Inheritance Tax in Andalusia for Foreign Owners 2026: The 99% Rebate
It’s the question every foreign property owner on the Costa del Sol asks themselves sooner or later: what happens to my home when I’m gone? How much will my children pay to inherit it? The answer, under Andalusia’s current 2026 rules, surprises most people: in practice, almost nothing.
Andalusia combines a reduction of up to €1,000,000 per heir with a 99% rebate on the tax bill for spouses, children and parents, applicable to both inheritances and lifetime gifts. And since the 2021 reform, non-residents — whether from the EU or further afield — have the right to apply exactly the same benefits as a resident of Andalusia. This guide explains how the tax works, with real examples in euros, which deadlines and forms apply to each situation, and what makes more sense for your profile: leaving the property as inheritance or gifting it during your lifetime.
Quick summary: inheritance and gift tax in Andalusia 2026
- Spouses, children and parents pay next to nothing: a reduction of up to €1,000,000 per heir on inheritances plus a 99% rebate on the tax due, which also applies to lifetime gifts (Andalusia’s Law 5/2021).
- Non-residents apply Andalusian rules: since Law 11/2021, it makes no difference whether you live in the UK, Germany, Sweden or any non-EU country.
- Real example: a child who inherits a property worth €400,000 pays €0. If they receive it as a gift instead, the gift tax comes to around €756.
- The taxable value of the property is, at minimum, its official cadastral reference value, the same rule that applies to transfer tax (ITP) when buying.
- Deadlines: 6 months for inheritances (extendable by another 6). Gifts: 2 months if filed with the Junta de Andalucía, or 30 working days with the AEAT if the recipient doesn’t live in Spain.
- Siblings, nieces, nephews and uncles/aunts (Group III) get no rebate: the bill can exceed €100,000 on a mid-to-high value property.
- Gifting during your lifetime can trigger significant income tax for the donor: before deciding, always work out the combined cost of all the taxes involved, not just the gift tax itself.
How much do you pay to inherit or receive a property in Andalusia in 2026?
For the vast majority of families, the answer is zero or close to it. Andalusia effectively neutralises Inheritance and Gift Tax (ISD) for immediate family members through two mechanisms set out in Law 5/2021 on Transferred Taxes: a family relationship reduction of up to €1,000,000 per heir on the taxable base for inheritances (Article 28), plus a 99% rebate on the resulting tax bill (Article 39) that covers both inheritances and gifts. On top of this sits a regional tax scale ranging from 7% to 26% (Article 37), well below the standard national scale, and fixed multiplier coefficients: 1.0 for Groups I and II, 1.5 for Group III and 1.9 for Group IV, with no surcharge based on the heir’s pre-existing wealth.
The tax is always paid by the recipient: each heir or beneficiary files their own self-assessment, even when the result is €0. One key detail for property owners: the home is valued at, as a minimum, its official cadastral reference value — the same standard applied to transfer tax (ITP) when buying a property in Andalusia.
How the tax is calculated, step by step
- Taxable base: the value of the assets received. For property, at minimum the cadastral reference value. Inheritances also add household goods («ajuar»), generally 3% of the estate, subject to case law nuances.
- Reductions: up to €1,000,000 per family relationship on inheritances for Groups I and II; €10,000 for Group III; additional reductions for disability (€250,000 or €500,000 depending on degree) or for the deceased’s main home (99%, subject to a 3-year holding period).
- Net taxable base: taxable base minus reductions.
- Gross tax due: apply the Andalusian scale of 7%–26% and the multiplier coefficient based on family relationship.
- 99% rebate on the resulting tax, if the recipient belongs to Group I or II.
