In recent years, two significant developments have greatly benefited non-residents owning property in several autonomous regions of Spain.
A change in Spanish law, made in November 2014 on European Commission recommendations, ended years of tax discrimination against non-residents who inherited or donated property in Spain.
From this point onwards, non-residents living elsewhere in the EU have had equal tax status as residents.
In addition, the regional variances in Inheritance tax and donation tax in some autonomous areas have increased the tax allowances for those inheriting or receiving donated property.
The combined effect of these measures has dramatically reduced tax bills to the point where, in some cases, nothing is owed at all.
However, tax declarations should still be presented.
In Andalucia, from 1st January 2018, the asset threshold before close relatives with property in the region are required to pay tax was raised to one million euros from a previous ceiling of €250,000.
Tax between close relatives has also been virtually eliminated in Murcia, where a 99% reduction in the final tax quote to pay for both inheritance and donation tax has taken place. Both regions have followed the example set by the Valencian Community in this regard.
However, whilst these changes are clearly favourable, it is important to take advice in such matters as each case is different and the region and relationships between the parties must be considered when calculating Inheritance and donation tax.