Inheritance tax on Spanish property in Valencia, 2026

Inheritance tax on Spanish property in the Comunitat Valenciana: the 99% relief for close family, the rules for non-residents, wills, and what heirs must do.

Last checked 17 October 2026

What you will learn

Which heirs pay almost no inheritance tax in Valencia, and who pays
How EU case law opened the Valencian rules to non-residents
The deadlines heirs must meet to keep the reliefs

In Spain, inheritance tax on Spanish property is paid by each heir on what they receive, not by the estate. In the Comunitat Valenciana it is now low for close family: since 28 May 2023, spouses, children, grandchildren and parents who inherit have had a 99% reduction on the tax due, and non-residents can use the same regional rules. The reliefs depend on filing on time. This guide explains how the tax works in 2026, how wills and the EU rules fit in, and what heirs must do, and by when.

Who pays, and which rules apply

The tax (Impuesto sobre Sucesiones y Donaciones) is charged on each heir. Non-residents pay it on what they receive that is in Spain, such as a villa in Moraira. Which region's rules apply depends on where the deceased lived and where the assets are. Under the national inheritance tax law, when the deceased lived outside Spain, the heirs can apply the rules of the region where most of the Spanish assets are located. When the deceased lived in a Spanish region, heirs who live abroad can apply that region's rules.

This follows a judgment of the EU Court of Justice of 3 September 2014, Commission v Spain, case C-127/12, which found that Spain's different treatment of non-residents breached the free movement of capital. Spain first changed the law for residents of the EU and the EEA and, since July 2021, the rule covers every non-resident. In principle, then, a British or Swiss heir of a house on the Costa Blanca North can use the Valencian reliefs.

Heirs who do not live in Spain file with the state Tax Agency (AEAT), which applies the regional rules. Heirs who live in the Comunitat Valenciana deal with the Valencian tax agency. Heirs abroad who keep the house then pay the yearly tax described in our guide to non-resident property tax in Spain.

Inheritance tax on Spanish property in Valencia in 2026

The Valencian tax law first gives each heir an allowance on the value they receive. Children aged 21 or over, spouses and parents (Group II) have €100,000. Children under 21 (Group I) have €100,000 plus €8,000 for each year under 21, up to €156,000. Heirs with a recognised disability of 33% or more have a further €120,000, or €240,000 from 65% (or from 33% for an intellectual or mental disability).

When the property was the deceased's main home, there is a further reduction of 95% of its value, up to €150,000 for each heir, for the spouse, children or parents, or a brother, sister or other collateral relative over 65 who lived with the deceased for the previous two years, if the heir keeps it for five years. It does not apply to a holiday home.

Then comes the main relief. Heirs in Groups I and II have a 99% reduction on the tax itself, on the assets they declare in time. Since 1 June 2026 there is also a 25% reduction for brothers and sisters, nephews and nieces, and uncles and aunts (blood relatives of the second and third degree, Group III). Under Ley 5/2026 it rises to 50% from 1 June 2027.

Stepchildren and in-laws are also in Group III, but they are not blood relatives, so the 25% does not cover them. Cousins and unrelated heirs are in Group IV. Without these reliefs, the tax follows a scale from 7.65% to 34%, multiplied by a coefficient that rises with the heir's own existing wealth: from 1 to 1.2 for Groups I and II, and from 2 to 2.4 for Group IV. Registered unmarried partners count as spouses if their union is entered in the Valencian register or an equivalent register in another country.

Gifts follow similar rules: a 99% reduction for gifts between spouses, between parents and children, and between grandparents and grandchildren, and the same 25% for gifts to brothers and sisters, nephews and nieces, uncles and aunts, rising to 50% from June 2027. The gift must be made in a public deed, and a gift of money must show where the money came from. A gift of a house can also mean capital gains tax for the giver and the plusvalía municipal, so it is not a simple way to pass on property.

Wills and the EU Succession Regulation

Tax is one question; who inherits is another. For deaths since 17 August 2015, the EU Succession Regulation applies the law of the country where the person habitually lived at death to the whole estate, unless they chose in a will the law of a country whose nationality they hold. The Regulation does not deal with tax.

A Spanish will covering the Spanish property is common among foreign owners and can make the process here simpler for the heirs. Whether it suits you, and how it fits with a will at home, is a question for a lawyer who knows both systems. After a death, the heirs need the certificate of last wills from the Spanish Ministry of Justice, which can be requested once 15 working days have passed since the death.

What heirs must do, and by when

Within six months of the death. The inheritance tax return must be filed and the tax paid. Heirs who file with the state Tax Agency use form 650 and can ask for one extension of another six months, as long as they ask within the first five months, according to the Tax Agency's page on deadlines.

The plusvalía municipal. The heirs also declare the increase in land value to the town hall, within six months of the death, which can be extended to one year on request. Towns may give a reduction of up to 95% to children, spouses and parents, so check the ordinance of the town where the house is.

Accept and register. The heirs accept the inheritance before a notary, with the death certificate, the certificate of last wills and the will. The Land Registry then registers the property in their names once the taxes are paid and the tax numbers of all of them appear in the deed.

The 99% relief applies to assets included in a return filed within the deadline, or filed late but before the Tax Agency asks for it. If the agency has to ask first, the relief is lost on those assets, so the calendar matters as much as the rates.

Inheritance across borders brings two tax systems together, and your home country may tax the same estate as well. Take advice from an independent lawyer or tax adviser who knows both countries, ideally while the owner is alive and can still plan.

Practical step: write down who would inherit your Spanish property and which group each heir falls in, check that your will says what you want under the law that will apply, and keep the deeds and the IBI receipt with it. If you are buying with your family's future in mind, see how we work on investments, and for buying while you live elsewhere, read buying from abroad.

Written by Nicolas Strebel.