Finally we have good news for those who have or will have to submit inheritance tax in Andalusia. The changes came in two sets of laws. First one in August 2016 and second in January 2017. Basically, these changes benefit bigger estates more than before by increasing the exemption for your main home and also increasing the threshold where you start paying.
Explaining it on not too much in detail, it means that you can get an exemption from 100% to a minimum of 95% in your main home. The exemption of 95% is when the house value is more than 242.000€ . And the good news is that this is per heir, which will reduce considerably the number of payers.
As an example if you and your brother inherit a property of 600.000€, you will get an exemption of 95% which means that you add to the estate to calculate the tax just 5% of the value (15.000€ each)
To benefit from the above you must be one of the following:
· Surviving spouse.
· Descendants (natural or adoptive children, grandchildren).
· Ascendants (parents, grandparents).
· Exemption also applies where the beneficiary is a more distant relative over the age of 65 and lived the previous two years with the deceased.
The above only applies if beneficiaries do not sell the property within the following three years from the death, this period was 5 years before the new laws.
The second change is That the Nil rate band has increased. The inheritance tax-free allowance has increased to €250,000 per inheritor. Before it was in 175.000€. And in relation to this, another change has been introduced on inheriting estates up to €350,000, there is now a blanket allowance in the first €200,000. Eg. inheriting say €275,000, the first €200,000 are exempt. You would only pay Inheritance tax on the remaining 75k.
This is a welcome respite as before you had to pay the full IHT on any excess over the threshold.
Remember that you have 6 months from the date of the decease to get the process under way. And that it Is not just submitting the Inheritance Tax, the heirs will need to get NIE´s and sign the deed before a notary.
Succession in Spain is a complex matter, Salvador Tax&Legal can help you throughout the inheritance process. We are experts in Taxes and legal matters which will make things easier for you. More info: