Inheritance Tax on Costa Blanca Property: A Marina Alta Guide for Non-Resident Heirs

If you are inheriting a house in Denia or anywhere in the Marina Alta as a non-resident, here is the short answer most people are too scared to hope for. For a spouse, a child or a parent, the Spanish inheritance tax on that home is usually a small fraction of the frightening headline figures, because the Valencia region wipes out almost all of it. The catch is not the tax you pay now. It is a quiet decision made at the inheritance that can cost the heir far more when they come to sell.

I am Daniel Bertomeu and I look after the tax side of our firm. My father, Juan Antonio Bertomeu Valles, is the lawyer, ICALI number 4643, handling estates on this coast since 1991 from our offices in Moraira and Denia. Families inheriting from British, German and Dutch owners are a big part of our week, so none of this is theory to me.

First, do non-residents even pay Spanish inheritance tax?

Yes. If the asset sits in Spain, a flat in Denia, a villa down in Les Marines, a plot up on the Montgo, Spain taxes the inheritance, whether you live in London or Dusseldorf. For years the state gave non-residents a worse deal than residents, until the European Court of Justice struck that down in 2014 and Spain had to extend the same regional reductions a local family gets.

And if you are British and worried that Brexit undid all of that, it did not. The extension to people outside the EU, so UK heirs after Brexit, and American heirs, rests on later Spanish Supreme Court rulings from 2018 rather than the 2014 European case alone. The practical result is the same either way: you are entitled to Valencia's rules, not the punishing state default. The full picture of how inheritance and family transfers work across Spain is in our inheritance and family transfers guide on Expat Abogados.

The Valencia relief that changes everything

So here is why I keep telling worried families to breathe. In the Comunitat Valenciana, which covers Alicante, Valencia and Castellon, close relatives get a 99 percent reduction on the inheritance tax bill. They call it a bonificacion. Close relatives means Group I and Group II: spouses, children and other descendants, parents and other ascendants. If you are the widow, the son, the daughter or the parent of the person who died, you are almost certainly in. And 99 percent off is very close to gone.

It is well settled. One condition worth knowing: the inheritance has to be formalised in a public deed before a notary, which for a property you would be doing anyway. The outer circle, siblings, aunts and uncles, nieces and nephews, is getting there more slowly. From the 1st of June 2026 that group gets a 25 percent reduction, rising to 50 percent from the 1st of June 2027. Better than nothing, but nowhere near the 99.

A worked example, Denia numbers

Say your father owned an apartment in Denia, valued at 400,000 euros on his passing, and it comes to you, his daughter in Manchester. Group II, close family. Under the old state scale, the bill on that value could run into tens of thousands of euros. But you get Valencia's rules, and after the 99 percent bonification the tax you actually pay is roughly one percent of what the state scale threatens. A few hundred euros rather than a five-figure shock.

Honestly, your exact figure moves with the valuation, your relationship to the deceased and the paperwork being done correctly, so treat that as the shape of it, not a quote. But the shape is the point.

The main-home reduction, on top

There is a second relief that can stack for the right case. If the property was the deceased's habitual residence, their actual main home, Valencia allows a further large reduction on the value of that home before the tax is even worked out. Same close family, and in some cases a relative over 65 who genuinely lived with the deceased. One holding condition: you are expected to keep the property for a set number of years rather than flip it straight away.

The exact percentage, the cap per heir and the permanence period are details I would check against the current Valencia text for your case before promising a figure, so I will not throw a hard number at you here. The genuinely case-by-case question is whether a Denia flat really counted as the habitual residence of someone who split the year between two countries. That one needs a person, not a web page.

The trap: declaring a low value to save tax now

Now the part I actually wanted to warn you about. When you inherit, the property gets a declared value, and the instinct is to declare it low to keep the bill down. In Valencia, with the 99 percent bonification, that instinct usually backfires.

When you later sell, your capital gain is the sale price minus your acquisition value, and that acquisition value is what you declared at the inheritance, plus costs. A non-resident's gain on a Spanish property is taxed at 19 percent. So a low declaration saves a sliver on a tax already knocked down to almost nothing, and inflates the gain taxed at 19 percent years later.

Concrete numbers. Real value 400,000, and you are tempted to declare 320,000 to shave the inheritance tax. Because of the 99 percent relief, you save almost nothing now. But you have just lowered your acquisition value by 80,000 euros, and if you sell later for 450,000, nineteen percent of that 80,000 is 15,200 euros of extra tax you did not need to create. So the honest advice here is the opposite of the street wisdom. Declare the real, defensible market value.

What about UK inheritance tax on the same house?

The question British families ask me most. There is no dedicated Spain-to-UK treaty for inheritance tax, the way there is for income tax, so a UK-domiciled person's estate can be in the frame for both taxes on the same house. The relief for that overlap runs through a unilateral credit, one country crediting tax paid to the other. Workable, but fiddly, and it genuinely depends on the deceased's domicile and the make-up of the estate. This is one where I would not want you acting on a general article, mine included.

Who you actually need, and the deadline

There is usually a final piece of the deceased's own non-resident tax to close off, the annual Modelo 210. That is a clean, standard job, and you can sort it through our Modelo 210 in Denia page without sitting across a desk from anyone.

The inheritance itself is a different animal. Accepting the estate, the deed, the main-home question, the valuation decision I just walked you through, coordinating it with a UK will. For a non-resident it is filed centrally through the national office in Madrid, and the deadline is generally six months from the death, so it is not something to leave in a drawer. That is my father's side, laid out on our Wills and Inheritance in Denia page.

If you want a straight read on where you stand, tell us what you are dealing with through the contact form. Our Denia office is on Calle Ramon y Cajal. Sometimes the answer is simpler and cheaper than you feared. When it is, we will tell you plainly.