Inheriting as a non-resident: you file the Impuesto de Sucesiones with the State, but you apply the 99 % Valencian relief

I often hear the same fear: "Since I live outside Spain, they will make me pay the full Impuesto de Sucesiones, without the reductions that locals get". It is a very widespread misunderstanding, and correcting it can save you tens of thousands of euros. Let us separate two things that people mix up: where the tax is filed and which rules apply.

Where it is filed: with the State (AEAT)

The Impuesto de Sucesiones (Inheritance Tax) is devolved to the autonomous regions, but when the heir is a non-resident in Spain, it is filed with the State: the Tax Agency (AEAT), specifically the Oficina Nacional de Gestión Tributaria (National Tax Management Office). For an inheritance (mortis causa acquisition) the form is Modelo 650. A resident would file it with their autonomous region; a non-resident, with the AEAT. So far, what almost everyone knows.

But you apply the regional rules: the key that saves thousands

Here is the twist that many people do not know. For years, non-residents were forced to be taxed under the State rules alone, with no access to the reductions of the autonomous regions. That changed: the Court of Justice of the European Union, in its judgment of 3 September 2014 (Case C-127/12), held that this discrimination between residents and non-residents breached the free movement of capital.

After that judgment, the law was reformed to allow non-residents to apply the rules of the relevant autonomous region. And one important detail: subsequent Supreme Court case law (2018) extended that right to residents in countries outside the European Union as well. In other words, wherever you live — in Germany, in the United Kingdom after Brexit, or in the United States — you can access the regional benefits to which you are entitled.

The 99 % Valencian relief

If the property you inherit is in the Comunitat Valenciana — Calpe, Altea, Benissa, the whole Costa Blanca — the difference is enormous. Through Law 6/2023 of 22 November, the Comunitat Valenciana grants a 99 % relief on the Inheritance Tax liability for the closest relatives: groups I and II, which are descendants (children, grandchildren), spouse and ascendants (parents, grandparents). This relief applies with effect from 28 May 2023.

And there is news for more distant relatives: Law 5/2025 of 30 May has approved a relief for group III (siblings, uncles, aunts, nephews and nieces), which comes in gradually: 25 % for deaths from 1 June 2026 and 50 % from 1 June 2027.

Deadline: six months (which pass quickly)

The Inheritance Tax is self-assessed within a deadline of six months from the death. It is extendable if requested in time, but the clock starts ticking from day one, and gathering the documentation for an international inheritance — certificates, translations, apostilles — takes time. That is why it is best to start early and not leave it to the last minute.

If you have inherited or are about to inherit a property on the Costa Blanca while living outside Spain, write to me. I calculate your Inheritance Tax applying the Valencian relief you are entitled to, prepare Modelo 650 for the AEAT and coordinate all the documentation so that you do not pay more than the law allows.