How much inheritance tax you pay in Spain (and the money you have to advance before you see a cent)

Inheriting sounds like money is about to land in your account. What almost nobody tells you is that, before that money is actually available, you usually need to pay something out of your own pocket first. The bank won’t let you touch the deceased’s account until you prove the inheritance tax has been paid, and that tax has a deadline that starts running on the day of death, not on the day you finally sort out the paperwork.

It’s a cash-flow problem as much as a “how much do I owe” problem, and it’s the part that’s worst explained in almost everything written about inheritances.

The money gets frozen until you pay the tax

When someone dies, their bank accounts don’t simply become available for the heirs to use. Spain’s Inheritance and Gift Tax Act requires banks and any other financial intermediary to check that the tax has been paid (or that the inheritance is exempt) before handing money to anyone other than the original account holder: they “shall not release assets to anyone other than the holder without prior proof that the tax has been paid or that an exemption applies.”¹

That creates the uncomfortable situation this article is about: to unfreeze the deceased’s money, you first need to have already paid the tax you probably planned to pay with that same money. If you don’t have savings of your own to cover it, the usual workaround is for one of the heirs to advance the payment and get reimbursed later once the estate is split, or to take out a short-term bridge loan. The point is to know this in advance, not to discover it once the clock is already running.

Two different deadlines, and both start on the day of death

Inheriting in Spain involves two taxes that shouldn’t be confused with each other:

• Inheritance Tax (ISD). The deadline to file it is six months from the date of death.² You can request a six-month extension, but you have to ask for it within the first five months, and the extension isn’t free: it accrues late-payment interest for the extra time you take to pay.
• Municipal capital gains tax (plusvalía municipal, IIVTNU). If the estate includes urban real estate, the town hall where the property sits charges this separate tax, also with a six-month deadline from the date of death, extendable up to one year.³ It’s a different tax, with its own filing and its own deadline, even though it starts ticking on the same day as the one above.

Neither deadline moves because splitting the estate is complicated, because the heirs disagree, or because the notary is slow to schedule you in. Both count from the date of death, and if you miss them without having requested an extension in time, you pay surcharges on top of the tax itself.

If the frozen account is the one you live on: what you can do (without avoiding the tax)

Everything above matters a lot more when the frozen account isn’t a separate savings pot, but the account a couple uses to pay the rent, the mortgage or the weekly groceries. None of what follows is about avoiding the tax (you still owe it either way): it’s about making sure the freeze doesn’t leave you without cash to live on while it’s being sorted out.

The type of signature on a joint account matters, a lot, at least on paper. Under Spain’s own banking-supervisor guidance (Banco de España), on an “either signature” account (the most common setup for couples, where any holder can sign alone) the bank is required to keep honouring the surviving holder’s instructions, with no need for the heirs’ consent. On a “joint signature” account (every holder must sign), the deceased’s signature has to be replaced by all of their heirs’, so the practical freeze does apply to the whole balance.⁴ Stated policy aside, real-world compliance varies: it’s common for a branch to freeze the whole account out of sheer caution the moment it learns of the death, even when the account is of the “either signature” type. If that happens to you, the rule is still on your side: you may need to point to it in writing, or file a complaint, to get it enforced. Either way, it’s worth checking which type your household account is before you ever need to know.

If the couple is married under Spain’s community-property regime (gananciales), the half that’s meant to stay available isn’t, strictly speaking, an advance on the inheritance: it’s money that already belonged to the surviving spouse under the marriage’s own property regime. Only the deceased’s half (plus any assets they held separately) forms part of the estate subject to Inheritance Tax. Formally liquidating the marital community property, which fixes exactly which half belongs to whom (and therefore what goes into the estate), is a step that comes before the estate is split, and until it’s done the bank may stay cautious about the whole account, so it’s worth asking early.

This has a practical consequence worth stating plainly: accessing that half, which is already yours, isn’t a trick to dodge the tax, because it doesn’t change what’s owed on it. The tax falls due on the day of death, and the return has to document the account balances (which is why the usual step is to ask the bank for a certificate of the balance on that date). Whatever happens to the account afterwards, whether the survivor withdraws from it or the bank freezes it, doesn’t change that fixed snapshot, which is what counts for the tax.⁵ Put differently: protecting your own half from a freeze that, under Banco de España’s guidance, shouldn’t reach an “either signature” account isn’t hiding anything.

