Spanish Inheritance Tax for Non-Residents in Andalucia 2026: the 99% Bonificacion Explained

Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones, or ISD) terrifies non-resident owners of Costa del Sol property, yet for heirs in Andalucia the bill is often a fraction of what the headlines suggest. Since 11 April 2019 (Decreto-ley 1/2019, later consolidated in Ley 5/2021), Andalucia applies a 99% bonificacion on the ISD cuota for direct family heirs, and after a decade of European and Spanish court rulings, non-residents can access the same relief as residents. A non-resident child inheriting a EUR 500,000 Marbella apartment typically owes under EUR 1,000 in tax, not the five-figure bill that the state tariff alone would produce.

What is the 99% bonificacion and who qualifies in Andalucia?

The 99% bonificacion is a regional relief on the ISD tax cuota (the tax payable after the progressive tariff is applied to the taxable base), introduced by the Junta de Andalucia and consolidated in Ley 5/2021. It applies to heirs and legatees in Groups I and II, which under article 20 of the state ISD law (Ley 29/1987) cover descendants under 21 (Group I), and descendants aged 21 and over, the spouse, ascendants and adoptants (Group II). For deaths on or after 1 January 2022, those heirs also receive a EUR 1,000,000 reduction on the taxable base before the tariff is even applied, which means most family inheritances fall below the threshold entirely.

The bonificacion sits on top of the state-level ISD framework. The state law (Ley 29/1987) sets the progressive tariff and the kinship groups, while the regional law (Ley 5/2021) layers in the bonificacion and the EUR 1,000,000 reduction. The Junta de Andalucia’s own tax agency, ATRIAN, publishes the full schedule of benefits on its official page, confirming that the bonificacion is 99% of the cuota for Group I and II heirs, and that it covers both inheritances and life insurance payouts.

How can a non-resident access the Andalucia bonificacion?

The path to equal treatment runs through the Court of Justice of the European Union. In its 2014 ruling (Case C-127/12, the Welte case), the court held that Spain’s practice of taxing non-residents under the state ISD rules while letting residents apply their region’s bonificaciones breached the EU freedom of movement of capital. Spain responded with Ley 26/2014, which lets non-residents apply the regional legislation where the connection point (the location of the inherited assets, or the deceased’s last Spanish residence) points to a particular autonomous community.

The Spanish Supreme Court later extended the principle beyond EU citizens. Ruling on non-EU heirs, the court found that denying them the regional bonificaciones while granting them to EU non-residents was itself discriminatory under the free movement of capital. The practical result: a non-resident child in the UK, US or Norway inheriting a Marbella property now applies the same 99% bonificacion as a resident child in Malaga, provided the inherited property is in Andalucia and the heir qualifies under Group I or II.

How much tax would a non-resident pay on a EUR 500,000 Marbella property?

The worked example below traces a typical case: a non-resident adult child inherits a EUR 500,000 Marbella apartment from a parent. The heir is in Group II, so the EUR 1,000,000 reduction applies to the base, and the 99% bonificacion applies to the cuota.

Step	Calculation	Amount
Inherited property value	Market value (or cadastral reference value if higher)	EUR 500,000
Less: Group II reduction (Ley 5/2021)	EUR 1,000,000 cap	EUR 0 taxable base
ISD cuota before bonificacion	State tariff on EUR 0	EUR 0
99% bonificacion	99% of EUR 0	EUR 0
Effective tax payable		EUR 0

In this case the EUR 1,000,000 reduction alone zeroes out the tax, so the bonificacion is not even needed. The bonificacion matters when the inheritance exceeds EUR 1,000,000. For a EUR 1,500,000 property inherited by a Group II heir, the first EUR 1,000,000 is reduced, leaving EUR 500,000 of taxable base. The state progressive tariff (per the Junta de Andalucia’s published ISD scale) produces a cuota of roughly EUR 80,655 on EUR 398,777.54 plus 31.75% on the remaining EUR 101,222.46, totalling approximately EUR 112,791 before the bonificacion. The 99% bonificacion reduces that to roughly EUR 1,128. That is the real headline: a EUR 1.5M inheritance costs about EUR 1,100 in ISD, not EUR 112,000.

What is Modelo 650 and when does a non-resident file it?

Modelo 650 is the self-assessment form for ISD on acquisitions mortis causa, filed by the heir with the Agencia Tributaria (the state tax authority). Non-residents file it with the National Tax Management Office for Non-Residents in Madrid, not with the regional Andalucia tax office, because non-resident ISD is administered centrally by the AEAT even when the regional bonificacion applies.

