1 September 2026 Written by Sam for Casa España Real Estates
Spanish inheritance tax 2026: non-EU heirs pay state tariff 7.65%-34% with no bonificación; EU heirs elect Andalusian 99% reduction on close-family gifts.
Three adult US-resident children inheriting a €1.2 million Marbella villa from their father in 2026 pay roughly €131,655 in Spanish inheritance tax. Three German-resident siblings inheriting the same property from the same father in the same year pay about €900. Same villa, same will, same Spanish tax authority €different passports, different continents, different bills by a factor of roughly 146. The cause is a single, mostly-invisible choice the heirs make on the Modelo 660: whether to apply the state tariff or elect the Andalusian regional regime with its 99% bonificación. Below: who pays what under each regime, why non-EU heirs pay the state tariff without reductions, the four tables that determine the bill, and the planning moves that compress the figure to a fraction before the taxman files a claim.
§ Why Non-EU Heirs Pay Roughly 146x More Than EU Heirs on the Same Inheritance
Spanish inheritance tax €the Impuesto sobre Sucesiones y Donaciones (ISD) €is one of the highest-impact taxes on a Marbella property portfolio, and the one most non-resident owners leave to their heirs unprepared. The regime is set by the heir, not the deceased: where the heir is tax resident determines which tariff applies, which reductions are available, and what the bill is. Non-EU non-resident heirs default to the state tariff (tarifa estatal, art. 21 Ley 29/1987) with no bonificación. EU and EEA resident heirs can make an irrevocable election at filing to apply the Andalusian regional regime, where close-family bequests qualify for a 99% reduction on amounts under the threshold. UK and Swiss heirs follow the same path as EU heirs through the Brexit transition rules and the Spain-Switzerland bilateral treaty. The Spanish-resident scenario pays almost nothing. The US-resident scenario on the same property pays six figures.
The legacy trap runs deeper than the tariff. Most Marbella property is bought by an individual €not a holding company €and held for ten to twenty years before the first inheritance event. By that point, the original buyer is often no longer Spanish resident, the heirs live on three continents, and the question of which Spanish regime applies has never been discussed with a Spanish tax adviser. The Modelo 660 arrives six months after the death with a number that can wipe out the entire net equity. The election option exists for EU heirs but only if claimed at filing time €silence means the default state tariff and no bonificación, regardless of the heir's later eligibility.
The State Tariff – Group Rates and Why Group II (Children) Caps at 12.75%
The state tariff is the schedule the Spanish national government sets for heirs who cannot €or do not €elect the regional regime. It is progressive and applied to each heir separately, against the share that heir receives. The schedule differs by Group, where the Group reflects the relationship between heir and deceased. Group I covers descendants under 21; Group II covers descendants 21 and over, spouses, and ascendants; Group III covers collaterals up to the third degree (siblings, nieces and nephews, aunts and uncles); Group IV covers everyone else, including strangers and fourth-degree collaterals. The marginal rates rise with the slab, and the top rate for Group II is 12.75% €lower than many readers expect €but the bonificación gap and the patrimonio preexistente multiplier are what make non-EU heirs pay dramatically more.
For non-EU non-resident heirs, the Group II allowance is €15,956. Anything above that is taxed through the progressive state tariff below. The top marginal rate for Group II is 12.75%, which sounds modest €until you remember there is no 99% bonificación, the patrimonio preexistente multiplier can add another 5%€25%, and a €400,000 inheritance produces roughly €43,885 in state tax per child before any plusvalía municipal.
Heads up: The patrimonio preexistente multiplier (art. 22 Ley 29/1987) is applied to the state tariff after the bracket calculation. It scales with the heir's preexisting wealth (1.0 below €402,678, up to 1.20 above €4,020,770) and is further multiplied by 1.05€1.15 for inheritance sizes above €390,000. On a €400,000 share, the typical inheritance-tier multiplier of 1.05 alone adds 5% to the bill. Heirs with significant pre-existing wealth can see the multiplier push effective rates to 15%€20% even though the headline top marginal is 12.75%.
§ The EU/EEA Election – Andalusian 99% Bonificación and How Heirs Trigger It
Heirs who are tax resident in an EU member state, Iceland, Liechtenstein, Norway, the UK (Brexit transition preserved the option), or Switzerland can make a one-time election at filing to apply the Andalusian regional regime to the Spanish inheritance, instead of the state tariff. The election is filed on the Modelo 660 itself, is irrevocable for that estate, and unlocks the same bonificación schedule available to Spanish-resident heirs: a 99% reduction on the tax due for spouses, descendants, and ascendants on the first €1,000,000 of the inherited share, plus a partial reduction above the threshold that scales down to roughly 75%€85% on the next €500,000. The effective rate for close-family EU heirs falls to under 0.1% of the taxable base.
