Andalusian Inheritance Tax Guide 2026

Updated on 9 Jul at 11:18 am

Many expatriates and foreign residents who own property on the Costa del Sol wonder what will happen when they receive an inheritance in Andalusia. Recent legal changes have drastically reduced the impact of the Andalucía Inheritance Tax, although not all heirs are fully exempt.

This guide explains how the tax system works in Andalusia, outlines the applicable allowances, and provides guidance on steps to avoid unnecessary complications.

Overview of Inheritance Tax in Andalusia

The Andalucía Inheritance Tax is a levy on beneficiaries who receive assets or rights after a person’s death. Unlike in some other countries, in Spain it is not the estate of the deceased that pays the tax, but the heirs.

The tax is delegated to the Autonomous Communities. For assets in Andalusia, the regional rules apply, which have been significantly modified in recent years to encourage investment and facilitate wealth transfers, particularly among close relatives.

Applicability to residents and non-residents

Since 2019, Andalusia has reformed the inheritance tax to the point of near elimination for direct heirs. Law 5/2021 introduced an allowance of up to €1,000,000 per heir and a 99% reduction above this threshold.

Whether resident or not, if you own property in Spain, your heirs must declare these assets here. This requirement is independent of nationality or residence of either the deceased or the heir.

If the estate is valued at less than €1 million, the heirs will not be required to pay inheritance tax. However, properties in areas such as Mijas, Marbella, Estepona, or Nerja often exceed this amount. With the new law, even estates exceeding €1 million are taxed at a rate of only about 1% of their value. The rules apply to real estate, shares, and bank accounts located in Andalusia.

Practical example

An American citizen who owns a villa in Mijas valued at €1,500,000 passes away. His son, living in the UK, would have previously paid €474,260.08 in taxes. Under the new law, he will only owe €4,742.60. Declaring these assets in Spain does not eliminate the obligation to report the inheritance to the tax authorities in his country of residence. Whether a double taxation treaty exists between two countries largely influences the distribution of taxes. To prevent formal claims or requests from either side, transparency is always recommended. Although this change clearly benefits high-value estates, it can also be seen as a strategy to attract foreign investment, prevent capital outflow, and stimulate the regional economy.

Thanks to the Andalusian allowance, the inheritance tax in Spain drops from hundreds of thousands of euros to only a few thousand.

Recent legislative changes

Since April 2019, heirs in Groups I and II (children, spouses, grandchildren, parents) have benefited from a 99% reduction. This was introduced by Decree-Law 1/2019 and consolidated in Law 5/2021.

In practice, this means that most heirs in these groups pay little or nothing at all. Andalusia has therefore become one of the most favourable regions in Spain for receiving an inheritance, further enhancing the property appeal of destinations like Marbella,Malaga or Nerja.

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Tax rates and allowances

Although most residents and expats inheriting in Andalusia benefit from the 99% allowance under the Andalucía Inheritance Tax, it is important to understand the general tax rates and reductions. This is especially relevant for heirs who do not fall within the groups entitled to the allowance, as well as for those managing larger estates or more complex structures.

This section provides a clear overview of the 2025 applicable tax rates and the main reductions based on the relationship to the deceased, with practical examples to illustrate how the Andalucía succession tax may apply in specific cases.

General tax rates applicable in 2025

While the 99% reduction significantly lowers the tax burden, it is useful to know the general applicable tax scale, particularly for heirs not included in the eligible groups.

In 2025, the tax rates range between 7.65% and 34%, calculated on the net value inherited (that is, assets minus debts and liabilities). The applicable percentage depends on both the value of the estate and the degree of kinship with the deceased, in line with Law 29/1987, articles 21 and 22, and the scales published by the Spanish Tax Agency for ISD 2025.

Allowances based on relationship to deceased

Who can benefit from the Andalusian inheritance tax changes?

The inheritance tax allowance only applies to first- and second-degree relatives (Groups I and II), including descendants, ascendants, spouses, and registered de facto partners. In contrast, siblings, uncles, nephews, and other collateral relatives (Groups III and IV) are excluded and do not benefit from the special exemption reduction.

The law considers registered de facto couples (parejas de hecho) the same as married couples for inheritance tax purposes, but only if they are registered in the Andalusian Registry of De Facto Couples (Registro de Parejas de Hecho). This allows a surviving partner to avoid inheritance tax if the estate’s value is less than €1 million. For estates exceeding this amount, a 99% allowance reduces the tax owed. In practice, heirs in Groups I and II rarely pay more than an effective 1%, but this rate is neither fixed nor automatic.

Practical example

Each partner in a British unmarried couple living together in Andalusia makes a will naming the other as heir, and the estate is valued at €160,000. If the couple is not registered in the Andalusian Registry of De Facto Couples, the surviving partner would need to pay €46,281.68. If registered, no inheritance tax would be owed.

