🇪🇸 Own or Inherit a Home in Madrid? Here’s What Foreigners Should Understand
If you’re a non-resident heir, an expat, or simply have family property in Madrid, inheriting it comes with a set of legal and tax obligations. Madrid’s regional laws offer some of Spain’s most generous inheritance tax exemptions, but only if you handle the process correctly.
This article walks you through how foreigners can inherit property in Madrid legally, efficiently, and tax-optimized.
🧾 Is There Inheritance Tax in Madrid?
Yes — but it’s highly reduced for most family members.
In Madrid, inheritance tax is governed by regional laws, and foreign heirs (EU/EEA nationals) are entitled to the same benefits as locals, including:
✅ 99% reduction for spouses, children, and parents (Groups I & II)
✅ Large reductions on property and business transfers
✅ Tax allowances even for second homes and bank assets
💡 Non-EU citizens can also apply these reductions if they appoint a legal representative in Spain or have local residence ties.
🔁 Step-by-Step: How to Inherit Property in Madrid
1. 🧾 Gather Essential Documents
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Death certificate (apostilled and translated into Spanish)
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Last will (Spanish or foreign)
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NIE number (for each heir)
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Property title deed (escritura)
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Proof of relationship (birth or marriage certificate)
2. 🧮 File and Pay Inheritance Tax (Modelo 650)
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Deadline: 6 months from the date of death
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Extension possible (within first 5 months)
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Submit in the Madrid tax authority (Agencia Tributaria de Madrid)
Thanks to the 99% tax reduction, many heirs pay a symbolic amount or nothing at all — but the paperwork is still mandatory.
3. ✍️ Sign the Inheritance Deed
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Must be signed before a Madrid notary
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Confirms acceptance of inheritance
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Confirms payment of all taxes
4. 🏛️ Register the Property in the Land Registry
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Submit inheritance deed and tax proof
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Update ownership with Registro de la Propiedad
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Pay Plusvalía Municipal (separate city-level tax)
💰 Madrid’s Inheritance Tax Reductions Explained
| Heir Type | Base Deduction | Final Tax (after 99% reduction) |
|---|---|---|
| Spouse or Child | €16,000–€47,858 | 1% or €0 |
| Grandchild (under 21) | Extra €6,000 bonus | Very low |
| Parent or Grandparent | Standard reduction | Minimal or none |
✅ Applies even if the deceased or heir is not a Spanish national — what matters is residency and asset location.
⚠️ Foreigners Often Overlook These Key Issues
| Common Oversight | Consequence |
|---|---|
| Missing 6-month deadline | Penalties and interest charges |
| Not using a Spanish POA | Heirs must travel for all paperwork |
| No clear choice of law in the will | Spanish forced heirship may apply |
| Forgetting Plusvalía Municipal | Property cannot be transferred legally |
| Assuming tax exemption means no filing is needed | Tax return still required |
⚖️ How a Lawyer Helps Foreign Heirs in Madrid
We guide you through:
✅ Will validation (Spanish or foreign)
✅ NIE application and tax ID setup
✅ Filing Modelo 650 with regional exemptions
✅ Managing notary appointment and deed drafting
✅ Registering the property
✅ Representing you via Power of Attorney if abroad
🧠 Tip: Power of Attorney Saves Time
If you’re outside Spain, a POA lets your lawyer:
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Accept the inheritance
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File taxes and sign notarial deeds
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Register the home in your name
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Even sell the property later, if needed
✅ This is the easiest way to inherit without traveling.
📞 Inheriting a Property in Madrid? Get Legal Help That Speaks Your Language
Madrid offers one of Spain’s most favorable inheritance tax regimes — but only if the legal process is handled properly. Our team helps foreigners take ownership of property, file taxes, and protect their assets.
👉 Contact us today to handle your Madrid inheritance from abroad — stress-free and legally compliant.