What if I don’t live in Spain? The key point for foreign owners
Here’s the good news that many international owners still don’t know. What determines how you’re taxed isn’t your nationality — it’s your tax residency. A non-resident is taxed in Spain only on assets located within Spanish territory, such as your Costa del Sol property. And since the amendment to the Second Additional Provision of Law 29/1987 by Law 11/2021 — which consolidated the Spanish Supreme Court’s 2018 ruling — all non-residents, whether from the EU or from outside it, have the right to apply the relevant regional rules. An heir living in London, Berlin, Stockholm or Dubai applies exactly the same reductions and the same 99% rebate as a resident of Málaga.
So which regional rules apply? These are the standard connecting factors when an Andalusian property is involved:
| Situation | Applicable rules |
|---|---|
| The deceased lived in Andalusia and the heirs live abroad | Andalusian rules (region where the deceased was resident) |
| The deceased lived abroad and leaves assets in Spain | Rules of the region where the assets of greatest value are located; if the Costa del Sol property is the main asset, Andalusian rules apply |
| Gift of a property located in Andalusia | Andalusian rules (location of the property), regardless of where the recipient lives |
In practice, for the typical case among our clients — a foreign owner with a property in Fuengirola, Mijas, Marbella or Estepona whose heirs also live abroad — the conclusion is straightforward: the Andalusian tax benefits described in this guide apply.
The 99% rebate and the €1,000,000 reduction: who can apply them
Andalusia’s tax benefits depend on the family relationship between the person transferring the assets and the person receiving them. This table summarises how it works in 2026:
| Group | Who is included | Family relationship reduction (inheritances) | Tax rebate |
|---|---|---|---|
| I | Children and descendants under 21 | Up to €1,000,000 | 99% (inheritances and gifts) |
| II | Children and descendants aged 21 or over, spouse, parents and ascendants | Up to €1,000,000 | 99% (inheritances and gifts) |
| III | Siblings, nieces/nephews, uncles/aunts and relatives by marriage | €10,000 | No rebate |
| IV | Cousins, distant relatives and unrelated individuals | No reduction | No rebate |
Two important nuances for international owners. First: registered civil partnerships are treated the same as married spouses, provided they are registered with Andalusia’s Registry of Civil Partnerships or an equivalent registry of another public administration; a stable partner without that registration falls into Group IV — the worst possible tax scenario. Second: the €1,000,000 reduction applies only to inheritances; for lifetime gifts, the shield is the 99% rebate, which requires the gift to be formalised in a public deed before a notary.
In addition, Andalusia’s 2026 Budget Law (Law 8/2025) introduced two practical improvements from 2026 onwards: the 99% rebate is preserved even if the self-assessment is filed late, as long as it is filed voluntarily and before receiving a request from the tax authorities; and cash gifts under €5,000 are exempt from the public deed requirement. Even so, filing on time remains the safest route to avoid surcharges and interest.
Real examples with numbers: what you pay in each scenario
Nothing clarifies things like real euros. These four scenarios are calculated applying the Andalusian scale under Article 37 of Law 5/2021, the corresponding multiplier coefficient (1.0 for Groups I and II; 1.5 for Group III) and, where applicable, the family relationship reduction and the 99% rebate. We take the property’s cadastral reference value as its value:
| Scenario | Who receives | Net taxable base | Approximate final tax |
|---|---|---|---|
| Inheritance of a €400,000 property | Child (Group II) | €0 (absorbed by the €1,000,000 reduction) | €0 |
| Inheritance of a €1,500,000 estate | Sole child (Group II) | €500,000 | ≈ €996 (after 99% rebate) |
| Gift of a €400,000 property | Daughter (Group II) | €400,000 | ≈ €756 (after 99% rebate) |
| Inheritance of a €400,000 property | Sibling (Group III) | €390,000 | ≈ €110,130 (no rebate) |
The takeaway is clear. Between parents, children and spouses, Andalusia’s inheritance tax is today almost symbolic even for substantial estates: an inheritance of one and a half million euros generates a tax bill under €1,000. By contrast, when siblings or nieces and nephews inherit, the tax remains very real: in the example above, over €110,000 on a €400,000 property. If your intended heirs fall into Group III or IV, forward planning isn’t optional — it’s essential. These figures are indicative only: every case may involve additional reductions, encumbrances or particularities, so always verify your specific situation with a tax adviser and against the official sources published by the Andalusian Tax Agency and the AEAT.