Note that this exemption is granted only if the estate’s origin is clearly proven and if the inheritance is explicitly included in a will signed before a notary public. Inheritance tax can be a significant financial burden during challenging times. Planning ahead can reduce the burden on your loved ones. The information provided in this article is not intended as legal advice but as general information on legal matters.

Special Considerations for minors and disabled Beneficiaries

Heirs who are minors or have a disability qualify for additional reductions. These can amount to €250,000 or more, depending on the level of disability. In many cases, reduced rates or additional allowances also apply (Law 5/2021 and Law 29/1987, art 20).

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Filing procedures and deadlines

Meeting the legal deadlines and submitting the correct documentation is crucial when handling the Andalucía Inheritance Tax. Proper management helps prevent surcharges and penalties while ensuring heirs benefit from all reductions and allowances available under current law.

For expatriates and non-residents, filing is especially important, as it often requires coordination between tax jurisdictions and gathering documents from both Spain and the country of residence. Knowing the deadlines, possible extensions, and documentation requirements allows you to approach the process with greater confidence.

Many clients choose to grant a power of attorney in Spain, allowing their solicitor to handle inheritance paperwork and submissions directly with the Junta de Andalucía.

The deadline to submit the Andalucía Inheritance Tax declaration is six months from the date of death, with the possibility of a further six-month extension if requested within the first five months (Law 29/1987, Article 67; Regulation RD 1629/1991, Article 80).

The submission is made before the Junta de Andalucía, either in person or online. Essential documents include the death certificate, the will, bank certificates, property deeds, and an inventory of assets and liabilities.

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Exemptions and deductions

Another key aspect to understand is the most relevant exemptions and deductions applicable to the Andalucía Inheritance Tax in 2025. These fiscal measures can significantly reduce the tax burden depending on the type of inherited asset, the relationship with the deceased, or the heir’s personal circumstances.

All exemptions and deductions are regulated under State Law 29/1987, Regulation RD 1629/1991, and the current regional legislation (Law 5/2021), ensuring the legality and enforceability of each tax benefit.

Exemptions for primary residence

According to Article 20.2.c) of Law 29/1987 and Decree-Law 1/2019, Andalusia grants a 99% reduction on the value of the family home when the heir is a spouse, descendant, ascendant, or a collateral relative over the age of 65 who has lived with the deceased for at least two years.

For this reduction to apply, the property must be kept for a minimum of three years after acquisition, except in cases of force majeure. Additionally, the maximum exempt amount per heir is €180,000, although this may vary depending on the property’s value and the number of heirs involved.

Deductions for funeral expenses and debts

Under Article 13 of Law 29/1987, heirs are allowed to deduct justified funeral expenses from the estate. This includes burial, cremation, ceremony, and other related costs, provided they were paid by the estate heirs.

Additionally, Article 14 of the same law allows the deduction of proven debts of the deceased, including mortgage loans, personal loans, outstanding taxes, and debts to suppliers. These deductions are subtracted from the gross value of the estate to calculate the taxable base on which the inheritance tax is applied.

Other applicable deductions

Family businesses: Under Article 20.2.c) of Law 29/1987 and Article 4 of Law 19/1991 on Wealth Tax, heirs inheriting shares in family businesses can qualify for a 95% or 99% reduction, as long as the business activity and employment levels are maintained for at least five years, and the heir does not transfer their ownership stake.
Rural property and agricultural estates: Andalusian regulations, in accordance with Law 5/2021 on Assigned Taxes, establish tax benefits for agricultural holdings that are maintained and professionally managed by the heirs for at least five years, as long as the heir qualifies as a professional farmer.
Assets of historical or cultural heritage: Assets declared as Cultural Interest (Bien de Interés Cultural – BIC) under Law 16/1985 on Spanish Historical Heritage may qualify for tax reductions if they are donated to public institutions or foundations, or if their preservation and public access are ensured.

Authora:

Rosana Tejada

-Malaga tax lawyer-

Tax advisors specializing in international taxation assist expatriates in navigating the Spanish tax system. With over 20 years of experience, I provide tailored tax plans to optimize tax efficiency, ensuring compliance with regulations and minimizing dual taxation.

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Implications for expatriates

Receiving an inheritance in Andalusia can be more complex for expatriates and non-residents because they must adhere to both Spanish tax laws and the requirements of their country of residence. This dual perspective makes it crucial to understand how the Andalucía Inheritance Tax is applied locally and its possible effects abroad.

A common mistake is assuming that the Andalusian allowance removes all obligations. However, the heir still needs to declare the inheritance in both countries and verify whether a double taxation agreement exists to prevent being taxed twice.

Proper international coordination is essential for preventing double taxation and ensuring heirs can take advantage of the reductions and allowances offered by the Andalucía succession tax. With careful planning, you can not only minimise the overall tax burden but also avoid unnecessary procedures and legal complications for your family.

