When an inheritance involves an heir living abroad, or assets located in the Valencian Community inherited by someone from outside Spain, Inheritance Tax does not disappear: its rules change. Knowing which authority is responsible, which form to file and by when is what saves you a penalty that could have been avoided.
In this article
The short answer
If you inherit a home in Valencia, Alicante or any town in the Valencia region and you live outside Spain, Inheritance Tax is filed with the national Tax Agency, not the Valencian one, but with the Valencian region's allowances and relief. For children, spouses and parents that means a 99% relief on the tax. It can all be done without travelling to Spain, with a power of attorney.
Which rules apply
- If the deceased lived outside Spain (the typical case of a foreign couple with a house on the Costa Blanca), the rules of the region where most of their Spanish assets by value are located apply. If the house is in Alicante, the Valencian rules.
- If the deceased lived in the Valencia region, the Valencian rules apply wherever the heirs live, including outside the European Union.
It is a right you exercise when filing. And filing always goes to the national Tax Agency (Oficina Nacional de Gestión Tributaria) when the heir or the deceased is not resident in Spain. It can be done online.
How much is paid
| Who inherits | What applies in the Valencia region |
|---|---|
| Children aged 21 or over, spouse, parents | €100,000 allowance and 99% relief |
| Children under 21 | €100,000 allowance plus €8,000 per year short of 21 (up to €156,000) and 99% relief |
| Siblings, nephews, nieces, uncles and aunts by blood | 25% relief, rising to 50% from 1 June 2027 |
Two details to watch. The 99% relief only applies to assets fully declared, on time or at least before the tax office asks. And the allowance for the deceased's main home rarely helps with a second home on the coast, because it must have been their main residence.
Which law decides who inherits
Tax is one thing and who inherits is another. Since 17 August 2015, the EU Succession Regulation says the law of the country of the deceased's habitual residence applies, unless their will chose the law of their nationality. In Spain it applies even if that law is of a non-EU country, such as the UK. So an English or Dutch will can work, but it is worth checking which law it chooses and how it is proved here.
Step by step from abroad
- Death certificate, apostilled and translated if foreign.
- Spanish certificate of last wills, to find out whether there is a will in Spain.
- Will (Spanish or foreign) or declaration of heirs.
- NIE for each heir.
- Power of attorney signed before a notary in your country and apostilled, so we can sign for you in Valencia.
- Deed of acceptance of the inheritance before a notary.
- Inheritance Tax (form 650) within six months of the death. If you live outside the European Union, with a tax representative in Spain, unless you live in a European Economic Area country with a mutual tax assistance agreement with Spain.
- Local capital gains tax (plusvalía) at the town hall where the property is.
- Land Registry entry and transfer of IBI, utilities and bank accounts.
The six-month deadline can be extended by six more if requested within the first five, with interest. If it is missed, surcharges apply: see I have missed the Inheritance Tax deadline.
Alicante and the Costa Blanca
A large share of non-resident inheritances in the Valencia region are homes in Alicante province belonging to British, Dutch, Belgian, German or Scandinavian families. The rules are the same as in Valencia: national tax office, Valencian rules. What changes is the local capital gains tax, because each town hall has its own bylaw and relief (it can reach 95% for children and spouses, but only if the bylaw provides for it). We handle these inheritances remotely from our office in Valencia.
Will I also pay in my country?
It can happen. Spain only has inheritance tax treaties to avoid double taxation with France, Greece and Sweden. With the UK, the Netherlands, Belgium, Germany or the Nordic countries there is no treaty, so it depends on your country's law: many let you deduct what was paid in Spain, others do not. It should be checked with an adviser there before filing.
If you keep the house or sell it
- If you keep it and do not rent it out, every year you must declare under Non-Resident Income Tax (form 210) an imputed income: 1.1% or 2% of the cadastral value, at 19% if you live in the EU or EEA and 24% if not (including the UK). Plus IBI.
- If you sell it, the buyer withholds 3% of the price and pays it on account of your tax. The gain is worked out from the value declared in the inheritance, so declaring it properly matters later too.
If the estate includes a property to be sold and we handle the sale, we advance the costs and everything is paid from the proceeds. More at non-resident inheritances in Valencia.
Frequently asked questions
Where is Inheritance Tax paid if I inherit a house in Alicante and live in the UK or the Netherlands?
With the national Tax Agency, which can be done online, applying the Valencian region's rules if that is where most of the Spanish assets by value are.
Does the 99% relief apply if the deceased did not live in Spain?
Yes, for children, spouses and parents, because the Valencian rules apply. Provided the assets are fully declared on time, or before the tax office asks.
Do I need an NIE and a tax representative?
An NIE, yes, for each heir. A tax representative if you live outside the European Union, except in European Economic Area countries with a mutual tax assistance agreement, for example in the UK, the US or Switzerland.
Can I accept the inheritance without travelling to Spain?
Yes. With an apostilled power of attorney signed in your country, we sign the deed and handle the procedures in Valencia.
Is a foreign will valid?
It can be. The law deciding who inherits is that of the deceased's habitual residence, unless their will chose the law of their nationality. It is worth reviewing before starting.
Will I also pay inheritance tax in my country?
It can happen. Spain only has inheritance treaties with France, Greece and Sweden; elsewhere it depends on your country's law.
What taxes do I pay if I keep the house?
Every year, Non-Resident Income Tax on the home's imputed income (form 210) and IBI.
What happens if I sell it?
The buyer withholds 3% of the price on account of your tax, and the gain is worked out from the value declared in the inheritance.