Inherit or gift during your lifetime? The comparison you should run before deciding
With a 99% rebate on both routes, many owners assume it makes no difference whether they gift now or leave the property as inheritance. That’s not the case: inheritance and gift tax is only one piece of the puzzle. The decisive difference usually lies in the other taxes each option triggers.
| Aspect | Inheritance | Lifetime gift |
|---|---|---|
| Reduction of up to €1,000,000 (Groups I and II) | Yes | No |
| 99% rebate on the tax due | Yes | Yes, with a public deed |
| Donor’s income tax on accumulated capital gain | Not taxed on the deceased (the so-called «step-up» on death doesn’t trigger a gain for the deceased) | Yes: the donor is taxed on the gain as if selling; non-resident donors pay at 19% under non-resident income tax (IRNR) |
| Municipal capital gains tax (plusvalía) | Paid by the heir | Paid by the recipient of the gift |
| Filing deadline | 6 months, extendable | 2 months (regional authority) or 30 working days (AEAT, non-residents) |
| Control of the asset | The owner keeps it for life | Lost upon gifting (unless a usufruct or similar right is reserved) |
For this reason, in most cases involving immediate family, inheriting tends to be more tax-efficient than gifting: an inheritance doesn’t trigger the accumulated capital gain on the person transferring the asset, whereas a gift can generate an income tax bill far higher than the gift tax itself, particularly for properties bought years ago that have appreciated substantially. Gifting, in return, offers certainty and allows you to plan the handover of assets in advance. The right decision requires calculating the combined cost of both routes using real figures.
What tends to make sense depending on your profile
| Owner profile | Route usually analysed first | Why |
|---|---|---|
| Non-resident with children or a spouse as heirs | Inheritance + Spanish will | €1,000,000 reduction and 99% rebate; typical tax bill of €0; no income tax for the person transferring the asset |
| Owner wanting to bring forward the handover to a child | Gift by public deed | Inheritance/gift tax is almost symbolic thanks to the rebate; but budget for the donor’s income tax and municipal capital gains tax |
| Family estate exceeding €1,000,000 per heir | Inheritance with planning | The 99% rebate covers what the reduction doesn’t absorb; the tax bill stays minimal |
| Intended heirs in Group III or IV (siblings, nieces/nephews, unregistered partner) | Early professional planning | Without the rebate, the bill is substantial; consider a will, ownership structuring or registering a civil partnership |
Where and when to file: residents versus non-residents
The authority you file with changes depending on the residency of those involved, even though the Andalusian tax benefits apply in both cases. This is the operational detail that causes the most confusion:
| Case | Form | Authority | Deadline |
|---|---|---|---|
| Inheritance with a non-resident heir or deceased | Modelo 650 | AEAT – National Tax Management Office (Madrid), specifying that Andalusian rules apply | 6 months from the date of death; a further 6-month extension available if requested within the first 5 months |
| Inheritance between residents (deceased resident in Andalusia) | Modelo 650 | Andalusian Tax Agency | 6 months, with the same extension available |
| Gift of an Andalusian property to a Spanish resident | Modelo 651 | Andalusian Tax Agency | 2 months from the day after the gift |
| Gift of an Andalusian property to a non-resident | Modelo 651 | AEAT – National Tax Management Office | 30 working days |
On top of the ISD self-assessment comes the municipal capital gains tax (plusvalía) filed with the town hall where the property is located (6 months for inheritances, extendable up to a year; 30 working days for gifts), and finally registration at the Land Registry, essential to be able to sell or mortgage the property in future.
