Inherited a property in Spain? Here's what you need to do next if you live in Belgium

The first steps after an inheritance

When a property in Spain forms part of an estate, several administrative formalities must first be completed before ownership can officially be transferred to the heir or heirs.

An international estate generally requires more preparation than one that is dealt with entirely in Belgium. To settle an inheritance involving property in Spain, a number of documents will usually need to be submitted, including:

• the death certificate;
• a valid identity card or passport;
• the will or a declaration of heirs;
• documents confirming who the legal heirs are.

Depending on the circumstances, additional documents may be required. In certain cases, official foreign documents must also be provided with an apostille and, where necessary, a sworn translation into Spanish.

The exact documentation required varies from one case to another. It is therefore advisable to check in advance which documents are needed for your specific situation. Completing these formalities in good time will help avoid unnecessary delays or complications later in the process.

Do you need a NIE number?

If you are a Belgian resident and inherit a property in Spain without already having a NIE number, obtaining one will, in practice, usually be one of the first administrative steps.

The Número de Identificación de Extranjero (NIE) is the personal identification number for foreign nationals carrying out administrative or tax-related procedures in Spain.

It is required for, among other things:

• settling the estate;
• registering the property;
• meeting tax obligations;
• various administrative procedures.

If you do not yet have a NIE number, it is advisable to arrange this as early as possible. Doing so will help prevent unnecessary delays during the remainder of the inheritance process.

Read our blog about obtaining a NIE number in Spain.

The estate must be settled correctly

Before a property can officially be registered in the name of the heir or heirs, it must first be established who is entitled to which rights in relation to the property.

Where a Spanish property forms part of an estate, the notary generally plays a central role. Particularly where there is more than one heir, the allocation and distribution of the property is normally recorded in a notarial deed of inheritance.

There are exceptions in certain straightforward situations, but in practice the transfer of inherited property in Spain is usually handled in this way.

Only once these formalities have been completed can the property be properly registered.

Take Spanish inheritance tax into account

If you inherit a property in Spain, Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones) may be payable.

The final amount of tax depends on several factors, including:

• the autonomous region where the property is located;
• your relationship to the deceased;
• the value of the estate;
• any regional allowances or tax reliefs that may apply.

One important point to bear in mind is the deadline. The Spanish inheritance tax return must, in principle, be submitted within six months of the date of death. Under certain circumstances, an extension may be requested within the legal time limit.

In addition to Spanish inheritance tax, Belgian inheritance tax may also be payable, depending on your personal circumstances. Which taxes ultimately apply depends, amongst other things, on the deceased's country of residence, the location of the property and the specific circumstances of the estate.

As the calculation of inheritance tax differs considerably from one situation to another, we do not cover it in detail in this article. Nevertheless, it is important not to overlook this step, as submitting the tax return late may result in additional costs or interest.

Read more in our blog about inheritance tax in Spain.

Don't overlook the plusvalía municipal

In addition to Spanish inheritance tax, the plusvalía municipal may also apply. This is a municipal tax relating to the increase in the value of the land on which the property is built and is entirely separate from inheritance tax.

Whether this tax is payable, and how it is calculated, depends on several factors, including the municipality in which the property is located and the specific circumstances of the estate. As the rules may vary from one municipality to another, it is advisable to have this checked in good time.

Ensure the property is properly registered

Once the estate has been settled, the property must also be officially registered in the name of the new owner or owners.

It is important to understand the difference between two Spanish registers.

The Registro de la Propiedad is the official Land Registry in which legal ownership of a property, together with any registered rights or charges affecting it, is recorded.

There is also the Catastro, which mainly contains administrative and cadastral information relating to the property.

Many people assume these two registers are the same, but they are not. Particularly if you intend to sell the property in the future, it is important that the legal and administrative records correspond correctly.

Inspect the property itself as well

Inheriting a property brings not only rights, but also responsibilities.

It is therefore advisable to check as soon as possible whether there are:

• any mortgages or other registered charges on the property;
• outstanding municipal taxes;
• unpaid community fees;
• existing insurance policies;
• active contracts for water, electricity, internet or other utilities.

It is equally important to review any direct debit payments. This helps ensure that essential payments continue uninterrupted and prevents unexpected costs from coming to light at a later stage.

This is also a good opportunity to assess the general condition of the property. If you are considering selling it in the future, an initial technical and administrative review can provide valuable insights.