That said, two caveats. First: make sure the account really does allow either signature and the couple really is under the community-property regime (not separate property, and without much separate money mixed into that account), because the protection depends exactly on that. Second: when in doubt about exactly how much “your half” is (an account is rarely a perfect 50/50 split if there are unsettled community debts or some separate income mixed in), it’s safer to undershoot than overshoot: a shortfall can be adjusted in the formal liquidation of the community property, while paying back an excess already withdrawn is more awkward, especially if there are other heirs besides you. Keeping a record of what was withdrawn and when helps either way.

For funeral expenses, there’s an exception built for exactly this, again on paper. The same Banco de España guidance explicitly lists disposals “that serve to pay funeral or burial expenses” among the few exceptions to the general freeze on a deceased person’s account, even a sole-holder one. It covers that specific payment, not a free cash withdrawal, and the guidance doesn’t say what paperwork you need, so ask your bank what it requires.⁶ But, and this matters if your family’s own experience has been the opposite, official guidance doesn’t guarantee your branch will apply it without a fight: some banks handle it smoothly, others resist anyway. If yours refuses, the route is a written complaint to the bank’s customer service citing that rule, and, if it isn’t resolved within a month (or is rejected sooner), escalating to Banco de España itself.

And if there genuinely isn’t enough liquidity to pay the tax on time, there’s a route built exactly for that, before resorting to a loan or advancing money from elsewhere: you can ask the office that manages the tax for a deferral of up to one year or a payment plan of at most five annual instalments, when the estate has no cash or easily sellable assets available to pay. Both accrue late-payment interest, and the payment plan also requires a guarantee. You have to request it before the payment deadline runs out.⁷

How much you actually pay depends on two things, not one

There’s no single table because the final amount depends on combining two factors:

1. Your relationship to the deceased. Spanish state law groups heirs into four categories and applies a different reduction to the taxable base for each one:⁸

2. The regional government that collects the tax, which almost always improves on these state figures with its own reductions and rebates, sometimes bringing the bill down to practically zero for a spouse or children. The table above is the legal floor, not what you’ll actually pay in most regions: you need to check the regional rules in force to know what’s left after applying them.

Who gets to collect: it’s the deceased’s residence that decides, not yours or the property’s

Here’s the detail that surprises people most, and it’s easy to confuse with the rule for a different tax. For Inheritance Tax, the regional authority with jurisdiction is the one where the deceased person was resident (the law measures it by where they spent the most days in the five years before death), not the region where you live as an heir, and not the region where the inherited property happens to be.⁹

It’s the opposite rule to buying a home, where the ITP rate you pay is decided by where the property is, not where the buyer lives. With inheritances it’s the other way around: if your father lived his whole life in Madrid and you live in Barcelona, the tax is settled under Madrid’s rules, even though you’re a resident of Catalonia, and even if the property you inherit is somewhere else entirely.

A worked example

Imagine you inherit, as an only child, a flat valued at €300,000, with no debts attached, that wasn’t your parent’s main home (if it was, state law adds a further 95% reduction, capped at €122,606.47 and conditional on keeping it for ten years). With the state-level Group II reduction (€15,956.87), the taxable base is €284,043.13. Applying the state scale (progressive, from 7.65% to 34%) and the Group II multiplier for someone whose prior wealth is up to €402,678.11 (which is 1), the bill comes to about €51,400. That’s the calculation with the state scale, before any regional reduction or rebate.¹⁰

In practice, though, most regions don’t apply that raw scale to children and spouses. Several have added 99% or 100% rebates on the final amount for Group II, so the same flat, inherited in one of those regions, can leave the tax at a few hundred euros, or at zero. The gap between one region and another, for the exact same inheritance, can run into tens of thousands of euros, which is why memorising “what a friend paid” in a different region is useless: what matters is where the deceased lived and what rebate that specific region offers for your relationship group.

Afterwards: what you inherit sets what you’ll pay if you sell it

There’s a second tax consequence that shows up later, when you decide to sell what you inherited. The value you declared (or that the tax office assigned) for Inheritance Tax purposes becomes your acquisition value for income tax, capped only by market value.¹¹ And the acquisition date, for this purpose, is the date of death, not the day you finish the paperwork or sign the inheritance deed.

This matters because the capital gain the day you sell is calculated as the difference between the sale price and that inherited value. The higher you declared the value for Inheritance Tax purposes (within reason, and within real market value), the smaller the gain you’ll be taxed on if you ever sell. It’s one more reason not to rush through the inheritance filing.

