Inheriting Property in Galicia: Taxes, Procedures and Complete Guide

Inheritance tax in Galicia

Inheritance and gift tax in Galicia is governed by Ley 14/2004, with subsequent reforms making Galicia one of Spain's most generous autonomous communities for inheritance tax. The Galician regulations establish the following discounts on the full tax quota:

Additionally, Galicia applies its own €150,000 reduction per Group II heir on the taxable base, cumulative with the state reduction of €15,956.57. This means that someone inheriting a €200,000 house from their parents would pay virtually no inheritance tax, as the taxable base would be reduced to zero or near-zero after applying both reductions and the 99% discount.

It is essential to understand that the 99% discount applies to the tax quota, not the taxable base. The complete calculation is: taxable base - reductions = liquidable base; liquidable base × tax rate = full quota; full quota × multiplier coefficient = quota; quota - 99% discount = amount to pay.

Tip: If you are a child, spouse or parent of the deceased, in Galicia you will pay virtually no inheritance tax. This makes Galicia one of the best places in Spain to receive a property inheritance.

Step-by-step procedures for accepting the inheritance

The inheritance acceptance process in Galicia follows a specific legal protocol that must be completed within established deadlines:

1. Certificate of last wishes (12-15 days, €3.73): Requested from the Ministry of Justice using the official form. This document indicates whether the deceased made a will and before which notary. If the death occurred in Galicia, it can also be processed through the Xunta in certain cases.
2. Certified copy of the will (€30-50): Request from the notary who authorized the will. If there is no will, an intestate declaration of heirs before a notary is required, which needs two witnesses who are not heirs. This procedure is for relatives up to the 4th degree (children, parents, siblings, nephews/nieces, uncles/aunts).
3. Insurance contracts certificate (12-15 days, €3.73): Request from the Ministry of Justice to check if life insurance existed. Life insurance is taxed as inheritance but has its own tax treatment depending on the designated beneficiary.
4. Complete asset inventory: Detailed list of all the deceased's assets with current market values: real estate (appraisal), bank accounts (balance at date of death), vehicles, investments, valuables, debts and charges. In Galicia, primary residences can benefit from additional reductions.
5. Acceptance of inheritance before notary: Two forms: pure and simple acceptance (heir is liable for debts with all their assets) or acceptance with benefit of inventory (only liable with inherited assets). The deed of acceptance and adjudication includes the distribution of assets among heirs according to the will or legal rules.
6. Payment of inheritance tax (Form 600): File with the Consellería de Facenda of the Xunta de Galicia within 6 months of death (extendable to 1 year if requested before the deadline expires). In Galicia, payment can be deferred up to 5 annual installments if the quota exceeds €30,050.61.
7. Payment of municipal plusvalía: Pay at the town hall where the inherited property is located. Deadline: 6 months from death. The amount depends on the cadastral value of the land and years of ownership. Galician municipalities apply specific coefficients.
8. Registration at the Land Registry: Present the adjudication deed at the Land Registry corresponding to the property's municipality. Cost: €200-400. Without this registration, the heir cannot sell, mortgage or perform any disposal act on the property.

Estimated costs of inheritance in Galicia

Acceptance with benefit of inventory

When the deceased had debts that might exceed the value of the inherited assets, acceptance with benefit of inventory is the recommended option. This legal mechanism limits the heir's liability to the value of the inherited assets, protecting their personal patrimony.

The procedure requires:

1. Request the formation of inventory before a notary or judge within 10 working days from when the heir becomes aware of their status
2. Prepare a complete and faithful inventory of the deceased's assets and debts
3. If debts exceed assets, the heir can repudiate the inheritance
4. If assets exceed debts, accept the inheritance limiting liability to the inventory

Important: Never accept an inheritance purely and simply without first checking the deceased's debts. If you accept purely, you will be liable with your own assets for the deceased's debts.

Special cases for foreigners

Foreigners inheriting properties in Galicia or anywhere in Spain face additional considerations:

• Double taxation treaties: Spain has signed treaties with over 90 countries to avoid double taxation on inheritances. The competent country depends on the type of asset: real estate is taxed where located (Spain), while money and securities are taxed in the deceased's country of residence. Key treaties include UK, Germany, France, Netherlands, USA and Switzerland.
• Mandatory NIE: Every foreign heir needs a Foreigner Identity Number (NIE) to process the inheritance. Apply at the immigration police station or Spanish consulate in your home country. Timeline: 1-3 weeks.
• Power of attorney: If the foreign heir cannot travel to Galicia, they can grant power of attorney to a local representative (lawyer or relative). The power must be legalized with a Hague Apostille and translated into Spanish by a sworn translator.
• Translation and apostille: All foreign documents (death certificate, certificates, powers) must be translated into Spanish by a sworn translator and apostilled under the Hague Convention.
• Spanish bank account: To pay taxes and expenses, it is advisable to open a Spanish bank account. Galician banks like Abanca or Banco Sabadell have specific departments for non-residents.

Distributing the inheritance among heirs

The distribution of real estate among multiple heirs requires special attention in Galicia:

• Proindiviso (undivided ownership): If multiple heirs share the property, each owns a quota. Decisions require majority consent. Any heir can request judicial division of common property if there is no agreement.
• Compensatory adjudication: If one heir keeps the entire property, they must financially compensate the others with their proportional share. This can be formalized in the acceptance deed itself.
• Joint sale: If all heirs agree to sell, the capital gain is distributed proportionally. Selling an inherited property is taxed in the IRPF as a capital gain (19-28%).
• Galician legitima (forced heirship): Galician law recognizes the legítima as the portion of assets that the testator cannot freely dispose of. In Galicia: legítima corta (1/4 of the estate for children equally) and legítima larga (1/3 if widowed with children of the deceased). The improvement can reach up to half.

Selling the inherited property

If you decide to sell the inherited property rather than keep it, consider these tax implications:

The capital gain is calculated as the difference between the sale price and the acquisition value, which in inheritances is the value declared in the inheritance tax return. If the property was the deceased's primary residence and the heirs decide to sell, they can apply the reinvestment exemption if they use the proceeds to buy another primary residence within 2 years.

Contact Cristina Casas Galiza for a free valuation of your inherited property on the Costa da Morte. We help you with the entire sales process.