What Happens to Your Spanish Property When You Die: Cross-Border Inheritance Guide
If you're British, German, Chinese, or from any country outside Spain and you own property here, Spanish inheritance law applies to that property when you die.
But which country's law applies? Spain's or yours? Who pays tax where? Can your UK will cover your Spanish property? Do your children inherit automatically or does Spanish forced heirship override your wishes?
Most international property owners don't think about this until it's too late—when a family member dies and the survivors discover they're stuck in a cross-border legal maze involving two countries' laws, two tax systems, translations, apostilles, and conflicting inheritance rules.
This guide explains how international estates actually work when Spanish property is involved, what mistakes to avoid, and how to structure things properly before there's a problem.
The First Question: Which Country's Law Applies?
This confuses everyone initially because the answer is: it depends.
For EU and EEA nationals (Germans, Dutch, French, Belgians, Scandinavians), there's a regulation called Brussels IV (EU Regulation 650/2012) that's been in effect since 2015. The basic rule: the law of the country where you were habitually resident at death applies to your entire estate worldwide.
So if you're German but you've been living in Marbella for the last ten years, Spanish succession law applies to everything—your Spanish property, your German bank accounts, your investments, all of it—unless you specifically chose German law in your will.
That choice is called professio iuris. You can elect in your will that the law of your nationality applies instead of the law of your residence. This matters because German succession law is different from Spanish succession law, particularly around forced heirship and what you can leave to your spouse versus your children.
For UK nationals (post-Brexit), it's more complicated. The UK isn't part of Brussels IV anymore. Spain still applies the regulation unilaterally for Spanish property, meaning if you're British and resident in Spain, Spanish law applies to your Spanish property. But your UK assets follow UK law. You end up with two separate inheritance processes.
For Chinese nationals (or Americans, Canadians, anyone outside EU/EEA), the connecting factor is simpler: Spanish property follows Spanish law. Period. Your property in China or the US follows the law there. Separate processes, separate legal systems.
The critical point: even if foreign law applies to the succession (through professio iuris or residence rules), Spanish tax law always applies to Spanish property. You can't avoid Spanish inheritance tax on a Spanish property by choosing UK law or Chinese law. The civil law (who inherits what) and tax law (what tax they pay) are separate questions.
Spanish Forced Heirship: The Part That Surprises International Buyers
If Spanish law applies to your succession, you hit forced heirship rules.
Spain divides your estate into three portions. One third goes to your children in equal shares (strict legitime). Another third also goes to your children but you can distribute it unequally between them (improvement portion). The final third is yours to leave to anyone (free disposal).
So two thirds of your estate is locked into going to your children whether you want that or not.
This shocks people from the UK where you have complete freedom to leave your estate to whoever you want. It also creates problems for blended families (children from a first marriage, second spouse), unmarried partners, or anyone who simply doesn't want to leave everything to their kids.
The professio iuris tool becomes critical here. If you're British and living in Spain, you can elect UK law in your Spanish will. UK law doesn't have forced heirship. You can leave everything to your spouse or partner or a charity or whoever you want. Spanish forced heirship doesn't apply.
But you have to actually do this. You have to execute a Spanish will that explicitly states you choose the law of your nationality. If you die without doing this, Spanish forced heirship applies automatically because you were resident here.
Important limitation for Chinese nationals: China isn't part of Brussels IV, so professio iuris doesn't work the same way. For Chinese property owners in Spain, Spanish law applies to the Spanish property regardless. The planning tools are different (corporate structures, lifetime gifts, specific bequests), not choice of law.
The Tax Problem: Two Countries, Two Tax Systems
Spanish inheritance tax applies to Spanish property. Your home country may also have inheritance tax or estate tax.
UK situation post-Brexit:
The UK has Inheritance Tax (IHT) at 40% on estates above £325,000. Spain has Impuesto sobre Sucesiones (Spanish inheritance tax) ranging from roughly 7.65% to 34% on the base amount, multiplied by coefficients that can push effective rates much higher.
