Spanish Inheritance Law and Property - What Expats Need to Know About Renovations

Spanish inheritance law and property - the issues expats most commonly overlook

Most expat property owners on the Costa del Sol think about inheritance and succession only in the abstract - something to deal with at some point, not now. The connection between inheritance law and property renovation is even less commonly considered. Yet there are several points at which Spanish inheritance law intersects directly with decisions about property renovation and improvement that expats need to understand before they start significant work.

How Spanish inheritance law works for expats

Following the EU Succession Regulation which came into effect in 2015, EU residents can choose whether their estate is governed by the law of their country of habitual residence or the law of their nationality. For British expats, this means you can elect for UK succession law to govern your estate including your Spanish property rather than Spanish succession law.

This election must be made in a properly drafted will. Without a specific election, Spanish law will apply to your Spanish property by default. Spanish succession law includes forced heirship rules that reserve a portion of the estate for specific heirs regardless of what your will says - rules that are very different from the freedom of testation that UK law provides.

The practical implication: every expat who owns property in Spain should have a Spanish will drawn up by a Spanish notary or lawyer that makes their succession intentions clear and, where appropriate, makes a specific election under the EU Succession Regulation. This is not expensive and it prevents significant legal complications for your heirs.

The connection between renovation and inheritance

• Changes to the registered description of a property - significant renovation work that alters the size, layout, or description of a property as registered in the Registro de la Propiedad may need to be formally registered through a declaracion de obra nueva. If the property is subsequently inherited without this registration being up to date, heirs may face complications in establishing the true value and description of what they are inheriting.
• Unpermitted work and inheritance - unpermitted building work on a property that is subsequently inherited creates problems for heirs who may be unable to regularise the position, sell the property, or obtain mortgage finance on it. Heirs can be held responsible for enforcement action relating to unpermitted work carried out by the previous owner.
• Renovation costs and inheritance tax - significant documented renovation costs increase the demonstrable value of the property and can affect the calculation of inheritance tax payable by heirs. In Andalusia, regional inheritance tax rules apply and differ from the national framework.
• Joint ownership and renovation decisions - properties held in joint ownership by spouses or partners present specific issues when one owner dies. The surviving owner ability to carry out renovation work on the property may be affected by the succession process.

Practical steps for expat property owners

• Ensure you have a current Spanish will that clearly states your succession intentions and where appropriate makes a Brussels IV election for UK succession law
• Ensure all significant renovation work is properly permitted and registered in the Registro de la Propiedad
• Keep records of all significant renovation expenditure
• Review your succession planning whenever significant renovation work is carried out

Finding professional advice

SpainTrades lists surveyors and property professionals across Malaga and the Costa del Sol who can advise on property registration matters related to renovation work.

Find property professionals at www.spaintrades.es

Important note

The information in this article is intended as a general guide to the intersection of Spanish inheritance law and property renovation for expats. It is not legal advice and should not be treated as a complete or definitive account of Spanish succession law, inheritance tax, or property law. Always seek independent legal advice from a qualified Spanish lawyer with experience in succession and property matters before making any decisions. SpainTrades accepts no liability for decisions made on the basis of this article.