Inheritance Planning for Spanish Property in 2026: Wills, the Andalucia 99% Bonificacion, Donations and Usufruct Strategies

A decision framework for non-resident owners of Costa del Sol property: whether to make a Spanish will, how the Andalucia 99% inheritance tax bonificacion works, the Ley 8/2025 donation reforms, the usufruct strategy that splits ownership to cut the taxable base, and the joint-ownership risk that catches foreign buyers off guard.

Inheritance planning for a Spanish property is not a single act but a sequence of decisions made years before death: how you hold the asset, whether you make a Spanish will, which law governs your succession, and whether you transfer during your lifetime or on death. For property in Andalucia, the tax picture is far gentler than most foreign owners fear. Since 11 April 2019, the region applies a 99% bonificacion on the inheritance tax cuota for direct family heirs (Decreto-ley 1/2019, consolidated in Ley 5/2021), and non-residents access the same relief as residents after the CJEU’s 2014 Welte ruling. The Ley 8/2025 reform (effective 1 January 2026) further simplified the inter vivos donation bonificacion, reducing formalisation costs for smaller gifts. The decisions that matter most are structural, not fiscal, and they are best made at the point of purchase, not in the six months after a death.

Why does inheritance planning for Spanish property start at purchase?

The ownership structure you choose when you buy determines how the property passes on death. A sole owner’s entire property enters their estate. Joint owners under Spanish copropiedad (Codigo Civil articles 392 to 406) each hold an abstract, undivided share, so only the deceased’s quota enters the estate, not the whole asset. A property held through a Spanish SL company passes via share transfer, not a real-estate inheritance, which can simplify the cross-border mechanics but introduces corporate tax during life. Each route has different tax, probate and control consequences, and unwinding a structure after death is harder and costlier than choosing the right one at the notary’s desk.

The key planning question is whether your ownership structure matches your succession wishes. Many foreign couples buy jointly assuming the survivor automatically inherits the whole property, as in a UK tenancy by survivorship. Spanish law has no equivalent of joint tenancy with right of survivorship. On the death of one co-owner, the deceased’s share passes to their heirs under the will or intestacy rules, not to the surviving co-owner. If no Spanish will exists, the heirs must obtain a foreign grant of probate, translate and apostille it, and present it to a Spanish notary before they can register the transfer, a process that can take months. For a full treatment of co-ownership mechanics, see our joint ownership guide.

Should you make a Spanish will for your Costa del Sol property?

A Spanish will limited to your Spanish assets is the single most effective inheritance planning step. It lets your heirs probate the property in Spain immediately, in parallel with the home-country process, without waiting for a foreign grant to be translated, legalised and apostilled. Every Spanish notarial will is automatically recorded in the Registro General de Actos de Ultima Voluntad, so your heirs can request a certificate to discover whether a will exists and which notary holds it. A testamento abierto before a Spanish notary costs from EUR 30.05 in base notarial fees under Real Decreto 1426/1989, with the practical total typically between EUR 40 and EUR 90 plus 21% IVA. For a step-by-step walkthrough, see our Spanish will guide.

For EU nationals, EU Regulation 650/2012 (Brussels IV), in force since 17 August 2015, adds a powerful tool. Article 22 lets you elect the law of your nationality to govern your entire succession (a professio iuris). This can override Spanish forced heirship rules, which under articles 805 and 808 of the Codigo Civil reserve two-thirds of the estate for children (the legitima). Without the election, the default rule applies the law of your habitual residence at death, which for a Spanish resident means Spanish forced heirship. UK nationals lost the ability to make a professio iuris after Brexit, so Spanish law applies by default to UK nationals habitually resident in Spain. For a deeper treatment of the legitima and how much of your estate you actually control, see our forced heirs guide.

How does the Andalucia 99% inheritance tax bonificacion work?

The bonificacion is a regional relief on the ISD cuota (the tax payable after the progressive tariff is applied to the taxable base). It covers heirs and legatees in Groups I and II under article 20 of the state ISD law (Ley 29/1987): descendants under 21 (Group I), and descendants aged 21 and over, the spouse, ascendants and adoptants (Group II). Registered parejas de hecho in Andalucia are assimilated to spouses. The relief is 99% of the cuota, so the effective tax is roughly 1% of the taxable base after reductions.