There's no tax treaty between Spain and UK on inheritance tax. So if you're a UK national with Spanish property, your estate could face both UK IHT and Spanish inheritance tax on the same assets.
Spain provides a credit mechanism (Article 23 of the Spanish inheritance tax law) for foreign tax paid, but the coordination is messy and requires planning. You can't just assume it works out automatically.
Chinese situation:
China doesn't currently have a national inheritance tax. It was abolished in 1985 and hasn't been reintroduced (though there's periodic discussion about bringing it back). So Chinese nationals inheriting Spanish property only face Spanish tax, not Chinese tax.
Spanish inheritance tax for non-residents used to be much higher than for residents, but a 2014 EU Court of Justice ruling (extended to third-country nationals by Spanish Supreme Court in 2020) means Chinese heirs can now apply the same regional tax rates as residents. In Andalusia, that's a 99% reduction for direct family (children, spouse, parents). Massive tax savings.
German/Dutch/Belgian situation:
Germany has inheritance tax (Erbschaftsteuer), Netherlands has inheritance tax (erfbelasting), Belgium has inheritance tax (succession/estate duty). All three countries have some level of tax treaty with Spain, though the treaties don't always eliminate double taxation—they primarily clarify which country has primary taxing rights.
For Germans, the treaty generally gives Spain primary rights to tax Spanish real estate. The German tax applies to worldwide estates but provides credit for Spanish tax paid. Net result: you typically pay the higher of the two taxes, not both in full.
The planning point: if you structure things correctly (corporate ownership, lifetime gifts, specific tax elections), you can significantly reduce total tax burden. If you ignore it, you pay maximum rates in both countries.
The Dual Will Solution
If you have assets in multiple countries, you need wills in each country.
Not one global will. Separate wills for Spanish assets and separate wills for assets in your home country.
Why? Because if you have one UK will covering everything, when you die, your Spanish property has to go through Spanish courts using a UK will that needs to be recognized in Spain (apostilled, translated, verified). This adds months to the process and significant legal costs.
A Spanish will covering only Spanish assets bypasses all of that. The Spanish notary processes the Spanish estate immediately using the Spanish will. Your UK assets go through UK probate using the UK will.
The critical drafting point: each will must explicitly state it only covers assets in that jurisdiction and doesn't revoke the other will. Standard boilerplate language like "this will revokes all prior wills" accidentally cancels your Spanish will when you update your UK will three years later.
For Chinese nationals, the same principle applies. You want a Spanish will covering Spanish property and a Chinese will covering Chinese assets. The linguistic and procedural barriers between Spain and China make this even more important than the UK situation.
What Actually Happens When Someone Dies: The Process
Let's say a German resident of Marbella dies owning a €600,000 villa. Two adult children in Germany. Spanish will exists. What happens?
Step 1: Death certificate and initial documents
German death certificate needs to be apostilled (Hague Apostille Convention) and officially translated into Spanish. The Spanish notary needs this to begin.
Step 2: Certificate of last wills
Spain has a central registry of wills. You request a certificate showing whether the deceased made any wills in Spain. If there's a Spanish will, it's located and obtained from the notary who executed it.
If the deceased made wills in Germany, you also need a German certificate of wills (Zentrales Testamentsregister) to confirm there are no conflicting wills.
Step 3: European Certificate of Succession
For EU nationals, the Spanish notary can issue a European Certificate of Succession under Brussels IV. This document is valid throughout the EU and certifies who the heirs are and what they inherit. Extremely useful if there are assets in multiple EU countries.
For UK or Chinese nationals, this doesn't exist. You need separate probate processes in each country.
Step 4: Property valuation
Spanish inheritance tax is calculated on the real market value of the property. As of 2022, there's a minimum valuation based on the cadastral reference value (valor de referencia), which the tax authority publishes. You can contest this with an independent appraisal if the real market value is lower, but you need actual evidence.
