Selling an Inherited Property in Spain: Steps and Taxes

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Selling an inherited property is one of the most common legal and financial procedures in Spain, but it is also one of the ones that generates the most confusion and family disputes. Often, heirs believe that the flat or house automatically becomes their property after the relative's death, ignoring the fact that there is a strict legal and tax itinerary that must be completed before they can hang up the "For Sale" sign. Failing to carry out these steps correctly or ignoring tax deadlines can lead to heavy penalties from the Agencia Tributaria (Tax Agency) or the inability to register the sale in the Registro de la Propiedad (Land Registry). In this detailed guide, written by the legal team at AbogadoAI, we explain step-by-step, with regulatory rigour and in a simple way, everything you need to know to sell an inherited property with total legal security.

The legal framework: Who can sell and how?

The transfer of assets by reason of death is regulated at a national level in the _Código Civil_ (Civil Code - Book III, Title III), although in Spain various regional laws coexist (such as those of Catalonia, Aragon, the Basque Country, Navarre, Galicia or the Balearic Islands) which introduce very important specialities in matters of succession.

According to Article 657 of the Civil Code, the rights to a person's succession are transmitted from the moment of their death. However, for heirs to be able to dispose of specific assets (such as a property) and sell them, they must first carry out the acceptance and partition of the inheritance.

The vacant inheritance and the hereditary community

From the death of the deceased until the inheritance is accepted, the assets form the so-called "herencia yacente" (vacant/unaccepted estate), which lacks legal personality but has the capacity to hold rights and obligations. During this phase, the property cannot be sold.

Once the inheritance is accepted by several heirs, a "comunidad hereditaria" (hereditary community) is generated. No heir can sell a specific part of the property (for example, "I am selling the living room") without the consent of the others. Article 397 of the Civil Code establishes that none of the co-owners may, without the consent of the others, make alterations to the common thing, which includes its sale. Therefore, to sell the property to a third party, the unanimity of all co-heirs is required.

Step-by-step to sell an inherited property

For the sale of a property acquired by inheritance to be fully valid and registerable in the Land Registry, it is mandatory to follow this chronological itinerary:

1. Obtaining the death and last will certificates

The first step is purely administrative. 15 business days must elapse from the death before you can request:

• _Certificado de Defunción_ (Death Certificate): Requested from the Civil Registry of the town where the death occurred.
• _Certificado de Actos de Última Voluntad_ (Certificate of Last Will and Testament): This document certifies whether the deceased made a will and before which notary. It is requested from the Ministry of Justice.
• _Certificado de Contratos de Seguros de Cobertura de Fallecimiento_ (Life Insurance Certificate): To find out if the deceased had any life insurance policy.

2. Obtaining the authorized copy of the will or declaration of heirs

• If there is a will: You must go to the corresponding notary and request an authorized copy of it.
• *If there is no will (intestate succession or ab intestato): It is necessary to urge a deed of notoriety of declaration of heirs ab intestato before a notary (according to Article 55 of the Ley del Notariado (Notarial Law)*), so that it is legally determined who the heirs are according to the order of succession established by the Civil Code (children, parents, spouse, etc.).

3. Inventory and partition of the inheritance (Deed of Adjudication)

An inventory of the deceased's assets must be made (real estate, bank balances, vehicles, debts) and their valuation carried out. Subsequently, the _Escritura de Aceptación y Adjudicación de Herencia_ (Deed of Acceptance and Adjudication of Inheritance) is drafted and signed before a notary. In this act, the heirs formally accept the assets and are allocated ownership of the property (either in proindiviso [co-ownership] or in favour of one of them after making the appropriate financial compensations).

4. Settlement and payment of the corresponding taxes

The property cannot be registered in the name of the heirs in the Land Registry without first proving the payment (or exemption) of the taxes associated with the inheritance. (See tax section below).

5. Registration in the Land Registry

Once the taxes have been settled, the deed of adjudication of inheritance is presented to the Registro de la Propiedad (Land Registry) where the property is located. This step is fundamental: a buyer or a banking institution that is going to grant a mortgage will never acquire a property if the seller does not appear as the registered owner.

6. Signing the deed of sale

Once the property is registered in the name of the heirs, they can proceed to sell it before a notary by signing the escritura pública de compraventa (public deed of sale) and the subsequent delivery of the keys.

