Inheritance tax is one of those taxes that irritates property owners in just about every country we can think of. When governments promise to scrap inheritance tax, there is not surprisingly a roar of approval, at least from property owners.
There is good news on this score for Costa del Sol property owners and future buyers, as the autonomous community of Andalucía issued an announcement earlier this year stating that it would hugely reduce this tax, and that in some cases it would be zero.
It’s certainly good news for anyone owning or wishing to buy properties valued at over one million Euros. The Junta de Andalucía’s new inheritance tax law reduces the payment on estates valued at or above one million by 99%. And even better news for those homeowners with properties valued at below one million Euros – you will pay nothing! Yes, a zero inheritance tax rate.
This major change in taxation rules is the result of a long-running political campaign. But quite aside from political desires, the upshot is that it makes the property market on the Costa del Sol much more appealing to new buyers. It is especially important to the Marbella property market, where numerous properties are valued at over one million. Now that owners will only have to pay 1% inheritance tax on these properties, it is sure to encourage the overseas buyers, and it definitely makes Marbella more ‘overseas buyer-friendly’.
Of course, it is not just Marbella and the Costa del Sol that benefit from this new approach to inheritance tax: it applies to all of Andalucía, and means that the region has a distinct advantage over Spain’s other autonomous regions. Andalucía stands alone as an ‘inheritance tax-free’ region.
And just to be clear, in order to benefit, the person who inherits the property must be an EEA/EU resident. Heirs eligible to qualify include natural and adopted children of all ages, spouses, registered civil partners, parents, adoptive parents, grandparents and great grandparents.