For deaths on or after 1 January 2022, Group I and II heirs also receive a EUR 1,000,000 reduction on the taxable base before the tariff is applied, which means most family inheritances fall below the threshold entirely. The kinship multiplier is fixed at 1.0 for Groups I and II since 1 January 2022 under article 38 of Ley 5/2021, replacing the old wealth-based sliding scale. Group III (siblings, nephews, nieces) multiplies by 1.5 and Group IV (non-relatives) by 1.9, and neither qualifies for the 99% bonificacion.

Non-residents access the same Andalucia relief as residents. The CJEU’s 2014 Welte ruling (Case C-127/12) held that Spain’s unequal treatment of non-residents breached EU free-movement of capital. Spain responded with Ley 26/2014, letting non-residents apply the regional legislation where the connection point (the location of the inherited assets) points to a particular autonomous community. The Spanish Supreme Court later extended the principle to non-EU heirs, so a non-resident child in the UK, US or Norway inheriting an Andalucia property now applies the same 99% bonificacion as a resident child.

A non-resident child inheriting a EUR 500,000 Marbella apartment typically owes under EUR 1,000 in tax, not the five-figure bill the state tariff alone would produce. The detailed calculation, including the four-stage process (reduction, tariff, multiplier, bonificacion), is covered in our dedicated inheritance tax guide.

How did Ley 8/2025 change the donation bonificacion in 2026?

Ley 8/2025, the Andalucia budget law published in the BOJA on 31 December 2025, reformed the inter vivos donation bonificacion with effect from 1 January 2026. The changes simplify the formal requirements and reduce the cost of formalising smaller gifts, while keeping the 99% relief intact for Group I and II donees.

The three key changes are:

Change	Before Ley 8/2025	From 1 January 2026
Public deed threshold	Public deed required for all inter vivos gifts formalised in a public deed	Public deed only required when the taxable base exceeds EUR 5,000
Cash donation deadline	Delivery and deed formalisation simultaneous	Public deed must be formalised within one month of delivery (for bases above EUR 5,000)
Instalment donations	Unclear whether separate deeds were needed	Single escritura publica covering all planned transfers, with delivery satisfied at first instalment

The reform also clarified that the bonificacion applies only to the portion of the cuota corresponding to assets declared spontaneously, without prior demand from the tax authority. For cash donations, the origin of funds must still be justified and declared in the public deed. For non-property assets that do not require a public deed for their transfer (such as movable goods below EUR 5,000), the aggregation rule now counts all gratuitous inter vivos transfers from the same donor to the same donee in the preceding three years, excluding only assets that legally require a public deed.

One further change affects usufruct successions. When a usufruct previously created through a donation is extinguished by the death of the usufructuary, the deadline for filing the autoliquidacion for the consolidation of full ownership (pleno dominio) is now six months from the day after the usufructuary’s death, extended from the previous two-month general deadline for donations. This aligns the consolidation filing with the standard mortis causa deadline.

An inter vivos donation of Andalucia property triggers Modelo 651 within 30 business days (the state deadline on the AEAT non-resident filing page), and the 99% inter vivos bonificacion under Article 40 of Ley 5/2021 (as amended by Ley 8/2025) applies to Group I and II donees. For the full donation procedure and tax mechanics, see our property donation guide.

Is donating your property during your lifetime a better plan?

An inter vivos donation is the main alternative to leaving the property on death. Both routes benefit from a 99% bonificacion for Group I and II recipients, but through separate provisions: the mortis causa bonificacion (Decreto-ley 1/2019, consolidated in Ley 5/2021) for inheritance, and the inter vivos bonificacion (Article 40 of Ley 5/2021, as amended by Ley 8/2025) for donations. A donation must be formalised in a public deed (escritura publica) before a Spanish notary when the taxable base exceeds EUR 5,000, and the donee files Modelo 651 within 30 business days of the deed. Cash gifts above EUR 5,000 must be formalised within one month of delivery, with the origin of funds declared in the deed.

