A decade ago, a son inheriting a €1.5 million villa in Mijas faced a Spanish inheritance tax bill of €474,260. Under the rules now in force in Andalucía, the same inheritance produces a bill of roughly €4,742 — and if the estate had been worth under €1 million per heir, nothing at all. The worked example comes from Tejada Solicitors, a Málaga tax practice, and it captures one of the least-advertised facts about owning property on the Costa del Sol: Andalucía has dismantled its inheritance tax for close family to the point where, for most direct heirs, it barely exists.
Yet the question of what happens to a Marbella home when its owner dies is about far more than tax. Spanish law decides who may inherit unless you take a specific legal step to opt out of it. A foreign will can take months — sometimes more than a year — to be recognised in Spain. And the Spanish tax authorities run a six-month clock from the date of death that does not pause while a family grieves. For anyone buying between Marbella, Estepona, Benahavís and Casares, succession is not an afterthought; it is part of structuring the purchase correctly on day one. This guide sets out what foreign owners actually face, with the figures and legal references behind each claim.
From Six Figures to a Rounding Error: How Andalucía Took Apart Its Inheritance Tax
Spain's inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones) is a state tax with a progressive scale running from 7.65% to 34% under Law 29/1987, before kinship multipliers that can push the effective rate higher still. Crucially, the tax is paid by the heir, not the estate — and its administration is devolved to Spain's seventeen autonomous communities, which may layer their own allowances on top. That devolution is why the same inheritance can be taxed at wildly different levels in different parts of Spain, and why Andalucía's position matters so much to anyone who owns property here.
Andalucía moved in two steps. Decree-Law 1/2019 introduced a 99% reduction in the tax payable by heirs in Groups I and II — children, grandchildren, spouses and parents — for deaths from April 2019 onwards. Law 5/2021 then consolidated the regime and set a personal allowance of €1,000,000 per heir for those same groups. The mechanics are worth being precise about: each child or spouse inherits the first €1 million entirely free of tax, and on anything above that threshold the calculated bill is reduced by 99%. A daughter inheriting an estate worth €1.8 million pays tax on €800,000 — and then keeps only 1% of the resulting liability, a few thousand euros rather than a six-figure sum. Registered unmarried partners (parejas de hecho) are treated as spouses, but only if the partnership is registered in the Andalusian registry — an administrative detail with enormous financial consequences, as we set out below.
Non-residents are not excluded from any of this. Following the European Court of Justice ruling of September 2014 (case C-127/12), Spain may no longer deny regional tax benefits to non-resident heirs, and the principle has since been extended in practice to heirs resident outside the EU as well. A son living in London or Toronto inheriting his parents' villa in Nueva Andalucía applies the same €1 million allowance and the same 99% reduction as a lifelong Sevillano. For context on how this fits into the broader cost picture of ownership, our non-resident tax and cost guide to buying in Marbella covers the purchase-side taxes in detail.
Why does the €1 million threshold matter so much here, specifically? Because Marbella property values have moved well past it. According to Idealista's April 2026 price report, the average asking price across Marbella stands at 5,596 €/m², up 9.0% year on year, with Nagüeles–Milla de Oro averaging 6,872 €/m². A conventional 200 m² family home in many western Marbella neighbourhoods is now a seven-figure asset, and the villas of Sierra Blanca, the Golden Mile and La Zagaleta sit several multiples above the allowance. In most other European jurisdictions, assets at these levels would generate substantial death duties. In Andalucía, passed between spouses and children, they generate almost none — a structural advantage the region's lawmakers built quite deliberately to attract and retain international wealth.
Who Inherits Is Not Automatic: Forced Heirship and the Choice-of-Law Clause
Tax is only half the succession question. The other half — who actually receives the property — is governed by rules that surprise many foreign owners. Spanish succession law operates a system of forced heirship (the legítima): broadly, two-thirds of an estate is reserved for the deceased's children, with the surviving spouse entitled to a life interest (usufructo) rather than outright ownership. An English owner who assumes the freedom to leave everything to a spouse, a stepchild or a charity may find that Spanish law, applied by default, says otherwise.
The escape route is European. EU Regulation 650/2012 — usually called Brussels IV — has governed cross-border successions since 17 August 2015. Its default rule is that the law of the deceased's habitual residence applies to the whole estate, which means a foreign national living full-time in Marbella falls under Spanish succession law, forced heirship included. But Article 22 of the Regulation allows any testator to elect the law of their nationality instead, simply by stating that choice in a will. A British owner who chooses English law recovers complete testamentary freedom over the Spanish villa; a Dutch or French owner can do the same with respect to their national rules. Spanish notaries and courts apply the Regulation universally — it does not matter that the United Kingdom never participated in Brussels IV or has since left the EU, because it is Spain, not the UK, that is applying the rule.
The practical lesson is short: the choice-of-law clause costs nothing to include and can redirect an entire estate, but it only works if it is actually written down before death. Owners who relocated to Spain years ago and have never revisited a will drafted at home are the group most exposed — habitual residence shifts quietly, and with it, by default, the law that will govern everything they own.