Step 5: Tax calculation and payment
The heirs (not the estate) are responsible for Spanish inheritance tax. Each heir pays tax on what they receive.
In Andalusia, if the heirs are children and the estate is under €1,000,000, the 99% reduction means they pay almost nothing (often under €1,000 total). But this only applies if you file within six months (extendable to twelve months with penalty).
If the heirs are non-residents and you miss the deadline, you pay the 20% late filing surcharge plus daily interest. This is where many international estates go wrong—heirs in Germany or UK don't realize there's a Spanish filing deadline and miss it.
Step 6: Acceptance deed before Spanish notary
All heirs sign the deed of acceptance and distribution of the estate (escritura de aceptación y adjudicación de herencia) before a Spanish notary. If heirs are abroad, they can grant power of attorney to someone in Spain (a lawyer, family member, trusted person) to sign on their behalf.
That power of attorney needs to be notarized in the heir's home country, apostilled, and translated. For Chinese heirs, this process takes 4-8 weeks minimum and involves the Chinese Ministry of Foreign Affairs plus certified public notary.
Step 7: Land Registry inscription
Once the tax is paid and the acceptance deed is signed, the property title is transferred to the heirs at the Spanish Land Registry. You present the deed, proof of tax payment, and supporting documents. The Registry verifies everything and inscribes the new owners.
Step 8: Municipal capital gains tax
There's an additional local tax called plusvalía municipal (technically IIVTNU). It's calculated based on the increase in land value between when the deceased acquired the property and when they died. The heirs are responsible for this tax as well. It's paid to the local town hall where the property is located, separate from the inheritance tax paid to the regional tax authority.
Recent court rulings have limited this tax—it can't be charged if there was no actual increase in value—but it still applies in most cases.
Total timeline from death to heirs having clear title: typically 3-6 months if everything goes smoothly. Up to 12 months if there are complications (missing documents, heirs abroad who are slow to respond, contested valuations).
Common Mistakes That Cost Money
Mistake 1: No Spanish will
If you die without a Spanish will, your heirs have to go through a declaration of heirs process (acta de notoriedad) before a Spanish notary or get your foreign will recognized in Spain. Either way adds 2-4 months and €2,000-€5,000 in legal costs.
A Spanish will costs €150-€300 to execute. The ROI is obvious.
Mistake 2: Not updating contact information with the Spanish notary
If you execute a Spanish will in 2020 when you live in Marbella, then move back to the UK in 2023, and die in 2025, your heirs need to track down that will. If the Spanish notary doesn't have current contact information, it can be difficult to locate. The central registry helps but it's not instantaneous.
Keep a copy of your Spanish will with your UK will and tell your heirs where both are located.
Mistake 3: Assuming your UK will covers Spanish property
It can, technically. But it requires recognition in Spain (apostille, translation, verification that UK law allows it, confirmation that it doesn't violate Spanish public policy). Much slower and more expensive than just having a Spanish will for the Spanish property.
Mistake 4: Not planning for the 6-month tax deadline
Heirs abroad often don't know about the Spanish inheritance tax filing deadline. They're dealing with grief, handling the UK estate, and they don't realize Spain has a separate clock ticking.
Miss the six-month deadline and you pay 20% surcharge plus daily interest on whatever tax is owed. On a €600k property even with the 99% Andalusia reduction, that penalty can be €500-€2,000.
Mistake 5: Joint bank accounts without understanding Spanish rules
Many couples have joint accounts. Spanish banks freeze accounts when one account holder dies. Some banks freeze 50% (the deceased's half), others freeze 100% until inheritance tax is paid.
This creates immediate cash flow problems if the surviving spouse needs money for living expenses or to pay the inheritance tax itself.
Better structure: each spouse has individual accounts plus one small joint account for monthly expenses. Minimize the amount that gets frozen.
Unmarried Partners: The Biggest Trap
If you own Spanish property with an unmarried partner, Spanish law treats that partner as a complete stranger for inheritance purposes.
