Real Estate Investment in Spain – International Inheritance Implications

In previous articles, we presented how to structure the purchase of a real estate property and what steps you must undertake to ensure the purchase is efficient and safe (you can find it here), and the financial and tax information as well as practical tips related to the purchase process (here). To complete this overview of the process of purchasing real estate in Spain, let’s consider

one of the most important concerns when acquiring property abroad:  inheritance and succession laws, especially for non-resident or foreign owners. This applies both to sellers still settling an estate and buyers planning future succession of their foreign property.

Applicable Law

The EU Succession Regulation (No. 650/2012) generally stipulates that the law of the deceased’s last habitual residence governs succession. However, individuals may opt for the law of their nationality, a particularly helpful tool for foreign nationals residing in Spain who prefer the inheritance rules of their home country.

This choice must be made expressly in a notarized will. Failure to do so may result in unintended legal consequences. The regulation also permits the application of the spouse’s national law in the case of inheritance contracts.

Inheritance Tax

Spain does not have a unified national inheritance tax system. Instead, each autonomous region applies its own rates, exemptions, and allowances. Following a 2014 European Court of Justice ruling, non-residents are entitled to benefit from regional tax rules when inheriting Spanish assets.

Despite this progress, double taxation remains a possibility, as Spain has inheritance tax treaties only with France, Sweden, and Greece.

Sales of Inherited Property

In Spain, heirs acquire ownership of inherited property by law. However, for that ownership to be fully protected and enforceable, particularly in the case of real estate, it must be registered in the Land Registry (Registro de la Propiedad).

A situation in which a seller claims ownership through inheritance but has not yet registered the title is legally problematic. In practice, a serious and properly advised seller would not offer the property for sale until the inheritance registration process is complete or, at the very least, notarially formalised, with registration submitted and pending to be finally registered.

While a seller may possess valid succession documents, the absence of formal registration means that third parties, including potential buyer, cannot rely on the seller’s title with legal certainty. This poses several legal risks:

1. Competing heirs or challenges: If another heir later appears and successfully contests the will or inheritance arrangement, the sale could be challenged and annulled in court.
2. Legal uncertainty for buyers: Although a sale contract might technically be valid, the buyer assumes legal risk by proceeding before the inheritance is fully registered. Courts may later invalidate the transaction in light of new claims or evidence.

Previously, under the Spanish Mortgage Law, the sale of inherited property could be challenged by a forced heir for up to two years after the decedent’s death, even if the property was sold in good faith. However, this risk was eliminated by the reform of 2021 through Real Decreto-ley 8/2021, which abolished that provision.

In conclusion, while Spanish law technically allows heirs to sell inherited property before registering ownership, this is strongly discouraged and not considered standard practice. A properly advised seller will:

• Complete the inheritance process first,
• Pay applicable inheritance taxes, and
• Register ownership in the Land Registry before offering the property for sale.

Buyers should always request a recent Land Registry extract (nota simple) confirming that the seller is the legal, registered owner before signing any contract or making any payment. Failure to follow this guidance may result in legal uncertainty or annulment of the transaction.

Documentation and Procedure

To register property acquired through inheritance in Spain, proper documentation must be submitted within the legal timeframe to ensure legal certainty and avoid penalties. Generally, inheritance tax must be settled within six months from the date of death (an extension may be requested during the first months).

Property transfer as part of inheritance typically requires a notarial deed, especially when multiple heirs are involved. In certain cases, a European Certificate of Succession or private applications may suffice.

Typical required documents include:

• International death certificate or national certificate with Hague Apostille;
• European Certificate of Succession or national inheritance certificate with Hague Apostille;
• Certificate from the Spanish Register of Wills (Registro General de Actos de Última Voluntad);
• Property title and Land Registry data;
• Bank balance certificates (certificado de saldo);
• Last property tax (IBI) or a bank statement confirming the property’s cadastral data.