Inheriting a Tourist Rental Property in Spain
July 2026
This article was developed with legal input from Salama Legal SLP, specialists in Spanish property tax and international taxation.
Inheriting a holiday rental in Spain means navigating three different legal areas at once: the succession law that determines who inherits, the Spanish Inheritance and Gift Tax that determines what is owed, and the regional tourism regulations that determine whether the property can keep operating as a rental.
For many non-resident families, these questions only come up after the death has occurred. The good news is that most of the process is very manageable once you know what to expect, and getting the right advice early can make a real difference – both to the Spanish inheritance tax bill and to how smoothly things run.
Which succession law applies: EU Regulation 650/2012
Since August 2015, succession across European Union countries has been governed by EU succession regulation 650 (Regulation 650/2012). As a general rule, the law of the deceased’s habitual residence at the time of death applies to the entire estate, including any property in Spain.
There is, however, a useful option available: the Regulation allows anyone to choose, in their will, that the law of their nationality should apply to their succession instead. This is a simple decision to make in advance and it can have significant practical consequences. It determines whether forced heirship rules apply (which exist under Spanish succession law but not, for example, in England and Wales), whether the surviving spouse takes priority, and how any disagreements between heirs are resolved.
For UK nationals inheriting property in Spain, choosing English (or Scottish, or Northern Irish) law in the will is often the most straightforward route. Despite Brexit, EU Regulation 650/2012 continues to apply when the Spanish authorities deal with the estate, including for UK nationals.
Where there is no will, or only a UK will that doesn’t mention the Spanish property, heirs usually face a longer process of establishing which law applies, gathering foreign documents, and having them translated, apostilled, and registered in Spain. Having a Spanish will in place takes care of all of this in advance.
Spanish Inheritance and Gift Tax: how the rate is calculated
Regardless of which succession law applies, the ISD (Impuesto sobre Sucesiones y Donaciones – Spanish Inheritance and Gift Tax) is owed by the heir on the acquisition of Spanish assets. This sits alongside any inheritance tax that may be due in the heir’s home country.
Understanding the full range of Spanish inheritance tax rates is important: the tax operates at state level but is adjusted by each autonomous community, and while the state scale starts at 7.65% and rises progressively to 34%, the effective rate also depends on:
- The relationship between the deceased and the heir. Direct descendants and spouses generally benefit from substantial reductions; more distant relatives and unrelated heirs typically face higher rates.
- The heir’s pre-existing wealth. Above certain thresholds, the tax can be multiplied by coefficients that reach as high as 2.4x for distant relatives with significant assets.
- The autonomous community where the property is located.
Looking at inheritance tax in Spain, Andalusia, Madrid, Murcia, the Canary Islands, and the Balearics are all in a category of their own, having introduced very generous bonifications that reduce the tax owed by direct family heirs by 95% to 99%. The same inheritance can produce a tax bill of a few hundred pounds in one region and tens of thousands in another, so this is well worth understanding early.
The autonomous community advantage & why non-residents can claim it
When it comes to Spain’s inheritance tax for non-residents, until 2014 they could only apply the national inheritance tax scale, while heirs living in Spain benefited from the (usually much more favourable) regional bonifications. The Court of Justice of the European Union ruled this discriminatory, and Spain updated its rules accordingly.
Today, non-resident heirs, whether living in the EU, the EEA, or further afield in countries such as the UK or the US, are entitled to apply the legislation of the autonomous community where the property is located, if doing so results in a lower tax bill.
Quite a few non-resident heirs still end up paying the higher national rate, often simply because this change wasn’t picked up by their adviser, or because the inheritance was handled quickly without a full review. Running figures through a Spanish inheritance tax calculator can quickly show whether the regional rate is better – and in many cases, tax already paid can be recovered by amending the original filing, as long as the four-year statute of limitations hasn’t passed. For estates filed between 2021 and 2025, it is often still possible to reclaim the difference.
Inheritance tax in the country of residence
One aspect that surprises many families dealing with property inheritance in Spain is that paying ISD in Spain doesn’t automatically exempt heirs from inheritance tax at home.