Doesn't matter if you've been together 20 years. Doesn't matter if you have kids together. Doesn't matter if you're registered as pareja de hecho (domestic partnership). For Spanish inheritance purposes, an unmarried partner is in the same category as your neighbor or your accountant.
The tax implications are brutal. Children inheriting in Andalusia pay almost nothing (99% reduction). An unmarried partner inheriting the same amount pays 30-40% effective rate.
On a €500,000 property:
Child pays: ~€5,000
Unmarried partner pays: ~€150,000-€200,000
The difference is whether you're married or not.
Even worse: if you have children from a prior relationship, Spanish forced heirship gives them two thirds of your estate automatically. Your unmarried partner gets nothing unless you specifically leave them the one third free disposal portion in your will.
If you don't have a Spanish will and you die with Spanish property, your unmarried partner is completely disinherited under Spanish intestacy rules. Everything goes to your children or parents.
The Chinese Buyer Situation: Specific Challenges
Chinese nationals buying property in Costa del Sol present unique challenges that most Spanish lawyers don't handle well.
Challenge 1: Language barrier at every step
Spanish notaries don't speak Chinese. Spanish tax authorities don't speak Chinese. Death certificates from China, wills from China, powers of attorney from China—all need certified translation Spanish ↔ Chinese.
Find these translators in advance. When someone dies, you don't want to be scrambling to find a qualified sworn translator who can handle legal documents in both languages.
Challenge 2: Apostille process in China
China is part of the Hague Apostille Convention (as of November 2023), which streamlines authentication of documents. But the process still involves the Chinese Ministry of Foreign Affairs plus certified public notary. Timeline: 4-8 weeks minimum.
If a Chinese heir needs to grant power of attorney to someone in Spain to handle the estate, that 4-8 week timeline adds directly to the overall inheritance process.
Challenge 3: No inheritance tax treaty
There's no tax treaty between Spain and China on inheritance tax. But as mentioned earlier, China currently doesn't have inheritance tax, so this is less of a problem than it sounds. The Chinese heir only faces Spanish tax.
The 2014 EU Court ruling (extended to non-EU nationals in 2020) means Chinese heirs get the same treatment as Spanish or EU heirs. In Andalusia with the 99% reduction for direct family, the tax is minimal.
Challenge 4: Beneficiary designation vs. testamentary succession
Chinese succession law works differently from Spanish law in certain respects. Some Chinese clients are used to designating beneficiaries on accounts and insurance policies rather than relying on wills. In Spain, those designations work for insurance policies but not for real property. Real property must pass through the formal inheritance process with tax payment and registry inscription.
Educate Chinese clients on this from the beginning. The property doesn't automatically transfer to a designated person. There's a required legal process.
Planning tool for Chinese clients:
Execute a Spanish will in Spain covering the Spanish property. Keep it simple. Direct bequest to spouse and children in equal shares (or whatever the client wants within forced heirship rules). Appoint a Spanish lawyer as executor with power to handle everything.
This avoids the need for the Chinese heirs to travel to Spain or grant complex powers of attorney. The executor handles the entire process, gets the property transferred, and then either sells it (distributing proceeds to China) or maintains it per the heirs' instructions.
Cost: €2,000-€4,000 executor fee for full administration. Much cheaper than Chinese heirs flying to Spain multiple times, hiring translators, navigating the system themselves.
When Corporate Structures Make Sense (and When They Don't)
Some international buyers hold Spanish property through a company—UK Ltd, Spanish SL, Luxembourg holding company, whatever.
The inheritance implications are different.
If the property is owned by a company and you own shares in the company, when you die, the heirs inherit shares, not the property directly. The property stays in the company.
Potential advantages:
Easier partial transfer: You can gift 10% of the shares to your daughter, 15% to your son, etc., over time. You can't easily gift 10% of a physical property.
Continuity: The company continues owning the property. Heirs become shareholders. No Land Registry transfer, no notary fees on the property itself (though there are fees on the share transfer).
