home: around 110,130 euros.
Between parents, children and spouses the tax is therefore close to symbolic. If your intended heirs are siblings or nephews and nieces, early planning is essential.
Inherit or give during your lifetime?
With 99 per cent relief in both cases, it may seem not to matter. It does. On a gift, the donor pays income tax on the increase in value since purchase, as if selling the property; for a non-resident that is 19 per cent. On inheritance, that tax does not arise. In both cases the recipient also pays the municipal plusvalía, a tax on the increase in the value of the land. With close family, inheriting is therefore often more favourable. A gift does, however, offer certainty and an earlier transfer. Have the total tax cost of both routes calculated; see also capital gains tax for non-residents.
Returns and deadlines
- Inheritance (Modelo 650): within six months of death, with a six-month extension if requested within the first five months. If the heir or the deceased is non-resident, you file with the national tax agency (AEAT), stating that Andalusian rules apply.
- Gift (Modelo 651): within two months with the Andalusian tax agency, or within thirty working days with the AEAT if the recipient does not live in Spain.
- The plusvalía is then settled with the town hall and the property registered in the Land Registry, which is needed in order to sell or mortgage it later.
File a return even when the result is zero, and do not declare a value below the reference value: on a later sale, the declared value becomes your acquisition value.
International planning
A Spanish will limited to your Spanish assets makes the estate much simpler for your heirs. Under the EU Succession Regulation (650/2012) you can choose in it the law of your nationality; without a choice, the law of your habitual residence applies. Spain has inheritance tax treaties with only a few countries, so your country of residence may also tax the Spanish property. Seek advice from an independent tax adviser familiar with both systems.
How CostaVista can assist
CostaVista helps you consider, at the time of purchase, how the property will pass on later, and makes sure you sit down with an independent Spanish tax adviser or lawyer in good time. Please feel free to contact us.
General information, as of October 2026. This is not legal, tax or financial advice; for your own situation, consult an independent specialist.