taxes

How does Spanish inheritance tax work for Belgian property owners?

Inheritance tax on Spanish property owned by Belgian nationals is a complex area that requires careful planning, as both Spain and Belgium may assert tax claims.

Here is what Belgian property owners need to understand.

In Spain, inheritance tax (Impuesto sobre Sucesiones y Donaciones) is levied on the beneficiary (heir), not the estate.

The tax rate is progressive, ranging from 7.65% to 34%, with multipliers based on the relationship to the deceased and the heir's pre-existing wealth.

The Valencian Community (which includes the Costa Blanca) offers certain regional allowances, including a €100,000 reduction for close relatives (spouse, children, parents).

In Belgium, inheritance tax (erfbelasting in Flanders, droits de succession in Wallonia/Brussels) is also levied on worldwide assets of Belgian residents.

The key issue is that there is NO bilateral inheritance tax treaty between Spain and Belgium.

This means double taxation is possible.

However, Belgian law provides a unilateral tax credit: Belgian heirs can deduct the Spanish inheritance tax paid from their Belgian inheritance tax liability on the same Spanish assets.

This effectively prevents full double taxation, though the credit is limited to the Belgian tax that would otherwise be due.

Planning strategies for Belgian owners include: owning property jointly with a spouse (each spouse's share passes separately), considering the use of a Belgian or Spanish will (or both) to ensure wishes are clear, exploring usufruct structures, and in some cases evaluating ownership through a Belgian company (though this has become less tax-advantageous).

WOW-Estates strongly recommends consulting with a specialist cross-border tax advisor who understands both Spanish and Belgian inheritance law.