A) EQUITY
Without going into the details of the inheritance law regulated in the Civil Code in Book III, we are interested in what happens when property is inherited in Spain.
First of all, a distinction must be made between the division and the acceptance of an inheritance:
– ACCEPTING AN INHERITANCE is a free and voluntary act by which a person called to inheritance expresses his or her willingness to accept an inheritance.
– THE CONCESSION OF AN INHERITANCE is the act by which the heirs who have accepted the inheritance divide the property acquiring its ownership.
If the matter is clear and easy to distribute, the corresponding taxes are settled in Spain and the changes are made at the land registry of a property.
B) SALE OF A PROPERTY WITH CO-OWNERSHIP
If an indivisible property is inherited among several heirs, it is not uncommon for conflicts to arise in the division of property.
In case there is money or other assets, compensation could be sought for the transfer of the property. Otherwise, in order to sell a property with multiple owners, the consent of all is required, otherwise the sale is valid.
Therefore, a property cannot be sold if one of the heirs does not agree with it.
If co-ownership of the property cannot be avoided and one of the heirs wants to sell the property, he or she can do the following:
– Sell their share of the property to the remaining heirs or to third parties. The other heirs have a privilege to this undivided share by paying the sale price. If you would like more information on the subject, we will present it to you in another article on the right of first refusal.
– All heirs agree that a mediator may be consulted prior to the judicial process to find a solution suitable for all interests.
– If the heirs do not agree, the judicial process is at the end and the extinction of the co-ownership of the inheritance and the public auction of the property can be requested in accordance with Law 15/2015. An appraisal of the property is requested and then it is auctioned.
The other co-owners can participate in the auction to bid for it. The disadvantage is that if the property is auctioned together, the hammer price may be below the market price.
In summary, it can be said that in these succession cases an agreement is always made between the heirs in order to avoid bad moments and costs (lawyer, appraiser, judicial procedures,…). In addition, it should be noted that the sale of a property through public auctions is usually at a lower price than it would be sold on the market.
C) INHERITANCES OF NON-RESIDENTS IN SPAIN
If a property is inherited in Spain and the estate is non-resident in Spain, these inheritances are regulated by the European Regulation 650/2012 on inheritances and the creation of the European Certificate of Succession. A non-resident foreigner who inherits a property in Spain should be aware that he/she will have to pay inheritance tax in Spain and local capital gains tax. Please note that you are only taxed on property in Spain, not on foreign products.
Applicable regulations vary depending on where you live:
– Residents within the European Union: The rules of the Autonomous Community in which the deceased has more assets apply.
– Residents of other countries: the applicable regulations are those of the State.
For more information, our lawyers at I-VEO can advise you in the management of your inheritance.