Risks and common mistakes we see on the Costa del Sol
- Not filing «because it comes to zero». The self-assessment is mandatory even when the tax due is €0: without proof of having filed, you won’t be able to register the property or sell it later.
- Letting the 6-month deadline pass without requesting an extension. This generates surcharges and interest. Since 2026, filing voluntarily after the deadline still preserves the 99% rebate, but it remains avoidable money lost.
- Declaring below the reference value. This triggers checks by the tax authorities and also harms you later: when you sell, your acquisition value for capital gains purposes will be the value declared for inheritance tax.
- Gifting without calculating the donor’s capital gain. The gift tax itself may come to a few hundred euros, but the donor’s income tax on the accumulated appreciation can run into tens of thousands.
- Losing the rebate by not using a public deed for the gift, or by having an unregistered civil partnership, which drops the partner into Group IV.
- Ignoring the tax position in your home country. Spain taxes the Andalusian property, but your country of residence may tax your worldwide estate. Without cross-border planning, the total bill can escalate sharply.
International planning: a Spanish will and double taxation
If you’re a foreign owner with a property in Spain, there’s one document that dramatically simplifies things for your heirs: a Spanish will limited to your assets in Spain. EU Regulation 650/2012 also lets you expressly choose in the will for your succession to be governed by the law of your own nationality (known as «professio iuris»); if you don’t choose, the law of your country of habitual residence applies by default. For a British, German or Swedish owner with a home on the Costa del Sol, signing a Spanish will before a notary with an express choice of law avoids months of translations, apostilles and cross-border paperwork. If you’re considering relocating to Spain, our guide on moving to the Costa del Sol from the UK covers the rest of what a change of residence involves.
On double taxation: Spain only has specific inheritance tax treaties with France, Greece and Sweden, so in most cases each country’s own domestic rules apply. The UK and Germany, for instance, tax the worldwide inheritance or acquisition of their residents, although they generally allow a credit for tax already paid in Spain on the same asset. At the other end of the spectrum, countries such as Sweden or Norway have abolished their inheritance tax altogether, meaning their residents only face the Spanish ISD — effectively neutralised in Andalusia for immediate family. Each country combination has its own rules: verify your case with a tax adviser familiar with both jurisdictions.
How to handle an inheritance with property in Andalusia as a non-resident, step by step
Step 1: gather the basic certificates
Death certificate, certificate of last wills (which shows whether a Spanish will exists and which notary holds it) and, where relevant, a life insurance certificate. Foreign documents need an apostille and a sworn translation.
Step 2: obtain the NIE for each heir
The Foreigner Identity Number is essential for filing taxes and registering the property. It can be requested in Spain or at the Spanish consulate in your country of residence.
Step 3: draw up an inventory and value the assets
Value the property at, as a minimum, its cadastral reference value, along with bank balances as of the date of death and household goods. Getting the valuation right now saves tax later if the property is sold.
Step 4: sign the deed of acceptance of inheritance
This is signed before a Spanish notary. If heirs can’t travel, they can act through a power of attorney granted in their own country, with an apostille and translation.
Step 5: file Modelo 650 and the municipal capital gains tax
With non-resident heirs, Modelo 650 is filed with the AEAT’s National Tax Management Office, specifying that Andalusian rules apply, within 6 months of the date of death (extension possible if requested before the fifth month). The municipal capital gains tax is filed at the relevant town hall.
Step 6: register at the Land Registry
Once taxes are settled, register the property in the heirs’ names and update the Cadastre, the community of owners and utility accounts. From that point on, the property can be sold, rented or kept with no restrictions.
Frequently asked questions about inheritance and gift tax in Andalusia for foreigners
Do foreigners pay more inheritance tax in Spain?
No. What determines your tax treatment is your tax residency, not your nationality, and since Law 11/2021 all non-residents — whether from the EU or from outside it — apply the same regional benefits as residents. A foreign heir of an Andalusian property enjoys the same reduction and rebate as anyone else.