For UK residents, the same Spanish property may also be subject to UK Inheritance Tax at 40% above the nil-rate band, on top of the Spanish ISD already paid. The UK doesn’t have a comprehensive double taxation treaty with Spain on inheritance tax, but a unilateral credit is generally available for the Spanish tax paid, up to the amount of the UK tax that would otherwise be due on the same asset.
Other countries handle this differently. France and Sweden, for example, have specific inheritance tax treaties with Spain that set out which country has taxing rights more clearly. Most others, like the UK, use unilateral relief mechanisms.
The practical takeaway is that heirs should coordinate both filings carefully, keep a stamped copy of Spanish Form 650 and proof of payment, and submit these to their home country’s tax authority in good time. Filing the Spanish return late, or undervaluing the property there, can reduce the credit available at home and increase the overall amount paid.
Transferring the tourist licence to the heirs
When handling a tourist rental licence in Spain, heirs quickly discover one area where this type of property differs from most other inherited assets: the licence does not automatically transfer to the heirs.
Each autonomous community has its own rules. In Andalusia, heirs need to update the licence record with the tourism authority within a set period after the inheritance is accepted, providing the deed of acceptance and proof of ownership. In the Valencian Community, a similar change of ownership process applies. In Catalonia, the Balearics, and the Canary Islands, the rules tend to be stricter, and the licence can be at risk if the procedure isn’t completed on time.
Until the tourist licence is formally transferred to the new owner, the property can’t legally be listed as a tourist rental. Booking platforms, which now report income directly to the Spanish Tax Agency under the DAC7 framework, may also hold back listings or funds if the name on the licence doesn’t match the current owner.
It’s worth treating the licence transfer as a priority alongside the tax filing and deed registration, so that the property can get back to generating rental income as quickly as possible.
Practical steps and documents you’ll need
A smooth inheritance of a Spanish tourist rental typically involves the following:
- A Spanish or foreign will, along with a certificate of last wishes (Certificado de Actos de Última Voluntad) confirming the will is valid and was the most recent one.
- A death certificate, apostilled and translated if issued abroad.
- The NIE number for each heir (a Spanish identification number required by both the Tax Agency and the Property Registry).
- A full inventory of Spanish assets and liabilities at the date of death, including bank accounts, vehicles, and any outstanding mortgages.
- Filing Form 650 (Inheritance Tax) within six months of the death, with an optional six-month extension that can be requested within the first five months.
- Acceptance of the inheritance before a Spanish notary, followed by registration at the Property Registry and at the regional tourism authority.
The six-month deadline is the one families most often miss. Asking for the extension is free and straightforward, but it does need to be requested within the first five months.
Planning ahead: the will, the NIE and the asset list
For anyone inheriting property abroad, particularly a tourist rental in Spain, the most helpful thing the previous owner can do is prepare three things in advance: a Spanish will that specifically covers the Spanish property, a list of all Spanish assets with their reference numbers (the owner’s NIE, the property’s cadastral reference, the IBAN of any Spanish bank accounts), and copies of the most recent IRNR filings.
A Spanish will for property costs less than £100 to prepare before a notary, and it can be coordinated with a foreign will to make sure the two don’t conflict. The asset list takes an afternoon and saves heirs weeks of detective work at a stressful time. And having up-to-date IRNR filings means heirs receive the property with a clean tax record, rather than having to deal with unfiled obligations that emerge during the process.
With these in place, many inheritances can be wrapped up in a matter of weeks. Without them, the process tends to take six to twelve months, sometimes longer.
Getting the most from the inheritance
For families who are considering buying property in Spain to rent out, or who already have a tourist rental as part of an estate, the best results come from a bit of preparation and the right sequencing: sorting the planning before it’s needed, filing the inheritance on time, claiming the autonomous community advantage where it applies, transferring the licence before it lapses, and getting the property back to earning rental income as soon as possible.
With a holiday home inheritance, each of these steps is very manageable on its own. Taken together, they make a meaningful difference to the tax outcome and how quickly the inheritance reaches a clean conclusion.
This article was developed using legal inputs from Salama Legal SLP, a legal firm specialising in tourist rental licences, international taxation and cross-border inheritance for property owners in Spain.