Inheritance tax on Spanish property on the Costa Blanca is usually small for children, spouses and parents, even if they live in the UK. Each of them deducts €100,000 from their share and gets 99 per cent off the tax on the rest. If the person who died was based in the UK, UK inheritance tax may apply too.
How much is inheritance tax in Spain on a Costa Blanca home?
Spanish inheritance tax (impuesto sobre sucesiones) is a national tax, but the regions set the allowances. The Costa Blanca is in the Valencian Community, so Valencian rules apply, in the version in force since 11 August 2026. Spain taxes each heir on their own share, and the bill depends on how you were related to the person who died:
| Group | Who | Allowance on your share | Discount on the tax |
|---|---|---|---|
| I | Children and grandchildren under 21 | €100,000 plus €8,000 for each year under 21, up to €156,000 | 99 per cent |
| II | Children and grandchildren aged 21 or over, spouse, parents, grandparents | €100,000 | 99 per cent |
| III | Brothers and sisters, nephews and nieces, uncles and aunts, in-laws and stepchildren | No Valencian €100,000 allowance | 25 per cent for blood relatives only, 50 per cent from 1 June 2027 |
| IV | Cousins, more distant relatives and non-family | None | None |
The 99 per cent comes off the tax left after the allowance. Heirs with a recognised disability of 33 per cent or more get an extra €120,000 allowance, or €240,000 from 65 per cent. Unmarried partners count as spouses if their partnership is registered in Valencia or in a comparable register, including one outside the EU.
What will you pay? Three worked examples
We ran the Valencian tax scale for a Group II heir whose own wealth is under €390,657.87. Above that, the tax before the discount rises by 5 to 20 per cent.
| Situation | One heir's share | Taxable after allowance | Tax before the 99 per cent discount | To pay |
|---|---|---|---|---|
| €300,000 flat, two adult children, half each | €150,000 | €50,000 | €4,975.75 | €49.76 each |
| €250,000 flat, one adult child | €250,000 | €150,000 | €21,393.65 | €213.94 |
| €500,000 villa, one adult child | €500,000 | €400,000 | €81,762.52 | €817.63 |
The value used is the Catastro's reference value (valor de referencia) on the date of death, not the cadastral value on the IBI bill. If your share is €100,000 or less, there is no tax, but you still file a return. If the deeds show a couple each owned half, only the half of the partner who died is inherited.
Brothers and sisters pay far more. They get no €100,000 allowance, at the same wealth level their tax is multiplied by 1.5882 before the discount, and the discount is only 25 per cent. Have a lawyer work out that bill.
Do UK residents get the same Spanish allowances?
Yes, and many British guides still get this wrong. If the person who died did not live in Spain, the heirs use the rules of the region where most of their Spanish assets are. Heirs abroad of someone who lived in Spain get the rules of the region where that person lived. For a Costa Blanca flat, that means the Valencian allowances above.
The rule once covered only EU and EEA residents. Ley 11/2021 extended it to all non-residents, including those in third countries such as the UK, following Spanish Supreme Court rulings, among them judgment 242/2018 of 19 February 2018. It has applied since 11 July 2021, so Brexit does not take these allowances away.
Living in the UK, you file Form 650 with the Spanish State Tax Agency (Agencia Tributaria), and Spain taxes you only on assets in Spain. One relief rarely helps: the 95 per cent reduction for the deceased's main home, up to €150,000 per heir. A holiday flat owned by someone who lived in the UK is not their main home.
What are the deadlines?
| What | Deadline |
|---|---|
| Spanish inheritance tax return | 6 months from the date of death |
| Spanish extension | Another 6 months if you apply within the first 5. Interest runs for the extra time |
| Plusvalía return to the town hall | 6 months, extendable to 1 year on request |
| UK inheritance tax payment | End of the sixth month after the death |
Miss the Spanish deadline and you risk more than interest. The 99 per cent discount only covers assets declared in a complete return, filed on time or late but before the tax office contacts you.
Do you also pay UK inheritance tax on Spanish property?
It depends on where the person who died was based. For deaths since 6 April 2025, HMRC treats someone as based abroad if they lived in the UK for less than 10 of the last 20 years, and then only UK assets are taxed. If they were based in the UK, the Spanish home is part of the UK estate.
The UK charges 40 per cent above the £325,000 threshold, and there is normally nothing to pay on what goes to a husband, wife or civil partner. Spain has no such exemption: a spouse is a Group II heir.
There is no UK and Spain inheritance tax treaty. HMRC lists ten countries with one: Ireland, the Netherlands, South Africa, Sweden, the USA, Switzerland, France, India, Italy and Pakistan. Instead, the UK gives a credit for Spanish tax, called unilateral relief:
- It is the sterling value of the Spanish tax, at the exchange rate on the day you paid it.
- It cannot exceed the UK tax on the Spanish property.
- Spanish interest and penalties do not count.
- You must show the Spanish assessment and proof of payment.
With Valencian tax for close family so low, the credit is usually small. In our second example the child pays €213.94 in Spain, and only the sterling value of that comes off the UK tax on the flat.
If the foreign assets are worth more than £100,000, GOV.UK says the executor must send HMRC full details of the estate even when no UK tax is due.
Which law decides who inherits?
Spain applies the EU Succession Regulation 650/2012. The UK and Ireland did not take part in it, but Spain applies it to everyone, even when it points to the law of a non-EU country.
- No choice in your will: the law of the country where you were habitually resident at death governs the whole estate, Spanish home included.
- A choice in your will: you can choose the law of your nationality, made in a will or clear from its terms.
- Name the system: the UK has several, so say England and Wales, Scotland or Northern Ireland. If UK rules do not settle it, the Regulation uses the one you were most closely connected with.
This matters because Spanish law reserves two thirds of a parent's estate for the children and gives a surviving spouse a life interest in part of it. Britons living in Spain who make no choice may find that applies. A chosen law also cannot be referred back to another country's law, while UK law that applies only because of where you lived can send the question back to Spanish law.
Do you need a Spanish will if you own property in Spain?
Not always. Spain and the UK are both parties to the 1961 Hague Convention on the form of wills. Under the Wills Act 1963, a will is formally valid if it follows the law of the place where it was signed, or of the testator's home, habitual residence or nationality. So an English will can be valid in Spain.
A Spanish will can still make things quicker. An open will (testamento abierto) is signed before a Spanish notary and recorded in Spain's register of last wills. After a death, the last wills certificate (Certificado de Actos de Última Voluntad) shows which notary holds the latest one, and it is needed for any inheritance.
Careful with two wills: under Spanish law a later will cancels an earlier one unless it says otherwise. Have them drafted to work together, with the Spanish one limited to Spanish assets.
Plusvalía: the town hall's tax
Heirs also pay the municipal tax on the rise in land value (plusvalía municipal). It is the cadastral land value times a coefficient for the years the deceased owned it, up to a legal maximum. You can show that the real gain was lower, and with no gain there is no tax.
New maximum coefficients apply from 1 December 2026 under Real Decreto-ley 29/2026, which the Diputación Permanente of Congress validated on 12 November 2026 by 35 votes to 34.
Town halls may give children, spouses and parents up to 95 per cent off. Check the bylaws of Calpe, Torrevieja or the town concerned.
Documents for the notary and the land registry
The heirs sign an acceptance and division of the estate before a Spanish notary, then register the new owners at the land registry. You will usually need:
- the death certificate (in Spain, ask for the multilingual certificado plurilingüe)
- the will or wills, and the Spanish last wills certificate
- a UK grant of probate or confirmation, where one is used
- the title deed, the latest IBI bill and a community fees certificate
- an NIE number for each heir
UK documents need an apostille from the FCDO Legalisation Office, because the Regulation's exemption only covers documents from EU member states. It costs £45 per paper document or £35 for an e-Apostille, and UK death certificates only get the paper version. Add translations, and the land registry may ask for evidence of UK law, such as a notary's or consul's report.
Then change the owner for IBI, the community and the utilities. Our guide to community fees in Spain explains which debts pass with a property.
Living in Spain and inheriting from the UK?
Then Spain taxes everything you inherit, wherever it is, including a parent's house in the UK. With no assets in Spain, you use the rules of the region where you spent most days in the last five years, and Spain deducts the foreign tax paid, up to the Spanish tax on those assets. See our guide to becoming a Spanish resident.
Buying with your family in mind
Many couples we speak to buy a winter home expecting their children to have it one day. If that is your plan, talk to a lawyer before the purchase deed about whose names go on it, your wills and which law should apply.
One example on our books is a four-bedroom apartment in Altea at €299,000: 116 m², two bathrooms, third floor of a 1975 building, about 500 m from the sea. See more property for sale in Altea; we confirm prices and availability before you fly. Budget for the costs of buying in Spain, up to 13 to 14 per cent on top of the listing price, and compare new build versus resale.