Taxes when inheriting and selling: The double tax toll

Selling an inherited property involves facing two distinct tax moments: the moment of inheriting and the moment of selling.

``` [ Death ] │ ▼ (Deadline: 6 months) [ 1. Inheritance Tax (ISD) ] ──► [ 2. Municipal Plusvalía (IIVTNU) ] │ ▼ (Registration in the Registry and subsequent Sale) [ 3. IRPF (Capital Gain) ] ──────► [ 4. Municipal Plusvalía on the sale ] ```

Phase 1: Taxes for INHERITING the property

In order to put the property in your name, you must settle two taxes within 6 months from the death (extendable for another 6 months if requested within the first 5 months):

#### A) Impuesto sobre Sucesiones y Donaciones (ISD - Inheritance and Gift Tax) This is a state tax transferred to the Autonomous Communities. The amount to be paid depends on:

• The value of the property (currently the _Valor de Referencia de Catastro_ (Cadastral Reference Value) is used as the minimum taxable base).
• The degree of relationship with the deceased (groups I and II —children, spouses— enjoy very significant bonuses of between 95% and 99% in regions such as Madrid, Andalusia, the Valencian Community or Galicia).
• The pre-existing wealth of the heir.

#### B) Municipal Plusvalía (Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana - IIVTNU) This tax levies the increase in value of the urban land where the property is located from when the deceased acquired it until their death. It is paid to the Town Hall where the property is situated.

Phase 2: Taxes for SELLING the inherited property

Once the property is yours and you decide to sell it to a third party, you must pay tax again:

#### A) Impuesto sobre la Renta de las Personas Físicas (IRPF - Personal Income Tax) The sale of a property generates a capital gain or loss that must be declared in the savings taxable base of the IRPF for the tax year in which the sale is made.

The capital gain is calculated by subtracting the Acquisition Value from the Transmission Value:

• Acquisition Value: This is the value that was declared in the inheritance deed (which must be at least the Cadastral Reference Value), plus the expenses and taxes paid to inherit (notary, registry, agency fees, Inheritance Tax and Municipal Plusvalía of the inheritance).
• Transmission Value: This is the actual sale price, minus the expenses inherent to the transfer (real estate agency commission, municipal plusvalía of the sale, etc.).

The tax rates applicable to capital gains in the IRPF for the year 2024 are progressive:

• Up to €6,000: 19%
• Between €6,000 and €50,000: 21%
• Between €50,000 and €200,000: 23%
• Between €200,000 and €300,000: 27%
• More than €300,000: 28%

> Exemptions in IRPF: > If the seller is over 65 years old and the property sold was their primary residence (vivienda habitual), the capital gain is 100% exempt from IRPF. > If the seller is under 65 years old but reinvests the money obtained in the purchase of another primary residence within a maximum period of 2 years, they can also benefit from the exemption for reinvestment.

#### B) Municipal Plusvalía on the sale This municipal tax is paid again, but this time for the period elapsed between the date of death of the deceased (when the heir acquired the flat) and the date of sale to the new buyer. If the property is sold for a price lower than the value for which it was inherited (real capital loss), according to the jurisprudence of the Constitutional Court, this tax is not accrued.

Practical examples of taxation

To understand the impact of these taxes, we will analyse two common scenarios:

Example 1: Sale with capital gain (Carlos' Case)

Carlos inherits a flat in Madrid after his father's death.

• Acquisition value in the inheritance: The flat is valued in the inheritance deed at €150,000 (coinciding with the Cadastral Reference Value). Carlos pays €3,000 in notary, registry and municipal plusvalía expenses for the inheritance (Inheritance Tax is subsidized at 99% in Madrid for children). His actual acquisition value is €153,000 (€150,000 + €3,000).
• Sale of the property: Two years later, Carlos sells the flat for €190,000. The real estate agency expenses amount to €5,000. His actual transmission value is €185,000 (€190,000 - €5,000).
• Calculation of the capital gain: €185,000 (transmission) - €153,000 (acquisition) = €32,000 gain.
• Taxes to pay in IRPF:
• First €6,000 at 19%: €1,140
• Remaining €26,000 at 21%: €5,460
• Total to pay in his tax return: €6,600.

Example 2: Quick sale without capital gain (Sofía's Case)

Sofía inherits an apartment in Alicante.

• Acquisition value in the inheritance: It is deeded for a value of €120,000. The expenses associated with the inheritance add up to €4,000. Acquisition value: €124,000.
• Sale of the property: Sofía decides to sell the apartment immediately to avoid maintenance costs. She sells it 4 months later for €120,000. The sale expenses are €3,000. Transmission value: €117,000.
• Calculation of the capital gain: €117,000 - €124,000 = -€7,000 (capital loss).
