Inheritance tax on a Costa Blanca home when you live abroad
The Valencian region is among the most generous in Spain when parents leave a home to their children. Children, grandchildren, spouses and parents who inherit receive a 99% reduction of Valencian inheritance tax, and it applies to heirs who live abroad too. For brothers, sisters, nephews and nieces the bill is very different.
Which rules apply when you live abroad
Since July 2021, every non-resident, inside or outside the EU, can apply the regional rules instead of the less generous state ones. If the person who died lived abroad and owned a Costa Blanca home, the Valencian rules apply when the Valencian region holds the greatest value of their Spanish assets. When the heir lives abroad, the return goes to the Spanish tax agency's national office in Madrid, not to the Valencian tax agency, within six months of the death, on forms 650 and 660.
What each heir would pay
| Heir | Allowance | Reduction of the tax |
|---|---|---|
| Children, grandchildren, spouses, parents (groups I and II) | €100,000, more for children under 21 | 99% |
| Brothers, sisters, nephews, nieces, uncles, aunts (group III, blood) | €7,993.46 | 25% for deaths from 1 June 2026, 50% from 1 June 2027 |
| In-laws (group III) | €7,993.46 | None |
| Cousins, distant relatives, unrelated people (group IV) | None | None |
On a €450,000 villa, a son or daughter who inherits the whole home pays about €686; two children with half each pay about €167 each. A brother with modest wealth of his own would pay about €112,300 for a death between 1 June 2026 and 31 May 2027, and about €74,900 from 1 June 2027. Before June 2026 he would have paid about €149,700.
File on time
The return must be filed within six months even when the tax is almost nothing, and the extension of six more months must be requested within the first five. The 99% reduction is only available on a return filed within the deadline, or filed late before the tax agency has written to the heirs about it. An heir abroad who waits for a letter from Madrid can lose almost the whole relief.
Gifts during your lifetime
Gifts to children, grandchildren and spouses also carry a 99% reduction of Valencian gift tax if made in a Spanish public deed. That does not make a gift cheap: Spain taxes the giver on the gain as if the home had been sold, at 19% for a non-resident, and the plusvalía municipal is due. For a home bought long ago, inheriting is usually cheaper overall.
Your own country still counts
The Valencian reduction removes Spanish tax, not the tax of the country where you or your heirs live. The United Kingdom (for long-term residents), the Netherlands, Belgium and Germany tax the estate, including the Spanish home, and credit only the Spanish tax actually paid. On the €450,000 villa left to one child, Dutch tax would be about €68,200 and Flemish tax about €72,800 after the Spanish credit. Sweden and Norway have no inheritance tax, and Poland exempts close family who notify its tax office within six months of the inheritance being confirmed.
See the figures for your own case with the free calculator.
More detail in the book. Chapters 11 and 13 of Buying a Home on the Costa Blanca as a Non-Resident cover this with worked examples, deadlines and the risks behind the figures.
General information based on the rules in force in October 2026, not legal or tax advice. Rules change often: check your own case with an independent Spanish lawyer or tax adviser before you act.
Related: How much does it cost to buy a home on the Costa Blanca? · Legal checks before buying a villa or country house on the Costa Blanca