Frequently asked questions
How much is inheritance tax in Spain for children? In the Valencian Community, which includes the Costa Blanca, a child aged 21 or over deducts €100,000 from their share and gets a 99 per cent discount on the tax on the rest. On a €150,000 share that leaves about €50 of Spanish tax. Other Spanish regions have different rules.
Do UK residents pay Spanish inheritance tax? Yes, on assets in Spain, such as a flat on the Costa Blanca. Since Ley 11/2021, heirs living outside the EU, including in the UK, get the same regional allowances as Spanish residents, usually those of the region where the property is. They file Form 650 with the Spanish State Tax Agency within six months of the death.
Do you pay UK inheritance tax on Spanish property? For deaths since 6 April 2025: if the person who died lived in the UK for at least 10 of the last 20 years, the Spanish home counts towards the UK estate. There is no UK and Spain inheritance tax treaty, but HMRC gives a credit for the Spanish tax paid, capped at the UK tax on that property.
Is an English will valid in Spain? It can be. Spain and the UK are both parties to the 1961 Hague Convention on the form of wills, so a will made properly under English law is formally valid. A separate Spanish will for Spanish assets often makes the notary's work easier, but it must not cancel your UK will by accident.
Can a British person choose UK law for their Spanish property? Yes. Spain applies EU Regulation 650/2012 to everyone, and it lets you choose the law of your nationality in your will. Name the system, such as the law of England and Wales or of Scotland. Without a choice, the law of your habitual residence at death applies.
What value is Spanish inheritance tax based on? The Catastro's reference value (valor de referencia) on the date of death, not the cadastral value on the IBI bill. If you declare a higher value, the tax office uses yours. If there is no reference value, the base is the higher of the declared value and the market value.
This is general information based on the rules in force on 12 November 2026, not legal or tax advice. For a specific estate, speak to a lawyer or tax adviser in Spain and in the UK.
Buying in Spain with your family's future in mind?
Tell us what you are looking for, and we will help you find a home. We work with lawyers and can help you find one who handles wills and inheritance. Tripinvest ES is a licensed agency (RAICV 4221) with offices in Calpe and Torrevieja and a head office in London. Our agents have over 12 years' experience on the Spanish market, and service is in English from first call to the notary. Our clients don't pay us commission.
Or call us on +44 20 3888 0008.
Sources
Last checked: 12 November 2026
- Ley 13/1997 Generalitat Valenciana, consolidated text in force from 11 August 2026, articles 10, 11, 12, 12 bis, 12 ter and 12 quáter: boe.es (official)
- Ley 5/2026 Generalitat Valenciana, 31 July 2026: boe.es (official)
- Ley 29/1987, inheritance and gift tax, articles 6, 7, 9, 20, 23 and additional provision 2: boe.es (official)
- Ley 11/2021, 9 July, preamble and article 4: boe.es (official)
- Real Decreto 1629/1991, articles 67 and 68, deadlines and extensions: boe.es (official)
- Real Decreto Legislativo 2/2004, articles 104 to 110, plusvalía municipal: boe.es (official)
- Real Decreto-ley 29/2026, 6 October 2026, and its BOE analysis page: boe.es (official)
- Código Civil, articles 694, 739, 806 to 808 and 834: boe.es (official)
- Reglamento Hipotecario, articles 36 and 37: boe.es (official)
- Regulation (EU) No 650/2012, recital 82 and articles 20, 21, 22, 34, 36 and 74, Official Journal L 201 of 27 July 2012: boe.es (official)
- Agencia Tributaria, Form 650 for non-residents, who must file and deadlines: sede.agenciatributaria.gob.es (official)
- Ministerio de Justicia, Certificado de Actos de Última Voluntad: mjusticia.gob.es (official)
- GOV.UK, How Inheritance Tax works: gov.uk and if you die when you are based outside the UK (official)
- GOV.UK, Valuing the estate of someone who's died, check the type of estate: gov.uk (official)
- GOV.UK, Pay Inheritance Tax: gov.uk (official)
- HMRC Inheritance Tax Manual, IHTM27161, IHTM27185 and IHTM27187: gov.uk (official)
- GOV.UK, Get your document legalised: gov.uk (official)
- GOV.UK, What to do after a British person dies in Spain: gov.uk (official)
- Wills Act 1963, section 1: legislation.gov.uk (official)
- HCCH, status table of the Convention of 5 October 1961 on the form of testamentary dispositions: hcch.net (official)
- Tripinvest ES listing TP0303238, apartment in Altea, checked 12 November 2026: tripinvest-es.com