A short checklist before accepting an inheritance

• Work out, even roughly, how much you’ll owe under the rules of the region where the deceased was resident, not your own region.
• If there’s a property involved, remember the municipal capital gains tax is a separate charge, with its own deadline and its own town hall.
• If your everyday account is joint with your partner, check whether it requires either signature or all of them: it changes a lot how much liquidity the survivor keeps, though actual bank compliance varies and you may need to file a complaint.
• If the deceased’s accounts won’t be unfrozen in time, decide in advance who advances the payment and how the heirs settle up afterwards, or consider requesting a deferral of the tax itself before taking out a loan.
• If you suspect the estate has more debts than assets, find out properly before accepting: accepting an inheritance also means accepting its debts.
• Keep every document about the declared value: you’ll need it the day you sell what you inherited.

None of this replaces whoever is handling the file (notary, agency or tax advisor), who knows the exact rebate in your region and the precise deadlines for your case. What this article tries to do is help you understand the mechanism before that meeting: what gets paid, when, and why you might need to advance money of your own before seeing a single euro of the inheritance.

How Cuéntamo helps with this

The cash-flow hit of an inheritance is exactly the kind of surprise a cash flow forecast lets you see coming: if you know you’ll need to advance a large amount in a few months (the tax, the capital gains charge, the notary’s fees), you can log it as a planned transaction and watch how it affects your balance before it happens, instead of finding out the day it’s due.

And once the estate is settled and the inherited flat is really yours, Cuéntamo Más lets you add it to Net worth as another asset, alongside the rest of your accounts and investments, with its acquisition date and value saved for the day you sell it. If what you inherit is a home you plan to rent out, what renting out a flat in Spain really taxes has its own article, and if instead you’re thinking of buying something with the inheritance, the taxes and costs of buying a home in Spain covers that other side of the ledger. If what you inherit includes investment funds or shares, how your investments are taxed in Spain explains how a later sale would be taxed. And if one heir wants to keep the flat and pay the others their share, that isn’t a sale: what dissolving shared ownership really costs breaks it down with numbers.

You can try Cuéntamo for free at cuentamo.com.

Frequently asked questions

Why won’t the bank let me use the money in the deceased’s account?

Because the law requires banks to verify that Inheritance Tax has been paid (or that an exemption applies) before releasing funds to anyone other than the original holder. Until you prove that payment, the money stays frozen, even if you’re the rightful heir.¹

How long do I have to pay inheritance tax in Spain?

Six months from the date of death, with the option to request a further six-month extension if you ask for it within the first five months. The extension isn’t free: it accrues late-payment interest for the extra time you take.²

Which region decides how much I pay on an inheritance?

The region where the deceased was resident, not your own region as heir, and not the region where the inherited asset is located. It’s the opposite rule to buying a home, where the location of the property decides.⁹

If I inherit a flat and sell it years later, what do I pay?

You’re taxed on the difference between the sale price and the value you declared for Inheritance Tax purposes (capped at market value), using the date of death as the acquisition date.¹¹

Is the municipal capital gains tax the same as inheritance tax?

No. They’re two separate taxes: Inheritance Tax is collected by the regional government on what each heir receives, and the municipal capital gains tax is collected by the town hall, only when urban real estate is involved, on the increase in the value of its land. Both run on a six-month deadline from the date of death, but they’re filed and paid separately.³

My partner and I have a joint account. Does it all freeze when one of us dies?

It depends on the type of signature, and here it’s worth separating the rule from the practice. Under Banco de España’s guidance, on an “either signature” account the bank must keep honouring the surviving holder’s instructions without the heirs’ consent; on a “joint signature” account, freezing the whole balance is the norm, since one of the required signatures is missing. In practice, not every bank applies the “either signature” rule correctly the moment it learns of a death, and some freeze everything out of caution anyway: if that happens, you can file a complaint citing that rule.⁴

There’s no liquidity in the estate to pay the tax. Is there an alternative to taking out a loan?

Yes. If the estate has no cash or easily sellable assets available, you can ask the office that manages the tax for a deferral of up to one year or a payment plan of at most five annual instalments, as long as you request it before the payment deadline runs out. Both accrue late-payment interest, and the payment plan also requires a guarantee.⁷

State-level reduction amounts and regional rebates are revised often: check the ones in force in the region where the deceased was resident before running any numbers. The underlying mechanism (the two six-month deadlines, who decides which rules apply, how the value carries over to income tax, and the deferral routes if liquidity is short) doesn’t change with the tax calendar.

This article is checked against official sources and reviewed periodically. If you spot something outdated, write to us at [email protected].