The process can be relatively simple when there is a single heir and all the documentation is in order, but it can become more complicated if several people are involved, there are charges on the property or the inheritance procedure has not yet been completed.
Below we explain how to sell an inherited property and what to check before putting it on the market.
Procedures for selling an inherited house
The steps may vary depending on the circumstances of each inheritance, but several actions generally need to be completed before the sale can go ahead.
Obtain the death certificate
The death certificate (certificado de defunción) officially proves the death of the owner and allows the inheritance procedures to begin.
It is one of the first documents needed to later apply for the certificate of last wills and continue with the inheritance process.
Apply for the certificate of last wills
This document (certificado de últimas voluntades) shows whether the deceased made a will and before which notary.
If there is a will, an authorised copy must be obtained to find out who has been named as heirs and how the estate should be distributed.
If there is no will, the legal heirs must be determined through the corresponding procedure.
Accept and allocate the inheritance
Once the heirs and the assets that make up the estate have been identified, the inheritance must be accepted and allocated.
Acceptance can be express or tacit, although formalising it before a notary is usual when the estate includes property. The allocation (adjudicación) determines which assets correspond to each heir.
If the property goes to several heirs, each one will hold the share established in the division of the estate.
Pay the Inheritance and Gift Tax
Acquiring a property through inheritance is subject to the Inheritance and Gift Tax (Impuesto sobre Sucesiones y Donaciones).
The amount depends on various factors and, as it is a tax devolved to the regions, there are differences between autonomous communities.
As a general rule, the deadline for filing for an acquisition on death is six months from the date of death. Where the tax is managed by the State Tax Agency (Agencia Tributaria), an extension can be requested within the first five months.
Pay the municipal capital gains tax where applicable
When an urban property is inherited, you must also check whether there is an obligation to pay the Tax on the Increase in Value of Urban Land, commonly known as plusvalía municipal.
For transfers on death, the general rules set a deadline of six months from the date of death, which can be extended to one year at the request of the taxpayer.
The specific assessment will depend on the characteristics of the transfer and on the regulations of the municipality where the property is located.
Update the property’s status in the Land Registry
Once the inheritance has been allocated and the corresponding tax procedures completed, it is advisable to check that the property’s entry in the Land Registry (Registro de la Propiedad) correctly reflects who its new owners are.
This will make the sale easier later on and will allow the buyer to verify who has the right to sell the property.
Before putting it on the market, it is also advisable to request a land registry extract (nota simple) to check ownership and detect any mortgages, seizures or other charges. The Spanish Notaries’ Association (Notariado) recommends checking this information especially carefully when the sellers are heirs of the deceased owner.
What documents you need to sell an inherited property
Once the inheritance has been processed, it is a good idea to gather both the inheritance documents and those needed to complete the sale.
In addition to the inheritance documents, it is important to check that the property’s registry, tax and cadastral situation is in order before finding a buyer.
The documents and points to review include:
- Death certificate.
- Certificate of last wills.
- Will or declaration of heirs.
- Deed of acceptance and allocation of the inheritance, where applicable.
- Proof of payment of the Inheritance and Gift Tax.
- Documents relating to the municipal capital gains tax (plusvalía) on the inheritance.
- Land registry extract (nota simple).
- Any mortgages, seizures or other charges.
- Cadastral reference and whether it matches the actual property.
- Latest IBI (property tax) bill.
- Energy performance certificate.
- Certificate from the community of owners, where applicable.
- Documentation of renovations, extensions or annexes.
- Identification of garages, storage rooms, plots or other items included in the sale.
You should also check that all the owners are correctly identified and that they are in agreement when the property belongs to several heirs.
You can find more details about the documents needed to sell a property before starting the process.
Having all this information ready helps to detect possible issues and avoids delays when a buyer appears.
What taxes are paid when selling an inherited property
Receiving the property and selling it later are two separate transactions for tax purposes. Once the inheritance has been processed, the sale may give rise to new obligations for the seller.
Before completing the sale, it is also advisable to check that the IBI of the property is correctly identified and paid up to date.
The sale may generate a capital gain or loss that must be taken into account in personal income tax (IRPF).
How the capital gain on an inherited property is calculated
For a property acquired through inheritance, the acquisition value is not simply the price the deceased paid for it at the time.
As a general rule, the capital gain is calculated starting from the value resulting from the Inheritance and Gift Tax rules, with the corresponding adjustments for certain expenses, taxes and investments that can be included.
The transfer value starts from the amount obtained from the sale and can be adjusted for certain expenses and taxes associated with the sale that have been paid by the seller.
It is therefore important to keep the inheritance documents and the receipts for the related expenses.
Selling an inherited house in Cumbre del Sol
Once the inheritance procedures have been completed and the property documents reviewed, the property can be put on the market.
At Cumbre del Sol Pre-Owned we can help you prepare the sale, value the property and coordinate the different steps needed to take the transaction through to signing.
If you are thinking of selling a property in Cumbre del Sol, contact our team to find out the next steps.
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