The surviving spouse's usufruct in an international estate: how it is valued and how much tax it carries in Spain

This is one of the situations I see most often in my office in Calp. One half of a foreign couple with a home on the Costa Blanca dies, and the one who remains simply assumes the property becomes theirs, entirely, without more. And often that is not the case. What they inherit is not the house: it is the right to live in it for the rest of their life. That has a name — the «usufruct» — and it carries real consequences, both for what you receive and for what you will pay the Spanish tax authority (Hacienda).

I am going to explain this calmly and without jargon, because understanding it now saves you nasty surprises later. And since your case is international — you or your partner are not Spanish, or you live between two countries — there is one more detail that almost nobody takes into account, and it can change everything. Let's take it step by step.

What is the surviving spouse's usufruct: using is not owning

Imagine a house is like a tree. Being the owner of the tree is one thing; having the right to pick its fruit every year is another. The usufruct is exactly that: the right to use something and keep what it produces (living in the house, renting it out and collecting the rent), without being its true owner.

When a person dies, in many cases the law grants the surviving spouse a usufruct over part of the estate. That means the widow or widower can go on using and enjoying those assets — usually the home — for the rest of their life. But the «bare property», what is technically called the nuda propiedad (bare ownership) — the tree without the fruit — passes to the children or other heirs. They are the owners, but they cannot use the house while the surviving spouse is alive.

That is why I said «using» is not the same as «owning». The surviving spouse uses; the children are the owners-in-waiting. Both positions have value, and both are taxed. Hold on to this image of the tree and the fruit, because everything else makes more sense with it in mind.

Two different questions people mix up

Here is the most common mistake, and I want you to see it clearly from the start. When we talk about the surviving spouse's usufruct, there are actually TWO completely different questions, and they are answered by different rules:

• The civil-law question: what exactly does the surviving spouse inherit? Do they get the usufruct of the whole house, of half, of a third? This is decided by the law of succession.
• The tax-law question: how much has to be paid to the Spanish tax authority for that usufruct? This is decided by tax law, specifically the Inheritance Tax (Impuesto sobre Sucesiones).

They look the same, but they are not. HOW MUCH you receive is one thing; HOW MUCH tax you pay on what you receive is quite another. And here is what matters for your international case: the first question (what you inherit) can be answered by a foreign law; the second (how much you pay in Spain) is always answered by Spanish law. We will come back to this at the end, but I wanted you to have it in mind already.

The 89-minus-age rule: how the tax authority values the usufruct

To collect the Inheritance Tax, the tax authority needs to put a number on the usufruct. And how do you price a right to use a house for life? With a fixed rule, the same for everyone, that does not depend on how long you will actually live (there is no way to know that), only on your age.

The practical formula is simple: you subtract the surviving spouse's age from 89, and the result is the percentage of the house's value treated as usufruct. The older the surviving spouse, the less their usufruct is worth (because, statistically, they will enjoy it for less time). This «89 minus age» formula comes from the Inheritance Tax Regulation.

The tax law itself puts it in different words — a 70% usufruct for those under 20, minus 1% for every year over that — but the result is the same number. What matters are the two caps: the usufruct is never worth less than 10% nor more than 70% of the house's value. However young or old the surviving spouse is, it always stays within that range.

And the bare ownership (nuda propiedad) that the children inherit? It is calculated by simple subtraction: it is what is left over. If the usufruct is worth 21%, the bare ownership is worth the remaining 79%. Between the two, they always add up to 100% of the house's value.

An example with numbers

Let's look at a concrete case, because it is easier to grasp at first sight. Imagine a home in Calp valued for tax purposes at 500,000 euros, and a surviving spouse aged 68:

• The surviving spouse's usufruct: 89 − 68 = 21%. In other words, 21% of €500,000 = €105,000. The surviving spouse is taxed on that value.
• The children's bare ownership: the remaining 79% = €395,000. The children are taxed on that value.
• The two amounts add up to €500,000, the total value of the house. Not one euro is left unallocated.