Multi-jurisdictional families: If you have heirs in three different countries, it's easier for them to each own shares in a Spanish company than to co-own a physical property in Spain and coordinate decisions about maintenance, rental, eventual sale.
Potential disadvantages:
No 99% tax reduction: The Andalusia 99% inheritance tax reduction only applies to direct inheritance of property or qualifying family businesses. A holding company with no real economic activity doesn't qualify. You lose the tax benefit.
Transparency rules: Spanish tax law has anti-avoidance rules. If the company's only asset is Spanish real estate and it has no genuine business activity, Spain can "look through" the company and tax it as if the heirs inherited the property directly. You get the complexity of corporate structure without the tax benefit.
Ongoing costs: Companies have annual filing requirements, accounting costs, potential corporate tax. These can run €1,500-€3,000/year. On a €600k property, that's significant overhead.
When corporate structures make sense:
If you're running actual rental business (multiple properties, active management, employees)
If you're doing fractional ownership with unrelated parties (investors, business partners)
If there are legitimate asset protection reasons beyond just inheritance tax
When they don't:
If your only goal is reducing inheritance tax (the 99% Andalusia reduction for direct inheritance is better)
If it's a single property for personal use or occasional rental
If you don't want the ongoing administrative burden
The bottom line: corporate structures can work for international estates but they need to be set up correctly for legitimate business reasons. If it's purely a tax play, Spanish authorities will challenge it.
What You Should Actually Do
If you own Spanish property as an international buyer, here's the minimum planning:
1. Execute a Spanish will covering Spanish property
Cost: €150-€300. Do this tomorrow. It should state:
Which assets it covers (only Spanish assets)
That it doesn't revoke wills in other jurisdictions
Your choice of law (if you want your national law to apply instead of Spanish law)
Who inherits what (within forced heirship limits unless you've chosen law that doesn't have forced heirship)
Appointment of executor if desired
2. Maintain updated records
Keep copies of:
Spanish will
Property deed
Latest IBI tax bill (shows cadastral reference and value)
Bank account information
Contact information for Spanish lawyer, notary, tax advisor
Store these somewhere your heirs can access them. If everything is locked in your house in Spain and your heirs are in Germany, they can't get to it when they need it.
3. Communicate with your heirs
Tell your children or spouse or whoever your heirs are: "I own property in Spain. There's a Spanish will. Here's where it is. Here's the Spanish lawyer's contact information. If something happens to me, call them immediately."
Most international estates get messy because heirs don't know what exists, where things are, or who to contact.
4. Review every 3-5 years
Spanish law changes. Your family situation changes (divorce, new children, deaths). Review your Spanish will every few years to make sure it still reflects what you want and complies with current law.
5. Consider the tax implications now
If you're married to someone who isn't Spanish, run the numbers on inheritance tax both for yourself dying first and for your spouse dying first. Understand what the tax will be.
If it's significant, look into life insurance to cover it, or restructuring ownership, or making lifetime gifts, or other planning tools.
Don't wait until someone dies and the survivors are stuck with a €100,000 tax bill they weren't expecting.
How This Works in Practice
At our practice, we handle the full cycle: pre-death planning (wills, tax structuring) and post-death administration (probate, tax filings, property transfers).
What makes cross-border estates complicated is the coordination between legal systems. Spanish notary, foreign death certificate, apostille, translation, dual wills, tax filings in two countries, currency exchange, international money transfers, language barriers.
Most Spanish lawyers won't touch this. Too many moving parts, too much coordination with foreign jurisdictions, language barriers.
We work in Spanish, English, and Chinese. We handle UK estates, German estates, Chinese estates. We coordinate with foreign lawyers when needed (UK solicitors, German Rechtsanwälte, Chinese attorneys).
The goal is making it simple for the client and heirs. You execute a Spanish will today. When something happens, your heirs call us. We handle everything: document gathering, translations, apostilles, tax filings, notary coordination, registry inscription. They get clear title to the property without flying to Spain five times or navigating the system themselves.
Antonio Aguilera