The Cheapest Insurance in Spanish Property: A Spanish Will
A foreign will is legally capable of disposing of Spanish assets, but relying on one is an expensive courtesy to leave your heirs. Before a UK or Irish will can be used in Spain it must typically pass through probate at home, then be translated by a sworn translator, apostilled, and presented to a Spanish notary — a sequence that routinely adds months and meaningful professional costs to an administration that the Spanish tax calendar does not wait for. A Spanish will covering only Spanish assets cuts all of that away.
The mechanics are reassuringly tidy. The will is signed before a notary, who retains the original and notifies its existence to the Central Register of Wills (Registro General de Actos de Última Voluntad) in Madrid. On death, heirs obtain a certificate from the register identifying which notary holds the final will — no searching through drawers, no competing documents, no ambiguity about which version governs. Drafted bilingually, containing the Article 22 choice-of-law election, and limited expressly to Spanish assets so it cannot accidentally revoke a will made at home, it is a one-hour appointment that typically costs less than a dinner for two at a Golden Mile beach club.
One category of owner needs particular care: unmarried couples. Andalucía treats registered parejas de hecho as spouses for inheritance tax, but the registration must exist in the Andalusian registry before death. Tejada Solicitors cite the case of a British couple with a modest €160,000 estate: unregistered, the surviving partner owed €46,281; registered, the bill was zero. For couples who bought together in El Paraíso or La Cala de Mijas without formalising anything, that single administrative act may be worth more than any other piece of estate planning available to them.
The Six-Month Clock: Deadlines, Plusvalía and the Paperwork of Succession
Spanish inheritance tax must be declared and paid within six months of the date of death, under Article 67 of Law 29/1987. A further six-month extension is available, but only if requested within the first five months — miss the window and the estate faces surcharges and late-payment interest on top of the tax itself. The declaration for Andalusian assets is filed with the Junta de Andalucía, supported by the death certificate, the will certificate from the central register, property deeds, bank certificates and an inventory of assets and liabilities. For heirs living abroad, gathering apostilled foreign documents inside that window is precisely where un-planned successions run into trouble, and most families appoint a local lawyer under power of attorney to run the process.
Inheriting a property also triggers a second, smaller tax at municipal level: the plusvalía municipal, charged by the town hall on the increase in the cadastral land value since the property was last transferred. In an inheritance it is the heir who pays, on the same six-month timetable, extendable on request. Since the 2021 reform of the tax, the liability can be calculated under either an objective cadastral method or by reference to the real gain, whichever is lower, and several town halls apply reductions for a main residence passing to close family. The amounts are rarely dramatic relative to property values in this market, but the deadline is the same and the surcharges for ignoring it are real.
Two further reliefs are worth knowing about. Andalucía applies a 99% reduction on the value of a family home inherited by a spouse, descendant or ascendant who meets residence conditions, subject to a cap per heir and a requirement to keep the property for three years. And the 99% regime is not confined to death: lifetime gifts between direct relatives enjoy the same reduction under the region's gift tax rules, which is why a growing number of owners now transfer Spanish property to children during their lifetime as part of a wider plan. Both reliefs come with conditions that reward early, professional structuring rather than improvisation after the fact.
Planning at the Point of Purchase, Not After
Succession outcomes are largely set at the moment of purchase. How the title is held — one name or two, whether adult children appear on the escritura, whether a usufruct is reserved — determines what passes on death, to whom, and through how many taxable events. Because each heir carries their own €1 million allowance, the distribution of an estate across spouse and children can move a family from a modest bill to no bill at all. None of this requires exotic structures; it requires the right questions asked before the notary appointment, not after. The same logic applies to where you buy: values in prime zones are rising fastest — our zone-by-zone guide to the Golden Mile tracks resale prices above €15,000/m² on the beachfront — so an estate that sits comfortably under the allowance today may not stay there for long.
A necessary caveat: this article describes the rules in general terms as they stand in mid-2026. Inheritance interacts with the tax system of your home country — a UK-domiciled owner, for instance, may still face British inheritance tax on worldwide assets regardless of what Andalucía charges — and regional rules can change with regional politics. Nothing here is personal legal or tax advice. Before buying, gifting or making a will, take advice from a qualified Spanish abogado or tax adviser who can look at your nationality, residence and family situation in the round.
The conclusion for buyers, though, is hard to miss. The Costa del Sol already offers one of Europe's most liveable climates and one of its most liquid prime property markets. Andalucía has added something rarer: a legal environment in which a family home in Marbella, Estepona or Benahavís can pass to the next generation almost intact, provided the paperwork — a Spanish will, a choice-of-law clause, perhaps a pareja de hecho registration — is done while everyone is still healthy enough to find it boring. Few investments of an afternoon return as much.
If you are weighing a purchase on the Costa del Sol and want ownership structured with the next generation in mind, browse our current Marbella and Costa del Sol properties or talk to the Domosmar team — we work alongside independent Spanish lawyers and can point you to the right advice from the first viewing onward.
