Inheritances are one of the main niche listings for a real estate agency, and so, we have seen almost all possible casuistic around this matter in our years of experience in this profession. That is the reason for writing this article, giving our vision and some peace of advice about the way of managing an inheritance, and using as a guide for anyone who needs it.
Starting from this is an important legal act -and therefore it requires legal advice-; and counting with more than one owner in the majority of the cases, the different personal and family circumstances of each one, it will affect the development of the operation (different residential places, diversity of opinions and criteria, different economy circumstances, etc); and not talking about if the relationship between them is better or worse -because «it is the same everywhere you go»-. So many times, they force us to act more than just real estate agents, but as family mediators.
Bellow, in this article we are going to highlight, what things are convenient to have into account by the time of selling a house, if we want to leave our home as a legacy or if we have directly inherited it.
Certainly, one of the main mistakes is not planning it in advance, either because there is no testament -which is something that does not cost more than 100 €-, or because although it is already done, it has not been updated as the family circumstances have been evolving. If this is the case, the law establishes which legitimacy part will correspond with each family member.
In addition, the possibility exists of leaving the inheritance while they are still alive, or even selling and then sharing it -which is always the most recommendable choice- because it is tax exempt up to 99% of paying, but only when it is between parents and children and the money received goes for buying their first house.
Another option that is still more conservative, is that the parents buy any property and give the ownership directly to their children, with the purpose of avoiding that future charge, once they died.
In Spain, the Inheritance and Gift Tax is ceded to the Autonomous Communities and it is liquidated through the Form 650 -which can be downloaded from the following link-. That payment is done by the format of auto-liquidation for the acquisitions “mortis causa”, and the tax rate will depend on the Autonomous Community where the deceased person lived.
In some Communities you are exempt almost a 100%, while in other regions like Andalusia, from 1st of January this year -the date of the Law reform-, we are exempt of payment, if the amount is below one billion euros, and the degree of kinship is 1 or 2 (spouses, parents and children). For the rest (siblings, cousins, nieces or nephews, etc), it is still necessary to pay the tax for receiving the inheritance.
On the other hand, we have the Municipal Value Added Tax, paying the difference between the price payed for the acquisition of the property and its inherited value. Nevertheless, this tax is currently in reform process, and it can be avoided when the owner sells the property under its price. What specialized lawyers are recommending, is paying the fine and then lodge the application asking for a refund, but you have to liquidate it in 30 business days from the conveyance signature.
For further information about it, you can read the article Municipal Added Value Tax. Do I have to pay it? that we published before, where all of this is explained in a more detailed way.
The Civil Code says that both the acceptance and the resignation are voluntarily and free acts, so it could be done in any moment. Although, if it is done thirty days after the decease, it is directly understood that you are accepting the inheritance. So, it is recommendable accepting the inheritance with benefit of inventory in the presence of a notary, accomplishing the timing included in the Civil Code, keeping the right to deliberate and resign once the inventory is finished.
Yet, once the inheritance is adjudicated, the time for liquidating the Inheritance Tax, in terms explained above, it will be within six months from the death of the deceased.
First of all, they will be asking for the death certificate at the Civil Registration. Following, and depending if the deceased made his will or not, they will have to draw up a Declaration of Heirs, for which a certificate must be asked at the “Registro General de Actos de Ultima Voluntad”, which can be done directly from the notary, or through any office administered by de Ministry of Justice.
In this sense, if the deceased made his will, it is recommendable to attend the notary where he or she made it, and talk with them, ask for the whole information and then, knowing where to start.
Once the acceptance procedure is finalized, we only need to receive the assets and register them in our name, which must be done in the Land Register.
Well, once we have detailed the bureaucratic process of an inheritance, we see how for a person who is not dealing with these matters in his/hers daily basis and does not have knowledge about this topic, it can become a real nightmare; and depending on how the relationship is among the heirs, it could even create a controversy both in the assets sharing and in the tasks or the responsibility that each of them assume they have. So, I always recommend putting in the hands of someone with enough expertise, that guaranties that this procedure goes along in the most fast and safe way.