Can a non-resident apply Andalusia’s 99% rebate?
Yes. The Second Additional Provision of Law 29/1987, following the Spanish Supreme Court’s 2018 ruling and its consolidation by Law 11/2021, recognises the right of any non-resident to apply the regional rules that correspond under the relevant connecting factors. If the main asset is a Costa del Sol property, those rules are Andalusia’s, including the 99% rebate for Groups I and II.
How much will my child pay to inherit my Costa del Sol home?
In the typical case, nothing. Andalusia’s reduction of up to €1,000,000 per heir fully absorbs the value of an average or high-value property, leaving the tax bill at €0. Only inheritances exceeding one million euros per heir generate any tax at all, and the 99% rebate reduces it to a near-symbolic figure — around €996 on a €1,500,000 inheritance.
Which is better: gifting my property during my lifetime or leaving it as inheritance?
From a tax perspective, inheritance usually wins: it doesn’t trigger income tax for the person transferring the asset and benefits from the €1,000,000 reduction. A lifetime gift has an almost symbolic gift tax thanks to the 99% rebate, but requires the donor to pay income tax on the property’s accumulated gain as if selling it. The right answer depends on the numbers in each case: always calculate the combined cost of both routes before deciding.
What’s the deadline for paying inheritance tax?
Six months from the date of death, extendable by a further six months if the extension is requested within the first five months. For gifts, the deadline is two months when filed with the Junta de Andalucía, and 30 working days when the recipient doesn’t live in Spain and files with the AEAT.
Will I also have to pay tax in my home country?
It depends on your country. Spain only has inheritance tax treaties with France, Greece and Sweden. Countries such as the UK or Germany tax the worldwide inheritance of their residents, although they generally allow a credit for tax already paid in Spain on the same asset; others, such as Sweden or Norway, have no inheritance tax at all. Always consult an adviser familiar with both jurisdictions.
Do I need a Spanish will if I own a property in Spain?
It isn’t mandatory, but it’s highly recommended. A Spanish will limited to your assets in Spain, with an express choice of your national law under EU Regulation 650/2012, saves your heirs months of paperwork, sworn translations and added costs.
How is the property valued for tax purposes?
At its market value and, as a minimum, at the official cadastral reference value published by the Cadastre — the same rule that applies to transfer tax on purchases. Declaring a lower value exposes you to checks and additional tax assessments.
Can I sell an inherited property immediately?
Yes, once the deed of acceptance of inheritance has been signed, inheritance tax and the municipal capital gains tax have been settled, and the property has been registered at the Land Registry. When you later sell, you’ll be taxed on the gain using the value declared for inheritance tax as your acquisition value; if you sell as a non-resident, the buyer will also withhold 3% of the price on account of your non-resident income tax.
What happens if my heirs are siblings or nieces/nephews?
They fall into Group III, with no 99% rebate and only a €10,000 reduction: a €400,000 property can generate a tax bill exceeding €110,000. In these cases, early planning with a specialist adviser — a will, an ownership structure, or registering a civil partnership — makes a substantial difference.
About this article. Prepared by the SolProp team, a real estate agency on the Costa del Sol specialising in national and international buyers, headquartered in Fuengirola (Málaga). Content reviewed in July 2026 in line with Andalusia’s Law 5/2021 on Transferred Taxes, national Law 29/1987 on Inheritance and Gift Tax, Andalusia’s 2026 Budget Law 8/2025, and the criteria published by the Andalusian Tax Agency and the AEAT. This article is for informational purposes only and does not constitute tax or legal advice: verify your specific case against official sources and with a qualified adviser before making any decisions.
Do you own a property on the Costa del Sol and want to plan ahead?
At SolProp, we work every day with international owners and buyers across Fuengirola, Mijas, Marbella, Benalmádena and Estepona. We can advise on your property’s real value and connect you with trusted tax advisers for your estate planning.
