Going to sell what you inherit? The value you declare in the inheritance decides your tax when you sell

When someone inherits a house in Spain while living abroad, the first thing they want is to settle the inheritance as soon as possible. That is understandable. But there is a question worth asking at the start, not at the end: are you going to keep the property or are you planning to sell it? Because the answer changes how the inheritance should be declared. And this, which seems like a technical detail, can mean thousands of euros of difference.

The value you declare today is your cost tomorrow

When you sell a property, you are taxed on the gain: the difference between the sale value and the acquisition value. The key lies in what counts as the "acquisition value" when you inherited the house: it is the value declared at the time in the inheritance, for Impuesto de Sucesiones purposes. In other words, the figure you put in the inheritance becomes your starting point when you sell.

The consequence is direct. If you declare a low value in the inheritance, you pay less Impuesto de Sucesiones at that moment, but your acquisition value stays low, and when you sell your gain will be larger, and with it the tax on the sale (for non-residents, 19 % of the gain). It is a quick win now and a bigger bill later.

The effect of the 99 % relief

This is where the planning becomes especially interesting in the Comunitat Valenciana. Because the 99 % regional relief leaves the Impuesto de Sucesiones at a very small amount for close relatives, declaring a high value in the inheritance has barely any tax cost at that moment. And in return, it raises your acquisition value, so that the day you sell your gain will be smaller and you will pay less on the sale.

It is perfectly legitimate planning: it is not about inventing a value, but about declaring the property's real value instead of minimising it. What in another region with no relief would carry a high Inheritance Tax cost has almost none here, so it is worth making good use of it.

Watch out for the valor de referencia

There is a floor you cannot ignore: the Catastro's valor de referencia. Since 2022 it acts as the minimum base for the Impuesto de Sucesiones, so you cannot declare below it without risking a review. That is why, in practice, the planning margin runs from the valor de referencia upwards, up to the real market value. And if the valor de referencia is, moreover, higher than the real one, the option of challenging it comes into play, which is another story worth assessing.

And do not forget the plusvalía municipal

To the picture you have to add the plusvalía municipal, which appears both when you inherit and when you sell, and which depends on each town hall's ordinance. That is why I insist on looking at it all together: Inheritance Tax, gain on the sale, valor de referencia and plusvalía. They are pieces of the same puzzle, and they fit together better if planned from the start.

If you have inherited or are about to inherit a property on the Costa Blanca and you are not sure whether you will sell it, write to me before declaring the inheritance. We do the full calculation — Inheritance Tax with the Valencian relief, future gain and plusvalía — to decide with good judgement what value it suits you to declare. Better to think it through beforehand than to regret it afterwards.