Martín Etcheverry lives in Buenos Aires. His father died in Granada in March 2021 and left him, in equal shares with his sister Lucía, who lives in Granada, a flat in the Zaidín district. In the Inheritance Tax return the flat was valued at 120,000 €, the figure suggested by whoever handled the inheritance. In 2026 they are selling it for 230,000 €. Martín discovers that his "purchase value" is neither what his father paid in the eighties nor what the flat was really worth in 2021, but those 120,000 €, and that this is costing him money now.
The rule: the Inheritance Tax value, capped at market value
When a property is acquired by inheritance, article 36 of the IRPF Law (Spanish personal income tax), which applies to non-residents through the reference in article 24.4 of the IRNR Law (the law on non-resident income tax), requires the general rules to be applied taking as the actual amount "those resulting from applying the rules of Inheritance and Gift Tax, without their being able to exceed market value".
Put simply: the heir's acquisition value is the value given to the property for Inheritance Tax. If the regional authorities checked that value and raised it, the checked value is used. What the deceased paid at the time no longer matters. And the acquisition date is the date of death.
The costs of the inheritance act as purchase costs
Just as tax, notary and land registry fees are added in a purchase, in an inheritance the costs and taxes inherent in the inheritance paid by the heir are added, in the part relating to the property:
- The Inheritance Tax attributable to the flat, if any tax was payable.
- The notary's fee for the deed of acceptance and division of the estate, in the part relating to the flat.
- Registration at the land registry.
- The plusvalía municipal (the municipal tax on the increase in land value) paid on the inheritance.
If the estate included other assets, such as accounts or a car, the shared costs are split in proportion to the value of each asset. That split should be done with judgement and documented.
Martín's figures
Martín is non-resident; Lucía lives in Spain and declares her half in her IRPF return, so the buyer only withholds the 3 % on Martín's share.
- Inheritance Tax value of the whole flat: 120,000 €. His half: 60,000 €.
- His share of the notary and registry fees on the inheritance: 900 €.
- His share of the plusvalía municipal paid on the inheritance: 1,400 €.
- Martín's acquisition value: 62,300 €.
- His half of the sale price: 115,000 €. Less his half of the estate agent's fee, 3,450 €: a transfer value of 111,550 €.
- Gain: 111,550 − 62,300 = 49,250 €.
- Tax at 19 %: 9,357.50 €.
- The buyer's withholding: 3 % of 115,000 = 3,450 €.
- To pay with the Modelo 210 (the non-resident's tax return): 5,907.50 €.
What declaring low costs him
A valuation from the time puts the market value of the flat in 2021 at 180,000 €. Had that been the value declared for Inheritance Tax, the figures would be very different:
| Item | Declared at 120,000 € | Declared at 180,000 € |
|---|---|---|
| Martín's acquisition value, with costs | 62,300 € | 92,300 € |
| Transfer value | 111,550 € | 111,550 € |
| Gain | 49,250 € | 19,250 € |
| Tax at 19 % | 9,357.50 € | 3,657.50 € |
| Result of the Modelo 210, after subtracting 3,450 € | Pay 5,907.50 € | Pay 207.50 € |
The difference is 5,700 €. It is the usual effect of declaring an inheritance below its real value: what looks like a saving on Inheritance Tax is paid later, and sometimes more than was saved, when the property is sold. In regions with very generous reductions and rebates on Inheritance Tax, declaring low may have saved nothing at the time and still costs money on the sale.
It is possible to consider correcting the Inheritance Tax return, if it is not time-barred, to show a higher value. But that reopens a regional tax return, may generate additional tax with interest, and there is no guarantee that the new value will later be accepted on the sale. Article 36 also sets a ceiling: the acquisition value cannot exceed market value. It is a decision that needs figures and solid documentation; we do not recommend it as a general rule.
The Catastro reference value
Law 11/2021, of 9 July, changed article 9 of the Inheritance Tax Law: the value of property becomes its reference value from the Catastro (the Spanish land registry authority) at the date the tax accrues, unless the declared value is higher. That narrows the room for declaring very low values and, as a knock-on effect, limits the problem Martín has. His father died in March 2021, before that reform, so it does not affect him; someone inheriting now starts from an acquisition value that is usually closer to market value. How assets are valued in an inheritance is explained in the guide valuing assets in an inheritance.
If the flat was let after it was inherited
Had Martín and Lucía let the flat between 2021 and 2026, the minimum depreciation for those years would have to be subtracted. The base would be the acquisition value on inheritance, without the land, and the calculation follows the same rules as for a purchase. We explain it in I let the flat: does that count against me when I sell?.
If you have inherited a property and are going to sell it, you can send us the deed of inheritance, the Inheritance Tax return and the draft sale contract through the property sale form, and we will calculate the result before the signing.
The plusvalía municipal: twice, and linked
The inheritance generated a plusvalía municipal, which each heir paid. The sale generates another, which for Martín's share the buyer pays as substitute and deducts from the price. The second is calculated taking the date of death as the acquisition date. Both have an effect on the Modelo 210: the one on the inheritance adds to the acquisition value and the one on the sale is subtracted from the transfer value. This is developed in who pays the municipal capital gains tax if the seller does not live here.
Siblings living in different places
Martín and Lucía's case is common: one heir lives in Spain and the other does not. Each declares their half in their own tax: Lucía in IRPF, with its own rules; Martín on Modelo 210, at 19 %. The buyer only has to withhold on the non-resident's share, and for that Lucía has to prove her residence. How the withholding and the costs are split when there are several owners is in we are two owners: one return or two?.
What happens with this sale in Argentina is a question of Argentine law that Martín's adviser there has to confirm; we do not give an opinion on it.
If what worries you is how the inheritance itself was taxed, we deal with it in I inherit a flat in Spain as a non-resident.
If the inheritance has not yet been formalised
Some people want to sell before the inheritance is finished. It is not possible to sell as an heir without having accepted the inheritance and settled Inheritance Tax, because the notary and the land registry require it. But that sequence has an advantage: if the inheritance is pending and the sale is already agreed, the value declared for Inheritance Tax will be the acquisition value for the sale. Declaring a low value to save on Inheritance Tax and selling shortly afterwards for much more is exactly Martín's situation, with the added point that the gap between the two values may attract the attention of the regional tax authorities.
The sale of inherited property, with the acquisition value and the costs of the inheritance rebuilt, is part of the Salama Tax service for non-residents selling a property.