Selling an inherited property
From the inheritance to the sale: the steps in order, the deadlines you should not miss, the taxes in Madrid and how to decide when there are several heirs.
Before you start
Inheriting a home usually comes at one of the hardest moments in life. And yet it demands decisions and deadlines just when you least feel like dealing with them.
Here is, clearly and in order, what needs to be done from the moment you inherit until the property is sold. As a Court-appointed Property Valuation Expert I often value inherited homes, and I have been helping families through this process since 2014.
A summary of my guide Vender una vivienda heredada (in Spanish, with full detail and a downloadable PDF).
From inheritance to sale, step by step
Before it can be sold, the property has to be registered in the heirs' names. This is the usual route:
- 01
Certificates
Death certificate and certificate of last wills (últimas voluntades), to find out whether there is a will.
- 02
Will or declaration of heirs
Authorised copy of the will or, if there is none, a declaration of heirs before a notary.
- 03
Inventory and valuation
Which assets and debts make up the estate and what each is worth, starting with the property.
- 04
Acceptance and allocation
A deed before a notary in which the heirs accept the inheritance and share out the assets.
- 05
Taxes
Inheritance tax (Impuesto de Sucesiones) and municipal plusvalía, each within its own deadline.
- 06
Land Registry
Registration of the property in the heirs' names.
- 07
Sale
With the property in their names and the taxes paid, it can be sold as normal.
«An inherited home sells well when the inheritance has been settled well.»
The deadlines you must not miss
Deadlines run from the date of death, not from the date the inheritance is signed:
| Step | Deadline |
|---|---|
| Inheritance tax (Community of Madrid) | 6 months. Extendable by another 6 if requested within the first 5 months |
| Municipal plusvalía (town hall) | 6 months. Extendable up to one year if requested within the initial period |
| Certificate of last wills | Can be requested 15 working days after the death |
| Land Registry entry | No legal deadline, but needed in practice to sell |
Filing late means surcharges and interest and, in some cases, can make it harder to apply tax allowances. If the inheritance is going to take time, the sensible thing is to request the extensions in good time.
«In an inheritance, the calendar does not wait for the family to be ready.»
Inheritance tax in Madrid
Each heir pays on what they receive. The Community of Madrid applies very significant allowances depending on the relationship:
| Heir | Allowance on the tax due |
|---|---|
| Children and descendants, spouse and parents or ascendants | 99 % |
| Siblings, nephews, nieces, uncles and aunts (deaths from 1 July 2025) | 50 % |
| Other relatives and unrelated persons | No allowance |
In addition, if the property was the deceased's main home, close relatives can apply a 95 % reduction on its value, up to a limit of about €123,000 per heir.
Important if you plan to sell: that reduction requires keeping the property for 5 years. If it is sold earlier, the reduction is lost and the difference has to be paid. Work it out before deciding when to sell.
«In Madrid, most children and spouses pay very little to inherit. What matters is not to lose that benefit through a timing mistake.»
The value you declare matters
The inheritance must declare the real value of the property. The tax authorities use the Catastro reference value (valor de referencia) as a minimum, but that value does not always match the market value.
If you declare a low value
- You pay slightly less on the inheritance, although with the 99 % allowance the difference is usually small
- When you sell, the gain will be larger
- And you will pay more income tax on the sale
If you declare the real value
- Inheritance tax hardly changes in Madrid
- When you sell, the gain will be the real one
- And you will pay the income tax that applies, with no surprises
That is why, for close relatives in Madrid, declaring a value in line with the market is usually the most advantageous option. A well-founded professional valuation also protects you if the tax authorities review it.
Expert valuation report
As a Court-appointed Property Valuation Expert (Perito Judicial Inmobiliario, RAIN no. 98), if your case needs an expert valuation report to present to the Spanish tax authorities or in court, I can prepare it for you. It is a service I only offer to property owners I am already working with, as part of my advice.
«The value declared in the inheritance is also the starting point of the future sale.»
Municipal plusvalía: when inheriting and when selling
On top of inheritance tax, the heirs must pay the town hall the municipal plusvalía (tax on the increase in land value) for the time the deceased owned the property. It is paid to the town hall where the property is located, within 6 months, extendable up to one year.
- It can be calculated with the objective method (cadastral value and years of ownership) or the real method (actual gain). The more favourable one applies.
- If there has been no gain, nothing is payable, although it has to be proven.
- Some town halls, including Madrid, grant a reduction when the deceased's main home is inherited by close relatives. Check each municipality's bylaw.
When the inherited property is later sold, a new municipal plusvalía arises for the time the heirs have owned it. They are two different taxes worth planning for.
