What taxes need to be paid when properties are inherited and how can conflicts be avoided?

Impuestos a pagar en una herencia

Housing inheritances and donations broke all records in 2021. According to the INE’s updated data for the month of December, which was released on Tuesday 15 February 2022, a total number of 198,939 properties were inherited in the last financial year.

According to the INE (Spanish National Statistics Institute), more than 25,000 properties were transferred, with this being the highest figure since 2007. Inheritances soared to almost 199,000, with an average of 545 residential properties being inherited each day. Of the almost 200,000 properties that were inherited, the majority took place in Andalusia, Catalonia, the Valencian Community and Madrid.

According to experts from the General Council of Notaries, the rise in inheritances was due to the excess mortality rate brought about by the Coronavirus pandemic in addition to Spain’s ageing demographic. In today’s article, we will tell you all about inheritance taxes and expenses and explain what will happen if one of the heirs does not want to pay.

Inheritance taxes and expenses

Inheritance tax

The amount of tax to pay varies depending on the asset being inherited, and is applicable to the inheritance of assets and rights in natural persons. It all depends on the value of the asset being inherited, with tax rates ranging from 7.6% to 34%, and on the allowances applied by each autonomous community.

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As of 1 January 2022, the purchaser or beneficiary who acquires a property via inheritance will no longer be taxed on the basis of the actual value of the property when it was acquired, but on the basis of the so-called Market Reference Value (MRV). To ascertain this value, you need to check the value approved by the Cadastre. However, if the deed value is higher than the reference value, it is the deed value that will act as the tax base.

You have six months to pay the corresponding inheritance tax. Alternatively, you could extend this period and pay the corresponding interest. This tax is paid before the assets can be transferred, which means you’ll need to have enough savings in your account before that beautiful beach apartment can be considered yours.

Municipal capital gains tax

Another tax to be paid is the Municipal capital gains tax, which is paid whenever there is a change of ownership. This tax is payable at the town hall where the property is located, and must be paid within a period of six months.

Additional fees and expenses

These may include notary fees, taxes or land registry fees.

How much does it cost to process an inheritance?

The price varies depending on the circumstances e.g. the amount of the inheritance, whether or not there is a will, etc. The most common price is between €7,000 and €8,000. However, these are only rough figures. Your best bet is to consult a lawyer, as he/she will be able to give you a better idea of the amount payable in your case. You should also consider that, in order to process an inheritance, it may be necessary to pay other expenses such as administrative fees, property registry fees, etc.

We recommend: Cadastral value. What is it and how can I ascertain the value of my house?

What happens if an heir does not pay Inheritance Tax?

In Spain, this tax must be settled by all named heirs. It is considered to be a personal tax. Therefore, if one of the heirs does not pay the corresponding tax, he/she will be solely liable, as each heir must file his or her tax return individually.

What happens if a house is left ownerless?

If nothing is specified in this regard in the will, everyone rejects the opportunity to inherit the property or there are no direct relatives up to four degrees of consanguinity, the Public Administration will become the legitimate heir of these assets. There are sometimes legitimate heirs who the public administration fails to identify or locate. The Directorate General of Assets has a mechanism for dealing with these issues:. Namely, compensating heirs with 10% of the value of the assets. In light of this, some companies are dedicated to searching for heirs of estates without wills. The notification of properties without a will is published in the Official State Gazette (BOE), and heirs are found in approximately 95% of the cases.

We at Mediterráneo Homes advise our clients on real estate matters and help you with the purchase and sale of your home. If you have any questions in this regard, feel free to contact us!






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