• Tax result: Sofía will not pay IRPF on this sale. Furthermore, she will be able to offset this capital loss of €7,000 against other capital gains (for example, the sale of shares) in the same financial year or in the following 4 years. She will also not have to pay Municipal Plusvalía on the sale as it is proven that a real loss of value has occurred.

Mistakes you must avoid

• Selling without having registered the property: It is legally impossible to formalise the sale of a property before a notary if the seller does not appear as the current registered owner. Do not try to save on the costs of the inheritance deed and the Land Registry.
• Declaring an excessively low inheritance value: To pay less Inheritance Tax, some heirs declare the minimum value of the property. However, if they plan to sell it soon, this will cause a very high capital gain in the IRPF, where tax rates (up to 28%) are usually much higher than those of the Inheritance Tax (especially if the latter is subsidized in their Autonomous Community).
• Failing to meet the 6-month deadline for inheritance taxes: Penalties and surcharges from the Tax Agency and town halls for late filing of Inheritance Tax and Municipal Plusvalía can range between a 5% and 15% executive surcharge, plus late payment interest.
• Omitting the unanimous agreement of the co-heirs: Putting the property up for sale unilaterally by one of the heirs without having the signature and approval of the rest can lead to lawsuits for breach of contract and claims for damages.

Frequently Asked Questions (FAQ)

Can an inherited property be sold without being registered?

No. Although under civil law you are the owner from the acceptance of the inheritance, *Article 20 of the Ley Hipotecaria (Mortgage Law) establishes the principle of successive tract (tracto sucesivo*). This means that to register the transfer of a right (the sale), the right of the person granting it (the heir) must be previously registered. No notary will authorize the deed of sale and no bank will grant a mortgage to the buyer without this requirement.

What happens if an heir does not want to sell the house?

No one is obliged to remain in co-ownership (according to Article 400 of the Civil Code). If a co-heir refuses to sell, the others cannot force them to sign the sale, but they can initiate a judicial procedure for the division of a common thing (división de cosa común). The judge will order the public auction of the property to distribute the money obtained, which is usually the worst financial option for everyone due to the depreciation of the flat's value in an auction. Another alternative is for the heir who does want to keep the property to buy out the shares of the others (retracto de coherederos).

Is there any time limit to sell after inheriting?

Previously, there was the famous Article 28 of the Mortgage Law, which limited the protection of a third-party purchaser during the two years following the death of the deceased if there were no forced heirs (in case a secret child or a later will appeared). However, this article was repealed on September 3, 2021. Currently, the inherited property can be sold immediately after registering it in the Land Registry, without having to wait for any legal limitation period.

What taxes does a non-resident heir in Spain pay when selling?

If the heir resides outside of Spain (whether Spanish or foreign), the sale of the property is taxed under the _Impuesto sobre la Renta de no Residentes_ (IRNR - Non-Resident Income Tax). The tax rate applicable to the capital gain is 19% if they reside in the European Union, Iceland or Norway, and 24% for residents of the rest of the world. In addition, the buyer has the legal obligation to withhold 3% of the sale price and pay it to the Spanish Treasury as a payment on account of the non-resident seller's tax.

In summary

• Unanimity mandatory: To sell the inherited property, it is essential to have the consent and signature of all declared co-heirs.
• Prior registration required: Before selling to a third party, the heirs must accept the inheritance before a notary and register the property in their name in the Land Registry.
• Critical tax deadline: You have a maximum period of 6 months from the death to settle the Inheritance Tax and the Municipal Plusvalía of the inheritance to avoid penalties.
• Double taxation: Remember that you will pay taxes for inheriting (ISD and Plusvalía) and, subsequently, for selling (IRPF on the capital gain and a new Municipal Plusvalía).
• Valuation strategy: Correctly adjusting the value of the property in the inheritance deed (respecting the Cadastral Reference Value) is key to reducing the tax impact of the IRPF on the subsequent sale.

General legal information, not personalised legal advice. For your specific situation, ask your question for free at AbogadoAI — answers grounded in Spanish law (BOE), in English.

This is general information, not legal advice. Verify on the BOE or consult a lawyer for your specific case.