Inheritance Tax in Malaga – Complete 2025 Guide for Residents and Non-Residents: How much cost to inherit - simulation

Málaga is one of Málaga’s most prestigious real estate markets, attracting buyers from across Europe, the Middle East, the Americas, and beyond. Its year-round sunshine, vibrant lifestyle, and luxury property market make it a top choice for international investors and second-home owners. However, owning property here also means you should understand what happens if that property is inherited — and more importantly, how the Inheritance Tax in Málaga works. As a tax lawyer in Málaga, I have seen how the right planning can save heirs tens or even hundreds of thousands of euros. In Andalusia, where Málaga is located, direct family members often benefit from a 99% relief on the Inheritance Tax. But applying that relief is not automatic — you must meet certain conditions, file in the correct place, and use the right law. This is where estate planning in Málaga becomes essential, both for residents and for non-residents who own property here.

Jacob Salama

8/11/20253 min read

Understanding the Inheritance Tax in Malaga

The Inheritance Tax in Malaga is not set by the Spanish central government alone. Malaga’s tax system is partially decentralised, which means the Autonomous Communities — in this case, Andalusia — have the power to set their own allowances, reductions, and tax rates.

That’s why Inheritance Tax in Malaga can be dramatically different from the same tax in Madrid, Valencia, or Catalonia. The regional rules in Andalusia are among the most favourable in Malaga for direct family members.

How the 99% Relief Works in Malaga

If you inherit from a parent, child, or spouse in Malaga and both the deceased and the heir meet the residency conditions, Andalusia offers:

€1,000,000 allowance per heir for close family members (Group I and II).
99% relief on the tax payable after that allowance.

This means that if the inherited value is below €1,000,000, the Inheritance Tax in Malaga will often be zero. Even if the value is above that, the 99% relief reduces the final bill to a fraction of the original amount.

Example: Inheriting a €500,000 Villa in Malaga

Imagine you inherit a detached villa in Malaga worth €500,000:

Scenario A – Andalusian rules (99% relief):
- Personal allowance = €1,000,000 → taxable base: €0
- Inheritance Tax payable: €0
- Municipal plusvalía tax (with 95% reduction): ~€810
Scenario B – No regional relief (national rules):
- National allowance: ~€16,000 → taxable base: €484,000
- Tax: ≈ €100,000
- Plusvalía without reduction: ≈ €16,200

Difference: €810 vs. €116,200.

This example shows why it’s so important to know which law applies, especially for non-residents. A tax lawyer in Malaga can ensure you apply the most favourable rules.

Municipal Capital Gains Tax (Plusvalía) in Malaga

In addition to the Inheritance Tax in Malaga, there’s the municipal capital gains tax, known as plusvalía municipal. This tax is based on the increase in the cadastral value of the land from when it was acquired until the inheritance date.

Malaga Town Hall offers a 95% reduction for direct heirs inheriting the family home. Without it, the tax can be thousands of euros higher. Claiming this reduction requires specific documentation and timely filing.

Applicable Law for Residents and Non-Residents

One of the most important — and misunderstood — aspects of the Inheritance Tax in Malaga is determining which regional law applies and which tax authority is competent.

1. If the deceased was resident in Malaga

Apply the law of the Autonomous Community where they lived in the last 5 years.
For a deceased resident in Malaga, Andalusian law applies.
Filing is with the Andalusian regional tax office.

2. If the deceased was not resident in Malaga

Since the 2015 EU Court of Justice ruling, heirs resident in the EU/EEA can apply the law of the Autonomous Community where the asset of greatest value in Malaga is located.
If that asset is in Malaga, Andalusian law applies (99% relief).
Filing is with the Spanish State Tax Agency (AEAT), Non-Residents Department.

3. Both deceased and heir non-residents

Same as above: apply the law where the Spanish property is located.
If in Malaga, use Andalusian rules and file with AEAT.

4. Non-EU/EEA residents

Spanish Supreme Court has extended regional law application to non-EU residents to avoid discrimination.
This means heirs in the US, Canada, or Australia can benefit from the Andalusian 99% relief if the property is in Malaga.

Why Estate Planning in Malaga Is Critical

Many international owners of property in Malaga fail to consider the tax consequences for their heirs. Without proper estate planning in Malaga, their beneficiaries might face unnecessary taxes, delays, and legal complications.

Estate planning strategies may include:

Reviewing ownership structure (individual, joint, corporate).
Making lifetime gifts under favourable rules.
Preparing wills in Malaga to avoid cross-border conflicts.
Ensuring heirs know which law applies and where to file.

A tax lawyer in Malaga experienced in cross-border estates can design a plan that minimises taxes while complying with both Spanish and international law.

Common Mistakes to Avoid

Assuming national rules apply automatically – In reality, regional rules can reduce tax dramatically.
Missing the filing deadline – Inheritance Tax in Malaga must generally be filed within 6 months of death (extensions available).
Not appointing a fiscal representative – Required if you are a non-resident heir.
Failing to claim municipal reductions – The 95% plusvalía reduction is not applied automatically.

Required Documentation for Inheritance in Malaga

Death certificate
Will or declaration of heirs
Title deeds of the property
Cadastral certificate (certificación catastral)
Proof of relationship (birth or marriage certificate)
NIE (foreigner identification number) for heirs
Tax forms (Model 650 for AEAT, regional forms for Junta de Andalucía)

A tax lawyer in Malaga can coordinate this process, avoiding costly mistakes and ensuring all deadlines are met.

Conclusion

The Inheritance Tax in Malaga can be almost zero with proper planning and the correct application of Andalusian rules — or it can be over €100,000 if those rules are not applied. For non-residents, the key is knowing whether you can opt for Andalusian law and ensuring you file with the right authority.

Estate planning in Malaga is not just for the wealthy — it’s for anyone who owns property here and wants to protect their heirs from unnecessary taxes.

If you have inherited property in Malaga or want to plan your estate, contact a qualified tax lawyer in Malaga to guide you through the process, ensure compliance, and take full advantage of the generous tax reliefs available.

This article is for informational purposes only and does not constitute legal advice.