Estate planning strategies

Planning ahead for the transfer of assets not only brings peace of mind but also allows you to take full advantage of the tax benefits under the Andalucía Inheritance Tax. A well-prepared succession strategy can reduce the tax burden, avoid family disputes, and ensure that assets are passed on according to the testator’s wishes.

In Andalusia, several legal and tax tools are available, including drafting a valid Spanish will, incorporating choice-of-law clauses, making lifetime gifts, or considering international structures such as trusts, which can be especially relevant for expatriates and non-residents.

This section outlines how these measures can be applied in practice to optimise inheritance management and minimise the impact of the Andalucía succession tax.

Importance of having a will

Having a will drafted in accordance with Spanish law (Civil Code, Articles 667 et seq.) speeds up the probate process, ensures the correct application of allowances, and helps avoid disputes between heirs. It is also essential to include a “choice of law” clause, allowing the testator to choose the law of their nationality. This means the estate can be distributed according to the laws of their country, avoiding restrictions under Spanish law, such as the legítima (the compulsory share reserved for direct heirs, including children, spouses, or parents).

Therefore, a will becomes a crucial tool in both tax and estate planning.

Trusts

Trusts can be a valuable instrument in succession planning, enabling the orderly transfer of assets and protecting family wealth. Although trusts are not specifically regulated under Spanish Civil Law, their structure should be carefully analysed with the assistance of a specialised lawyer to determine the tax implications in Spain and their compatibility with Laws 29/1987 and 5/2021. When properly integrated into an estate plan, trusts can improve tax efficiency and ensure assets are distributed according to the testator’s wishes.

Gifting assets during lifetime

In Andalusia, lifetime gifts between direct relatives also qualify for the 99% reduction (Decree-Law 1/2019 and Law 5/2021). These transfers are also subject to gift tax in Andalucía, making professional advice essential to ensure all exemptions are properly applied.

How Tejada Solicitors may help you with Inheritance Tax in Andalucia

Managing an inheritance in Andalusia can seem complex, especially for those living abroad or owning assets in several countries. However, thanks to recent reforms, the impact of the Andalucía Inheritance Tax has been significantly reduced, making the region one of the most favourable environments in Spain for the transfer of wealth.

Specialised advice is essential for applying allowances correctly, avoiding double taxation, and ensuring efficient estate planning. With the right guidance, a potentially complicated situation can become a straightforward, secure, and beneficial process for your family.

At Tejada Solicitors, we have a multidisciplinary team specialised in international inheritance, Andalusian tax law, and estate planning.

We can help you:

Correctly file the Andalucía Inheritance Tax.
Calculate and apply all available deductions and allowances.
Coordinate with the tax authorities in your country of residence to avoid double taxation.
Draft or review your will.
Design a tax strategy tailored to your family and financial profile.

In addition to inheritance and tax services, our firm also assists clients with conveyancing in Spain, property purchases, and cross-border ownership. Working with experienced Spanish property solicitors ensures your legal, tax, and real estate matters are handled with efficiency and full legal certainty.

Having an expert law firm by your side for the Andalusian succession tax guarantees peace of mind and clarity in one of life’s most sensitive moments: managing an inheritance.

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FAQ’s

Inheritance tax rates in Andalusia depend on the relationship between the heir and the deceased, as well as the value of the assets being inherited. Since the latest reforms, close relatives, such as spouses and children, benefit from generous exemptions and reductions that often eliminate or significantly reduce the tax burden. For moderate estates, the effective tax rate can be as low as zero.

Yes. Expats inheriting assets in Andalusia are subject to Spanish inheritance tax rules. EU and EEA citizens benefit from European regulations and rulings of the Court of Justice of the EU, which give them access to Andalusian regional reductions even if they are non-residents. For non-EU heirs, the application depends on international treaties and Spanish law, but in many cases, regional allowances are also recognised.

If the heir is a Spanish tax resident (and thus a resident of Andalusia), they must declare their worldwide inheritance, including assets located both in Spain and abroad.

If the heir is not a Spanish tax resident, they only need to declare assets and rights located in Spain, such as real estate, bank accounts, or investments in Spanish companies.

Yes. Andalusia provides substantial exemptions and reductions for spouses, children, and parents. In many cases, these benefits eliminate the taxable amount entirely, especially for inheritances of moderate value.

Effective planning strategies include making lifetime gifts (which also enjoy Andalusian reductions under Gift Tax), securing the appropriate residency status, structuring assets efficiently, protecting wealth through family companies, usufruct arrangements, or estate planning agreements where applicable, and international planning for estates with assets in multiple countries to prevent double taxation.

Seeking advice from a lawyer or tax expert specialising in international inheritance in Andalusia is essential to ensure legal compliance and maximise the available allowances.