The election has three practical requirements. First, the heir must be tax resident in an EU/EEA member state at the time of death, certified by a tax-residence certificate from that state's tax authority. Second, the election must be made on the Modelo 660 at filing €it cannot be applied retroactively, cannot be made after the filing deadline, and cannot be split between heirs in the same estate. Third, the elected regime applies only to Spanish inheritance tax; the heir's home-country inheritance tax treatment is unchanged and may generate a Spanish foreign-tax credit where a double-taxation treaty exists.
Heir Tax Residency (2026)
ISD Regime Applied
Bonificación Available
Effective Tax on €400K Group II Inheritance
Filing Action
Spain (resident)
Andalusian regional tariff
99% on first €1M (Group II)
~€300
Modelo 660, regional schedule
EU/EEA member state (elected)
Andalusian regional tariff
99% on first €1M (Group II)
~€300
Modelo 660, tick election box
EU/EEA member state (not elected)
State tariff
None
~€43,885
Modelo 660, default state tariff
UK / Switzerland (election preserved)
Andalusian regional tariff
99% on first €1M (Group II)
~€300
Modelo 660, tick election box
UAE / Saudi Arabia / Qatar / Bahrain / Kuwait
State tariff
None
~€43,885
Modelo 660, default state tariff
US / Canada / Mexico / Russia / China / Singapore
State tariff
None
~€43,885
Modelo 660, default state tariff
Differential: non-EU vs EU elected
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~146x on €400K share
Election must be ticked at filing €silence = state tariff
Action step: File the election on the Modelo 660 itself by ticking the box for application of the regional regime ( casilla applying regional rules). Attach the heir's tax-residence certificate from the EU/EEA member state, dated within 12 months of the death. If the election box is left blank, the Spanish tax authority defaults to the state tariff and no bonificación applies. The election cannot be added in a later amendment unless the original filing was within the six-month window and is being corrected before the assessment becomes final.
§ Worked Example €1.2M Marbella Villa, Three Heirs, Two Outcomes
A €1.2 million four-bedroom villa in Nueva Andalucía, bought in 2010 for €600,000 by a US-resident father (now deceased, 2026), is inherited in equal shares by three adult children. The father's will divides the estate in thirds, no Spanish will exists, the AEDRO will need to be obtained to confirm the heirs. Two scenarios: all three children are US-resident and have modest pre-existing wealth (under €402,678 each), or all three children are German-resident and qualify for the Andalusian bonificación. Same property, same will, same death year €same estate, different bills by €130,755.
Line Item
3 US-Resident Children (State Tariff)
3 German-Resident Children (EU/EEA Elected)
Inheritance share per child
€400,000
€400,000
Less Group II base allowance
€15,956
€15,956
Taxable base per child
€384,044
€384,044
Apply progressive tariff
€41,795 (state Group II, all brackets 7.65%€11.90%)
Plusvalía municipal (separate tax, ~1%€3% of cadastral appreciation)
~€9,000 (split 3 ways)
~€9,000 (split 3 ways)
Total bill to Spanish authorities
~€140,655
~€9,960
Effective rate on declared property value
11.7%
0.83%
Heads up: Plusvalía municipal (the Impuesto sobre el Incremento de Valor de los Terrenos de Naturaleza Urbana) is a SEPARATE municipal tax that also applies on inheritance. It is calculated on the cadastral-value increase over the holding period, not on the declared sale value, and is filed separately on the Modelo 650 within 30 business days of the death. Marbella plusvalía rates in 2026 sit between 8% and 30% of the cadastral appreciation, depending on how many years the property was held. Heirs frequently miss this filing because it is administered by the town hall, not the Agencia Tributaria, and the AEDRO process used to file the ISD does not automatically trigger the plusvalía notification.
Model 660 – The 6-Month Filing Window and the AEDRO Problem
The Modelo 660 is the form that registers the inheritance, calculates the tax, applies the election if any, and pays the bill. The filing deadline is six calendar months from the date of death €strict, with no automatic extension. A formal request for an additional six months can be filed before the original deadline lapses, but the request is discretionary and the Agencia Tributaria grants roughly 70% of extensions when justified by AEDRO delays, foreign-document apostille timing, or translator backlogs. The filing itself must be made by the heirs (or by a Spanish gestor acting under power of attorney); the deceased's last address in Spain determines which regional office receives the filing.
The AEDRO problem is the single largest practical pitfall for non-resident heirs of property owners who died without a Spanish will. AEDRO (Acta de Declaración de Herederos) is the notarial document that establishes who the heirs are when there is no will covering the Spanish estate. Foreign heirs must obtain a probate equivalent in their home country, apostille it (or legalise it under the 1961 Hague Convention), translate it to Spanish by a sworn translator, and present it before a Spanish notary who will issue the AEDRO. The process typically costs €1,500 – €4,000 in notary and gestor fees, runs two to six months, and frequently blows past the original six-month ISD filing deadline. Heirs who file the Modelo 660 after the deadline €without a granted extension €face a 5%€20% surcharge plus late-payment interest at Euribor + 3.25%.
