Many Swedish, Norwegian and Danish owners of a home on the Costa Blanca ask us the same question: what happens to the property when they pass away and their children — usually still living back home — have to inherit it? The good news is that, thanks to regulatory changes over the past decade, inheriting a property in the Comunidad Valenciana as a non-resident is far less costly than it used to be.
Which tax applies, and who sets the rules
Inheriting assets located in Spain triggers the Impuesto sobre Sucesiones y Donaciones (ISD), Spain’s inheritance and gift tax. Although it is a national tax, its management and most of its reductions and rebates (“bonificaciones”) are devolved to the autonomous regions. When the deceased was not resident in Spain, the applicable regional rules are those of the region where the highest value of their Spanish assets is located. If your property is in Alfaz del Pi, Altea, Benidorm, or anywhere else in Alicante province, the Comunidad Valenciana rules apply — and they are currently among the most favourable in Spain for spouses, children, grandchildren, parents and grandparents.
The 99% rebate for close family
Since 28 May 2023, the Comunidad Valenciana has applied a 99% rebate on the tax due for Groups I and II of kinship: spouse, children, grandchildren, parents and grandparents. On top of this, each heir in these groups benefits from a €100,000 reduction of the taxable base, and — if the property was the deceased’s habitual residence — a further 95% reduction capped at €150,000. This last reduction rarely applies to a foreign owner’s second home, unless the deceased genuinely lived in Spain.
New for 2026: Law 5/2025 of 30 May also introduces a rebate for Group III (siblings, uncles/aunts and nieces/nephews): 25% from 1 June 2026, rising to 50% from 1 June 2027.
A worked example
Say a Swedish daughter inherits an apartment on the Costa Blanca worth €200,000 from her father, with no other assets in Spain. After the €100,000 kinship reduction, the taxable base is halved; the 99% rebate is then applied to the resulting tax quota. The final bill typically comes to around €1,500 — a fraction of what would be owed under the national rules or in regions without equivalent rebates.
Why this wasn’t always the case
Until 2015, non-residents were forced to pay under Spain’s less favourable national rules, while Spanish residents could apply the regional rebates. The Court of Justice of the EU ruled that this difference breached the free movement of capital, and Spain amended the law to put EU and EEA residents on equal footing with Spanish residents. In 2018, Spain’s Supreme Court (judgment 242/2018) extended the same right to heirs living outside the EU, a position later confirmed by Law 11/2021. Today, a Swedish, Norwegian or any other heir can choose to apply the Comunidad Valenciana rules on exactly the same terms as a Spanish resident.
One practical detail: heirs who do not reside in the EU or EEA (or in a country without an information-exchange agreement with Spain) must appoint a tax representative domiciled in Spain. This does not apply to residents of Sweden, Norway or Denmark, since all three are within the EU or EEA.
The inheritance tax return (Modelo 650) must be filed within six months of death, extendable by a further six months if requested within the first five. Missing the deadline triggers surcharges that are easy to avoid with a little advance planning.
For a rough estimate of what your heirs would owe, try our free inheritance tax calculator.
At Colás Abogados we have spent over 18 years helping Scandinavian families plan the succession of their Costa Blanca properties — from drafting Spanish wills to handling the acceptance of inheritance and settling the tax with the Generalitat Valenciana.
Contact us:
Email: [email protected]
Phone: +34 629 549 430
Web: www.colas-abogados.com