The decision between donation and inheritance turns on control and timing, not tax rate. A donation transfers the asset immediately: you lose the right to use, sell or mortgage the property, and the donee acquires full ownership. An inheritance preserves your control during life and transfers the property only on death, but it requires heirs to navigate the probate process. For a parent who wants to pass a holiday home to children while still using it, leaving it on death is usually the better route. For an owner who wants to transfer now to help a child onto the property ladder, a donation may suit.

One important nuance: the donation filing deadline for Andalucia residents is two months from 1 January 2022 under Ley 5/2021, while the AEAT non-resident page states the state deadline of 30 business days. Non-resident donees should confirm the applicable deadline with their tax representative, as the regional and state deadlines can diverge. Donations also trigger other tax considerations beyond ISD: the donee may face future capital gains tax based on the donor’s acquisition value (not the donation value) when they eventually sell, and a donation can affect the donor’s wealth tax position. Speak to a Spanish tax advisor (asesor fiscal) before gifting.

Can a usufruct strategy reduce the inheritance tax base?

A usufruct strategy is the most underused planning tool for non-resident owners. It splits the property into a life usufruct (usufructo vitalicio) retained by the owner and bare ownership (nuda propiedad) transferred to the heirs, either during life or on death. The tax advantage comes from the ISD valuation rules: the bare owner’s acquisition is valued under the age-based reduction scale in Codigo Civil Article 83, not at full market value.

The Article 83 formula values a life usufruct at 70 per cent of the full property value minus 1 per cent per year the usufructuary is under 70 (capped at 89 per cent for a usufructuary under 20 and floored at 10 per cent for one over 79). A usufructuary aged 70 produces a usufruct value of 70 per cent, leaving the bare ownership at 30 per cent. A usufructuary aged 80 produces a usufruct value of 60 per cent, leaving the bare ownership at 40 per cent. The older the usufructuary at the time of transfer, the higher the bare ownership value, but the lower the lifetime use retained.

The practical effect for a EUR 500,000 Marbella apartment: if a parent aged 70 retains the usufruct and transfers bare ownership to a child, the child’s taxable acquisition is roughly EUR 150,000 (30 per cent), not EUR 500,000. After the EUR 1,000,000 Group I/II reduction, the taxable base is zero, and after the 99% bonificacion the cuota is negligible. The parent keeps the right to live in or rent the property for life. On the parent’s death, the usufruct extinguishes and the child consolidates full ownership with no further ISD (the consolidation is a consequence of the prior transfer, not a new taxable event for ISD purposes, though it may trigger plusvalia municipal).

This strategy is powerful but requires careful drafting. The usufruct must be constituted in a public deed, and the retention of use must be genuine, not a sham. For the full mechanics of usufruct valuation, termination and the consolidation of pleno dominio, see our usufruct and bare ownership guide.

What is the joint-ownership risk for non-resident couples?

Joint ownership (proindiviso) under Codigo Civil articles 392 to 406 is the default structure for couples buying together in Spain. Each co-owner holds an abstract share of an undivided whole, with quotas presumed equal unless the deed states otherwise. The risk is that Spanish law has no survivorship mechanism. When one co-owner dies, their share does not automatically pass to the survivor. It enters the deceased’s estate and passes to their heirs under the will or intestacy rules.

If a married couple owns a Marbella apartment 50/50 and one spouse dies without a Spanish will, the deceased’s 50% share passes under the home-country intestacy rules. In England and Wales, that typically means the surviving spouse inherits, but they must still obtain a UK grant of probate, translate and apostille it, and present it to a Spanish notary before they can register the transfer. If the deceased has children from a previous relationship, the share may pass to them, leaving the surviving spouse as a co-owner with stepchildren.

The mitigation is straightforward: make a Spanish will. A will limited to the Spanish assets directs the deceased’s share to the surviving spouse (or any chosen heir), and the notary can proceed without waiting for a foreign grant. For EU nationals, the professio iuris under Article 22 of EU Regulation 650/2012 can override Spanish forced heirship to give the surviving spouse the whole estate.

What is the Spanish inheritance process for non-residents?

