Inheritance Tax in Murcia: The 99% Relief for British Owners

Yes, British owners get Murcia's 99% inheritance and gift tax relief. The Region of Murcia reduces the tax due by 99% when a home passes to a spouse, registered partner, child or parent. Since a Spanish Supreme Court judgment of 19 February 2018, non-EU owners, including the UK, can apply these regional rules.

This is one of the questions I'm asked most often, and it's one of the most reassuring answers I get to give. A lot of what's still said about Spanish inheritance tax dates from the years just after Brexit, when many people assumed UK owners would be left on Spain's much less generous state scale. That isn't how it works, and for close family the tax in Murcia is very small.

What inheritance tax relief does Murcia apply?

Murcia applies a 99% bonificación (reduction) on the tax quota for Grupo I and Grupo II beneficiaries. It covers both inheritances and lifetime gifts.

Those groups are:

• Grupo I: children and adopted children under 21
• Grupo II: children and descendants aged 21 or over, spouses, registered de facto partners, parents and adoptive parents, and other ascendants

The 99% is taken off the tax due, not the value. If the calculated tax came to €20,000, the relief brings it down to €200.

Before the tax is even calculated, the state reductions apply too: €15,956.87 for Grupo II, and more for Grupo I, with additional amounts for each year a beneficiary is under 21.

Does the relief really apply to British owners?

Yes. Spanish inheritance tax is a state tax that the autonomous regions can adjust. For years the regional reliefs were limited to residents, and the European Court struck that down for EU residents.

The next question was whether the same applied to people from outside the EU, which since Brexit includes the UK. The Spanish Supreme Court answered it on 19 February 2018. It held that free movement of capital applies in relation to third countries as well, so non-EU owners can't be denied the regional rules. That position was then written into the inheritance tax law by Ley 11/2021.

In practice, a UK-resident owner of a villa in Murcia who leaves it to a spouse or child gets Murcia's 99% relief.

Which region's rules apply to my property?

For property, the connecting factor is where the home is located. A house in Murcia is assessed under Murcia's rules, wherever the owner or the beneficiary lives. So a family in Manchester or Dublin inheriting a home at Condado de Alhama or Corvera Hills is treated under Murcia's rules.

Who gets the 99% relief, and who doesn't?

The relief is for close family. Grupo III covers siblings, nephews, nieces, aunts, uncles and relatives by marriage (for example, in-laws and step-children). Grupo III does not get the 99% relief, and nor does Grupo IV (more distant relatives and people who aren't related).

If you're planning to leave your home to a brother, sister, niece or nephew, or to a friend, speak to a Spanish tax adviser early. There are sensible ways to plan for it, and the right structure depends on your family.

How much could my family actually pay?

I'm not going to give you a precise calculation, because inheritance tax genuinely depends on the individual: the relationship, the beneficiary's age, their existing Spanish assets and the property's value.

But the shape is simple. Without the regional relief, an inheritance in the hundreds of thousands could produce a bill well into five figures. With Murcia's 99% reduction on the quota, the same inheritance produces a bill in the low hundreds. That's the difference that lets families keep the house for the next generation.

Can I gift my Spanish home during my lifetime?

Yes, and the same 99% relief applies to gifts (donaciones) to Grupo I and Grupo II. There is one formal step that matters: to get the relief, the gift must be made in a public document, an escritura pública signed before a Spanish notary. A private agreement or an informal transfer won't qualify.

If the gift is money, for example to help a child buy, the escritura should also record where the funds came from. Your notary and adviser will set this out for you, and it's worth getting advice before you gift rather than after.

Do I need a Spanish will?

It isn't legally required, but most people who own Spanish property should have one, and it's quite separate from the tax.

A Spanish will covering only your Spanish assets sits alongside your UK or Irish will. It usually makes things considerably faster and cheaper for your heirs, because they don't need to translate and apostille a foreign will and grant of probate. Ask your lawyer to draft the two wills so they work together; a well-drafted Spanish will is worded so it doesn't revoke your home-country will.

The easiest time to arrange it is while you're buying, when your lawyer already has your details and you're seeing a notary anyway.

What should I check before I plan?

A short checklist keeps it straightforward:

• Confirm your beneficiaries fall into Grupo I or II.
• If you're gifting, make sure it's done by escritura pública before a notary.
• Check the relief is in force at the relevant time. Regional reliefs are set by regional budget laws and can change.
• Think about how the property is owned. Joint ownership shares, and who is on the escritura, affect what passes and to whom.
• Take advice from a Spanish tax specialist, not a general adviser.
• Make a Spanish will if you own here.

We can introduce you to independent, English-speaking lawyers who advise UK and Irish owners on exactly this (you're always free to choose your own), and an hour with one before you complete is time well spent.

FAQ

Do British owners pay Spanish inheritance tax at the state rate?

No. Following the Spanish Supreme Court judgment of 19 February 2018, non-residents from outside the EU can apply the regional rules, and this was written into law by Ley 11/2021.

What is the inheritance tax relief in the Region of Murcia?

Murcia applies a 99% reduction on the tax quota for Grupo I and Grupo II beneficiaries (children and descendants, spouses, registered partners, parents and other ascendants) on both inheritances and gifts.

Do gifts of Spanish property get the 99% relief in Murcia?

Yes, for Grupo I and II, provided the gift is made in a public document (escritura pública) before a Spanish notary. Gifts of money should also record where the funds came from.

Does the 99% relief apply to siblings, nephews and nieces?

No. Siblings, nephews, nieces, aunts, uncles and in-laws are Grupo III and do not get the 99% relief; Grupo IV beneficiaries don't either. Take advice early if you plan to leave your home to them.

Do I need a Spanish will if I own property in Spain?

It isn't legally required, but it usually makes the process much faster and cheaper for your heirs.

If you'd like to see the resorts for yourself, and talk through how ownership works for your family, I'd love to show you round. Message me on WhatsApp on +44 7424 864 684 or send an enquiry and I'll get straight back to you.

This article is general information, not legal or financial advice. Confirm your own position with a qualified Spanish lawyer or tax adviser before you act.

About the author — Lee Doherty is the founder of MedSol Real Estate. He spent two years researching the region before buying here himself, and now helps UK and international buyers find golf-resort homes across the Region of Murcia.