Don't forget the annual obligations in Spain

Even after the estate has been fully settled, a number of obligations remain as the owner of a property in Spain.

Depending on the property and your personal circumstances, these may include:

• the annual property tax (IBI);
• the municipal refuse collection tax;
• community owners' association fees;
• tax obligations for non-residents (Modelo 210).

The latter is often overlooked. Even if you are a Belgian resident who owns a property in Spain solely for personal use and does not let it, certain annual Spanish tax obligations may still apply.

Read our detailed blog about Modelo 210 for non-residents.

If you later decide to rent out the property, different tax rules and administrative obligations will apply. It is therefore advisable to check which regulations are relevant to your specific circumstances.

Do you also need to declare the inherited property in Belgium?

Yes. If you are a Belgian tax resident and become the owner of a property in Spain, you must also declare this property to the Belgian tax authorities. This does not happen automatically simply because the estate has been settled in Spain.

Anyone acquiring property abroad must notify the Belgian Federal Public Service Finance (FPS Finance) so that a Belgian cadastral income can be assigned to the property.

Today, this is generally done through MyMinfin. You will be asked to provide information about the property and how ownership was acquired. Based on this information, the Belgian authorities assign a Belgian cadastral income to the property.

Where there is more than one heir, each Belgian taxpayer must correctly declare their respective share of the property.

What does this mean for your Belgian income tax return?

The property must also be correctly included in your annual Belgian income tax return. Fortunately, this does not automatically mean you will pay tax on the same property in both Spain and Belgium. Belgium and Spain have concluded a double taxation treaty, which helps prevent double taxation in many situations.

Nevertheless, it remains important to declare the property correctly. The Belgian tax authorities use the assigned Belgian cadastral income for this purpose. Put simply, this means that Belgium does not necessarily tax the Spanish property in the same way as Spain, but, depending on your circumstances, it may take it into account when determining the tax rate applicable to certain other sources of income.

The date on which you become the owner is also relevant. For example, if you inherit the property during the course of the calendar year, your Belgian tax return will take into account the period during which you were actually the owner.

If you are unsure how to declare the property correctly in your tax return, it is advisable to seek advice from a tax adviser or accountant with experience in international property matters.

What if there is more than one heir?

It is quite common for a property in Spain to be inherited by more than one family member.

For example:

• two children who each inherit a 50% share of the property;
• several brothers or sisters;
• the surviving spouse together with the children.

In such cases, it is important to establish clearly who owns which share of the property.

The administrative and tax obligations must also be dealt with correctly. Each heir will need to declare their share wherever this is legally required.

In addition to the administrative aspects, it is advisable to make practical arrangements as well. Will the property be kept as a second home? Will it be rented out? Or do one or more of the heirs wish to sell it?

The sooner clear agreements are made, the smaller the risk of disagreements or delays at a later stage.

Are you considering selling the inherited property?

For many heirs, this ultimately becomes the most important question.

You may live permanently in Belgium, make little use of the property, or have inherited it together with other family members. In these situations, selling the property is often the preferred option.

However, it is advisable not to put the property on the market before first checking that everything has been properly dealt with from an administrative point of view.

A property can only be sold smoothly once it is clear:

• who the legal owner or co-owner is;
• that the estate has been properly settled;
• that the property has been correctly registered;
• that all the necessary documentation is available.

Missing documents, outstanding taxes or discrepancies in the registration can cause unnecessary delays during the sales process.

A professional valuation is equally important. Many heirs are unfamiliar with the Spanish property market. Furthermore, the value of a property is determined by much more than its floor area alone. Its location, views, orientation, condition, legal status and local market demand all play a significant role.

A professional valuation therefore provides a far more realistic picture than relying on the original purchase price or comparing it with similar properties in the area. This allows you to approach a potential sale with realistic expectations and avoid unpleasant surprises.

Also take capital gains tax into account if you decide to sell

If you decide to sell the inherited property at a later date, it is important to consider the potential capital gains tax payable in Spain. For Belgian and Dutch owners who are not tax residents in Spain, this is generally 19% of the taxable capital gain.

The calculation of this tax depends on several factors, including the property's tax acquisition value – in the case of an inheritance, this is generally the value used for inheritance tax purposes – the final selling price and the applicable tax legislation. The outcome may also vary depending on your personal circumstances.

As the rules governing capital gains tax can be complex, it is advisable to check the tax implications of a sale beforehand. Doing so will help prevent unexpected surprises later on.