Notice the detail: the €500,000 figure is not «what you think it's worth» nor the price you paid. For real estate, the tax base is the Cadastral reference value (valor de referencia), an official figure the State publishes every year. It is not the market value, nor whatever your valuation report says; it is a figure that belongs to the tax authority, and since 2022 it is the one that governs this tax.

What happens when the usufruct comes to an end

The usufruct does not last forever: it normally ends when the surviving spouse dies. And this is where something happens that is worth planning for, because many families are caught by surprise years later.

Remember the tree and the fruit. While the surviving spouse is alive, the children own the tree but cannot touch the fruit. The day the surviving spouse dies, the usufruct is extinguished and the children recover the whole house: they once again have the tree AND the fruit together. This is called «consolidación del dominio» (consolidation of title): the ownership, which had been split in two, comes back together in a single hand.

What many people do not know is that this moment triggers tax again. When the children inherited, they only paid on the bare ownership (in the example, on those €395,000). They did not pay on the usufruct, because they did not hold it at the time. When the surviving spouse dies and the children recover the whole house, they have to settle the part that was left pending — the usufruct portion — following the rules of the Tax Regulation. It is not a new tax on a new inheritance: it is completing what was left half-finished at the time.

I am giving you the typical case so you understand it, without getting lost in the countless variations that exist: the surviving spouse dies, the children consolidate the ownership and settle the outstanding usufruct portion. There are other, rarer scenarios, but if you have this one clear, you have the essential idea.

The international factor: which law decides how much the surviving spouse receives

Now we get to what really sets your case apart from a lifelong Spanish family. Everything above — how much usufruct the surviving spouse gets, over what part of the estate — is decided by the law of succession. And what is «the law of succession» when you are not Spanish? That is the big question.

In Europe there is a common rule that resolves this: the European Succession Regulation (Regulation 650/2012). Its general rule is clear: your estate is governed by the law of the country where you had your habitual residence when you died. If you lived on a stable basis in Spain, Spanish law would in principle apply; if your life was really based in your home country, the law of that country could apply instead.

But there is a very powerful exception, and it is the one I always recommend looking at: that same Regulation lets you choose, in your will, to have your estate governed by the law of your nationality. If you are British, German or French and you put it in writing, your estate will follow your national law even though you live in Spain. This is called «choice of law», and it is one of the most important decisions a foreigner with assets here can make.

Why does this matter so much for the usufruct? Because every country treats the surviving spouse very differently. Spanish law grants them a usufruct over part of the estate. A foreign law may give them outright ownership of a share instead, or a different kind of usufruct, or broader rights, or narrower ones. Depending on which law applies, the surviving spouse can end up with very different things. That is why the first thing I check in an international estate is: which law governs here?

The law can be foreign, but the tax in Spain is Spanish

And here I close the circle with the most important idea in this whole article, so read it slowly. The European Regulation decides which law says HOW MUCH the surviving spouse receives. But that Regulation does not touch taxes. Not a single word about how much is paid. It leaves that entirely to each country.

What does that mean in practice? That even if your estate is governed by English, German or French law, if there is a house in Spain, the Inheritance Tax on that house is paid in Spain and under Spanish rules. Including the «89 minus age» rule for valuing the usufruct. The foreign law tells you what you inherit; Spanish law tells you how much you pay on what is here.

One honest caveat, so as not to create false expectations: what can vary a great deal from one autonomous region to another is the tax relief available. In the Comunitat Valenciana, for example, there is a very high relief (99%) for spouses, children and parents, but that is neither universal nor permanent: it depends on the competent autonomous region and on the rules in force at any given time. That is why I never give you a closed figure without reviewing your specific case.

What is worth having tied down

If you have assets in Spain and your family situation is international, do not wait for the problem to arrive. Good planning — starting with reviewing your will and which law you want to apply — saves you trouble and, often, money. Write to me and we will look at it together: first I understand your case, then I explain your options with their pros and cons, and only then do we act. That is how I work.