The filing deadline is six months from the date of death, confirmed on the Agencia Tributaria’s official Form 650 deadline page. An extension of a further six months is available, but the request must be submitted within the first five months of the initial period. Non-EU heirs must appoint a Spanish-based tax representative to handle the filing and act as the point of contact for the AEAT; EU and EEA heirs are not required to but usually do, because the paperwork demands a Spanish NIE, apostilled foreign documents and a sworn Spanish translation of any document not issued in Spanish.

The Agencia Tributaria’s documentation page lists the mandatory papers: the original or certified deed of acceptance of inheritance, the death certificate, the certificate from the General Registry of Last Will Acts (even if negative), a copy of the will or declaration of heirs, and for property, the IBI receipt or a simple registry note. Foreign-issued documents must carry a Hague Apostille and a sworn translation.

Who does NOT qualify for the 99% bonificacion?

The bonificacion is narrow. It covers Groups I and II only, so the following heirs fall outside it and pay the full state ISD tariff on their taxable base:

Heir relationship	ISD group	Bonificacion?	Base reduction
Child or grandchild under 21	Group I	Yes (99%)	EUR 1,000,000
Child, grandchild, spouse, parent	Group II	Yes (99%)	EUR 1,000,000
Sibling, nephew, niece, in-law	Group III	No	EUR 10,000
Non-relative, unmarried partner	Group IV	No	None (state default)

A sibling inheriting a EUR 500,000 Marbella apartment receives only the EUR 10,000 Group III reduction, leaving EUR 490,000 of taxable base. The state progressive tariff produces a cuota well into five figures, and no regional bonificacion applies. Unmarried partners (parejas de hecho) registered in Andalucia may qualify under the article 26 assimilation rules in Ley 5/2021, but unregistered partners do not. This is where succession planning matters: a Spanish will that directs the property to a qualifying Group II heir can reframe the entire tax bill.

How does the Andalucia bonificacion interact with the state ISD tariff?

The ISD calculation is a two-stage process: first the state tariff produces a cuota, then the regional bonificacion reduces it. The state tariff (article 21 of Ley 29/1987, published by the Junta de Andalucia) is a progressive scale running from 7.65% on the first EUR 7,993.46 of taxable base up to 36.50% on amounts above EUR 797,555.08. The cuota is then multiplied by a kinship coefficient, which is 1.0000 for Groups I and II under the current rules, and higher for Groups III and IV.

The Andalucia bonificacion sits at the very end of the chain. It does not change the tariff, the base or the coefficient; it cuts the final cuota by 99%. For a Group II heir inheriting above the EUR 1,000,000 reduction threshold, the mechanic is: apply the EUR 1,000,000 reduction to the base, apply the state progressive tariff, apply the kinship coefficient, then apply the 99% bonificacion to the resulting cuota. The heir pays the remaining 1%.

Does the bonificacion apply to gifts as well as inheritances?

Yes, but with conditions. The Junta de Andalucia confirms that for adquisiciones inter vivos (gifts between living people), the same 99% bonificacion applies to Groups I and II, provided the gift is formalised in a public deed (escritura publica) and, for cash gifts, the origin of the funds is justified. Informal bank transfers do not qualify. The bonificacion for gifts is a powerful estate planning tool, because it lets a parent transfer a Marbella property to a child during their lifetime with the same 99% relief as on death, but the formalisation cost (notary and registry fees) must be weighed against the benefit.

The bonificacion does not apply to assets outside Andalucia. A non-resident heir inheriting a property in Madrid and a bank account in Andalucia would apply the Andalucia bonificacion only to the Andalucia-linked assets, and the Madrid regional rules (which have their own, different bonificaciones) to the Madrid property. The connection point for non-residents is the location of the assets, not the heir’s residence.

What should a non-resident property owner do now?

Three steps make the difference between a manageable bill and a costly surprise. First, make a Spanish will (testamento abierto) that names the qualifying Group II heirs; without one, intestate succession can route the property to heirs who fall outside the bonificacion. Second, keep the property’s IBI receipt and a current nota simple from the Land Registry, because the Modelo 650 filing requires both. Third, brief your heirs on the six-month deadline and the representative requirement, so that when the time comes the filing is not late and the extension is not needed.

For owners also navigating annual non-resident holding taxes (Modelo 210, IBI and wealth tax), the ISD picture is the third layer of the Spanish tax stack. The cost of buying covers the acquisition layer, ITP in Andalusia covers the transfer tax, and non-resident CGT covers the exit. Inheritance tax is the fourth and final one, and for most family heirs in Andalucia it is the smallest of the four.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.