The process has four stages: establishing the right to inherit, accepting the inheritance before a notary, filing the tax return (Modelo 650), and partitioning the estate. There is no court-supervised grant of probate in the English sense. The heirs drive the process through a notary, who authenticates the acceptance and the partition. The tax filing is a self-assessment, not a tax authority assessment.

The six-month Modelo 650 deadline runs from the date of death, with a possible six-month extension requested within the first five months. Non-residents file with the National Tax Management Office for Non-Residents in Madrid. Non-EU heirs must appoint a Spanish tax representative. The entire process can be handled from abroad through a power of attorney granted at a Spanish consulate, apostilled, and authorising a lawyer to act on the heir’s behalf. Acceptance comes in two forms: pure and simple (pura y simple), which mixes the estate with your own assets, or a beneficio de inventario, which limits liability to the estate’s value. The latter is the prudent choice when the estate may carry debts.

For a full walkthrough of the acceptance, filing and partition stages, see our non-resident inheritance process guide.

Should you hold the property through a company instead?

A Spanish SL (sociedad limitada) holding structure transfers the property via share transfer on death, not a real-estate inheritance. The shares pass under the shareholder’s will or intestacy rules, and the property itself remains owned by the company, so no Spanish notarial inheritance deed is needed for the real estate. This can simplify cross-border estates where the owner’s home country recognises share transfers more readily than Spanish real-estate transfers.

The trade-off is corporate tax during life. The SL pays corporation tax (Impuesto sobre Sociedades) on any rental income, and the owner faces transfer tax (ITP or IVA) when the property is first transferred into the company. The simplified governance rules for companies with capital below EUR 3,000 (under Ley 18/2022) reduce administrative burden, but a company structure is only worthwhile for owners with a clear tax-planning reason, such as multiple properties, rental income or complex succession planning across jurisdictions. For most single-property owners, direct ownership with a Spanish will is simpler and cheaper.

Inheritance planning checklist for non-resident owners

Step	Action	Why it matters
1	Make a Spanish will limited to your Spanish assets	Lets heirs probate in Spain without a foreign grant; costs from EUR 40 to EUR 90 plus IVA
2	If EU national, include a professio iuris electing your national law	Overrides Spanish forced heirship under Article 22 of EU Regulation 650/2012
3	Check your ownership structure matches your succession wishes	Joint ownership (proindiviso) does not give survivorship; the deceased’s share enters the estate
4	Consider a usufruct strategy to split ownership during life	Bare ownership valued under the CC Art 83 age scale, not market value; 99% bonificacion then applies
5	Keep the property tax-compliant during life	Non-resident Modelo 210 and wealth tax filings must be current to avoid complicating the estate
6	Confirm your heirs know the six-month Modelo 650 deadline	Late filing risks surcharges and interest; extension must be requested within five months
7	If non-EU, appoint a fiscal representative for your heirs	Non-EU heirs must appoint a Spanish tax representative to file Modelo 650
8	If donating, check the Ley 8/2025 EUR 5,000 public-deed threshold	From 1 January 2026, no public deed needed for gifts below EUR 5,000; cash gifts above EUR 5,000 must be formalised within one month

Decision matrix: will, donation, usufruct, joint ownership, company

Structure	Tax on transfer	Control during life	Probate complexity	Best for
Will only (sole ownership)	99% bonificacion, Grupo I/II	Full control until death	Moderate: heirs file Modelo 650 within six months	Most single-property owners
Will plus donation	99% inter vivos bonificacion (Art. 40 Ley 5/2021, amended Ley 8/2025), Group I/II	None after donation	Low for the donated asset; moderate for remaining estate	Owners who want to transfer now
Will plus usufruct	99% bonificacion on bare ownership valued under CC Art 83 age scale	Full use of property for life	Low: bare ownership already transferred; consolidation on usufructuary death	Owners who want to plan ahead but keep lifelong use
Joint ownership (proindiviso)	99% bonificacion on deceased’s share	Shared during life	Higher: deceased’s share needs probate, no survivorship	Couples who understand the structure
SL company holding	Share transfer, no real-estate inheritance	Full control via shares	Lower for real estate; corporate tax during life	Multiple properties or complex estates

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.