Filing Step
Statutory Deadline (2026)
Penalty If Missed
Typical Cost
Common Pitfall
Modelo 660 (ISD self-assessment)
6 months from date of death
5%€20% surcharge + late interest (Euribor + 3.25%)
Gestor fee €600 – €1,500 + tax due
Foreign heirs miss the deadline while awaiting AEDRO
Extension request
Before original 6-month deadline lapses
Discretionary €granted ~70% of the time
No fee
Late request = automatic rejection
AEDRO (declaración de herederos, no Spanish will)
No statutory deadline but blocks ISD filing
N/A but blocks filing
€1,500 – €4,000 + apostilled foreign probate
6-month ISD filing may lapse before AEDRO completes
Modelo 650 (plusvalía municipal)
30 business days from death
5%€30% surcharge
Gestor fee €300 – €800 + tax due
Frequently missed €separate municipal filing
Spanish will probated (if exists)
N/A €used as filed
N/A
Included in original will execution
Older wills may not match current estate composition
Cadastral update for heirs
Within 2 months of Modelo 660 acceptance
No direct penalty but blocks future sale
Catastro fee €0 – €60
Forgotten €heirs sell without updating and face capital-gains issues
Cash reserve required at filing
100% of calculated tax due
Filing invalid if unpaid
Liquid funds in Spanish account
Non-EU heirs often lack a Spanish bank account at death
Action step: Three operational moves prevent the most common filing failures. First, the property owner should execute a Spanish will (testamento) covering at least the Spanish estate €cost €300 – €600 at a Marbella notary, completion in two visits, and it eliminates the AEDRO entirely because heirs are named directly. Second, the heirs should pre-arrange a Spanish bank account or an existing account with sufficient liquidity to pay the Modelo 660 + Modelo 650 + late-filing cushion. Third, retain a gestor who files the extension request immediately if the AEDRO is not yet complete by month four.
Five planning moves materially reduce the inheritance-tax exposure on a Marbella property portfolio. None eliminates the tax entirely for non-EU heirs, but applied together they routinely compress a €130,000 bill to a five-figure number. Each is a separate legal mechanism with its own costs, and each interacts with the others €owners should not stack them without coordinating through a Spanish tax adviser who has read the actual title deeds.
Planning checklist for non-resident Marbella property owners
Execute a Spanish will. A testamento at a Marbella notary names heirs directly, eliminates AEDRO, reduces probate to 2€4 weeks, and lets you designate which Spanish law governs (Spanish forced-heirship rules vs your home-country rules where the EU Succession Regulation permits).
Take out a life-insurance wrapper on the property. A Spanish-issued life insurance policy (or one written by a UK/US insurer with a Spanish paying agent) pays out a tax-free lump sum on death, designed to fund the Modelo 660. Premiums are NOT deductible against ISD, but the payout is excluded from the taxable estate under Spanish succession law.
Restructure as a Spanish-resident holding ONLY if you are Spanish-resident or can credibly relocate. Since the 2025 EU Court of Justice ruling against the Spanish holding-company carve-out (C-341/24), foreign holding companies receive no special ISD treatment €they are taxed under the same regime as direct individual ownership. Holding structures are no longer a planning tool for ISD.
Make annual lifetime gifts to EU-resident children. Gifts to children are taxed under the donor's ISD rules but at Group II rates, often with a €400K annual tax-free band where the recipient is Spanish-resident. The mechanism is irrelevant for US-resident recipients (who face US gift tax + Spanish ISD on donor) and partially useful for EU-resident recipients whose election to regional rules also unlocks the gift bonificación.
Coordinate with your home-country succession plan. The EU Succession Regulation (Brussels IV) lets you elect your home-country law to govern Spanish immovable property if your home country is an EU member state. This can override Spanish forced-heirship (legítima) rules and free the estate to pass by will as the deceased directs €provided the heirs are EU-resident and file the election at the same time as the Modelo 660.
Heads up: Forced heirship (legítima) applies only when Spanish succession law governs the estate €i.e., when the deceased was Spanish-resident at death, or when no election was made to apply another law. For a US-resident deceased owning Spanish property, Spanish law does NOT impose forced heirship on the Spanish estate, and the will can direct the property freely. For an EU-resident deceased, the EU Succession Regulation gives a one-time election to apply either Spanish law or the home-country law to Spanish immovable property €a choice that has lasting inheritance-tax consequences.
