What taxes must you pay when inheriting a home in Malaga
When accepting the inheritance of a home in Malaga, You must be aware that you are assuming the payment of taxes on this capital gain. The two sides of the same coin! Each region is governed by its own laws, which also vary based on the value of the property and the relationship with the deceased. Do you know what taxes to pay when inheriting in Malaga?
With a simple reading, We want you to know what taxes to pay when inheriting a home in Malaga, how they are calculated and what exemptions and bonuses are available. Let's review in depth everything about the Inheritance and Municipal Capital Gains Tax in Malaga.
1. Inheritance and Donation Tax
The first question you will ask yourself is: What is Inheritance and Gift Tax? It is a state tax that applies to both inheritances and donations.. The amount to pay varies depending on 3 components:
- The value of the home or inheritance.
- The relationship of the deceased and the heir. What are these degrees?
- Grade I. Spouses, parents and natural or adopted children of the deceased.
- Grade II. Siblings, brothers-in-law, grandparents and grandchildren of the deceased.
- Grade III. uncles, great-grandparents, great-grandchildren and nephews of the deceased.
- Grade IV. Cousins and great-uncles of the deceased.
- The Autonomous Community where the home is located. In the case of Malaga, the Andalusian Government.
1.1 How the Inheritance and Donation tax works in Malaga
This tax has the following bonuses and exemptions in the Autonomous Community of Andalusia.
- Bonus 99% for spouses or common-law partners, direct ascendants and descendants of the deceased for inheritances with a value of less than €1,000,000. This is the most common case and the one you probably find yourself in..
- To avoid the debt of Andalusian families, This bonus was implemented to which, In addition to being necessary to meet the above requirements, Only heirs with pre-existing assets of less than 1 million euros.
- Reduction of up to €250,000 for relatives of the 2nd and 3rd degree of consanguinity such as siblings, uncles and nephews if their assets before inheritance were equal to or less than €1,000,000.
- Bonus up to 99% for those close to the deceased with a disability of more than one 33%, as long as the inheritance is less than €1,000,000.
- Reductions for habitual residence. In addition to the aforementioned bonuses, Reductions are made from the real net value of the inherited habitual residence as long as the heir establishes the residence as his habitual residence during the 3 following years after death.
It is also necessary to meet one of these two requirements:
- Be part of Group I and II of kinship: spouses or de facto partners, direct ascendants or descendants.
- Be a collateral relative and have lived with the deceased for the last two years.
| Net real value of the habitual residence | % tax reduction |
|---|---|
| Up to €123,000 | 100% |
| From €123,000.01 to €152,000 | 99% |
| From €152,000.01 to €182,000 | 98% |
| From €182,000.01 to €212,000 | 97% |
| From €212,000.01 to €242,000 | 96% |
| More than €242,000 | 95% |
2. Municipal Capital Gains or Tax on the Increase in the Value of Urban Land
The tax that must be paid every time a property changes ownership! It is a tax associated with the increase in the value of land within a municipality, so it is a fee to settle with your city council.
What are the two factors that determine this tax?
- The cadastral value of the land, that appears reflected in the IBI invoices.
- The number of years that have passed since the acquisition of the property by the former owner.
The amount to be paid, therefore, It is calculated by multiplying the number of years elapsed from the purchase of the property to the inheritance, by a coefficient established by the Malaga City Council or your locality.
You can read more information about how municipal capital gains work in the following article: how municipal capital gains work.
If you are wondering what documentation to submit to settle this tax, we indicate it to you below: an original simple copy of the inheritance award. If this document does not exist, a death certificate will be required, certificate of last will, testament, copy of the Inheritance and Donation Tax settlement and copy of the property acquisition titles.
Are there more expenses associated with inheritance?
Of course! In addition to “settling accounts with the administration”, you will incur other expenses, as:
- Lawyers for inheritance processing who will help you in the inheritance acceptance process. The amount of your fees will depend on factors such as the existence or not of a will., the number of heirs, the complexity of the case and the amount or assets to be inherited.
- Notary. It will be necessary to go to a notary to carry out the distribution of assets and adjudication of the inheritance and the declaration of heirs.
- Property registration. Once you have settled the aforementioned taxes, It will be necessary to register the properties in the name of the heirs.
But, we have good news for you! Now processing your inheritance can be free: Fill out this form to find out how we can manage your inheritance and we will contact you soon.