When there are several heirs
Most often the property is inherited by siblings. None of them can sell it alone: everyone has to agree. These are the options:
Sell and share
- The most common option
- Each heir receives their share of the price
- Requires agreement on price and terms
One buys out the others
- One heir keeps the property
- Compensates the others in cash
- Usually done through a dissolution of co-ownership (extinción de condominio)
Keep it jointly
- For example, to rent it out
- Requires agreement on costs and decisions
- Best put in writing
The dissolution of co-ownership is usually taxed under stamp duty (Actos Jurídicos Documentados), 0.75 % in Madrid on the share acquired. It is cheaper than buying the siblings' share as a sale, which would be taxed under transfer tax (ITP).
If there is no agreement, any heir can ask a court to divide the property. If it cannot be divided, it ends up at auction, usually at a price well below market value. Reaching an agreement is almost always better for everyone.
«An independent valuation is the best basis for siblings to reach an agreement.»
If there is a usufruct
It is very common for the surviving spouse to receive the usufruct of the home (the right to use it for life) and for the children to receive the bare ownership.
- To sell the whole property, the usufructuary and all the bare owners must sign.
- The price is shared between the usufruct and the bare ownership.
- For tax purposes, a lifetime usufruct is worth a percentage that depends on the usufructuary's age: 89 minus their age, with a minimum of 10 %. At 70, for example, the usufruct represents 19 % of the value and the bare ownership 81 %.
- It is also possible to sell only the bare ownership, with the usufructuary keeping the right to live in the home. It is a market of its own, usually investors, at a lower price.
«When there is a usufruct, the sale is decided as a family and shared out with clear figures.»
Selling the inherited property
Once the inheritance is settled, the sale follows the usual process, with a few particularities. It helps to have ready:
- Deed of acceptance and allocation of the inheritance
- Land Registry entry in the heirs' names
- Proof of payment of inheritance tax and plusvalía
- Latest IBI (property tax) receipt and community of owners certificate
- Energy performance certificate
- The property emptied, clean and presentable
- Written agreement between the heirs on price and how it is shared
- A single point of contact for the sale
For income tax, each heir pays on the gain: the difference between their share of the sale price and the value at which they inherited, plus the costs and taxes paid on inheriting and selling. If an heir lives outside Spain, the sale can still go ahead, but they will need an NIE and, if they cannot attend the signing, a power of attorney; and on the sale the 3 % non-resident withholding applies to their share.
«A well-documented inheritance sells sooner and without surprises at the notary.»
Common mistakes
MythNothing needs to be done until we sell.
FactThe inheritance tax and plusvalía deadlines run from the date of death, whether or not the property is sold.
MythThe lower the value we declare, the better.
FactIn Madrid, for close relatives, it is usually the opposite: you would pay more income tax when you sell.
MythWe apply the main-home reduction and sell straight away.
FactIf it is sold within 5 years, the reduction is lost and has to be repaid.
MythOne of the siblings can just sell their share.
FactThey can sell their share, but hardly anyone buys a share. Selling the property requires everyone's agreement.
MythIf we cannot agree, the judge will sort it out.
FactCourt division usually ends in an auction, at a price well below market value.
How I can help
I accompany families through the whole process, with discretion and method, so that the inheritance does not become a problem.
- 1A well-founded valuation of the property
- 2The steps and deadlines in order
- 3Coordination with the notary and advisers
- 4A single point of contact for the heirs
- 5Preparing and selling the property
- 6Support all the way to the notary
My work does not replace that of your lawyer or tax adviser: it complements it. I make sure the property has a well-founded value, that all the heirs have the same information and that it is sold on the best terms.
«I don't sell, I advise.»
Frequently asked questions
What is the deadline for inheritance tax in Madrid?
Six months from the date of death, extendable by another six if the extension is requested within the first five months. Municipal plusvalía also has a six-month deadline, extendable up to one year if requested within the initial period.
How much do children pay to inherit a property in Madrid?
Very little in most cases: the Community of Madrid applies a 99 % allowance on the tax due for children and descendants, spouses and parents. If the property was the deceased's main home, they can also apply a 95 % reduction on its value, up to about €123,000 per heir, which requires keeping the property for five years.
Can an inherited property be sold within five years?
Yes, but if the 95 % main-home reduction was applied, selling within five years means losing that reduction and paying the difference. Work it out before deciding when to sell.
What value should be declared when inheriting a property?
The real value. For close relatives in Madrid, declaring a value in line with the market is usually the most advantageous: inheritance tax hardly changes and, on the sale, the gain and the income tax are the real ones. A well-founded valuation also protects you if the tax authorities review it.
What happens if one heir does not want to sell?
Selling the whole property requires everyone's agreement. The alternatives are for one heir to buy out the others, usually through a dissolution of co-ownership, or to keep it jointly with written rules. Without agreement, any heir can ask a court to divide it, which usually ends in an auction at a price well below market value.
General information, updated in November 2026 under the rules of the Community of Madrid and Spanish law. It does not replace advice from your lawyer or tax adviser on your specific case.
Shall we talk about the inherited property?
I will prepare a market analysis and a tailored strategy, with no obligation, so that all the heirs decide with the same information.