Inheritance Tax in the Valencian Community

You are obliged to file and pay the Gift and Inheritance Tax in the Valencian Community in the following cases:

Inheritance:

If the deceased had his habitual residence in the Valencian Community for the longest period of time in the last 5 years prior to death.

As an exception, when the taxpayer and/or deceased are not residents in Spain, the presentation is made at the State Tax Administration Agency (AEAT).

Gifts:

When the donation received is, for example, money (personal property) and you reside in the Valencian Community for the greatest number of days in the last five years, you must pay taxes in said Community.

When what is donated is, for example, a flat (real estate) you will have to pay taxes in the Valencian Community, regardless of where you live, as long as it is in Spain.
We focus on Inheritance Tax in the Valencian Community, which is when the deceased person from whom you receive something in inheritance resided in said Community.

Who pays the Inheritance Tax in the Valencian Community?

The heirs and legatees who receive the inheritance or legacy, even if they reside outside the Valencian Community.

The beneficiaries of life insurance contracts in the event of the death of the insured.
Deadline for presentation of the Inheritance Tax in the Valencian Community

The term to file the tax is 6 months, counted from the day of death.

Can I request an extension? Yes. An extension may be requested for another 6 months, within the first 5 months of the submission period.

The extension will be understood as granted if, once requested, 1 month elapses without receiving a reply.

However, during the extension period, default interest will accrue.

Reductions in the Valencian Community are:

Once the tax base has been calculated (value of inherited assets – debts and deductible expenses) the following reductions in the tax base may be applied:

1.- Reduction due to the degree of kinship

Group I.- To descendants (children, grandchildren, great-grandchildren …) and adopted children under 21 years of age, 100.00 euros, plus 8,000 euros for each year less than 21 that the heir has. It may not exceed 156,000 euros.

Group II.- In the case of descendants and adoptees over 21 years of age, spouse or common-law partner, ascendants and adopters, 100,000 euros.

2.- Disability reduction

The amount of the reduction depends on the degree of disability:

If the heir or legatee has a physical or sensory disability, with a degree of disability equal to or greater than 33%, a reduction of 120,000 euros is applied.
If the heir or legatee has a mental disability, with a degree of disability equal to or greater than 33% or a physical or sensory disability, disability equal to or greater than 65%, a reduction of 240,000 euros is applied.
3.- Reduction for the acquisition of the habitual residence

A reduction of 95% of the value of the deceased’s habitual residence may be applied to the tax base, with a limit of 150,000 euros, provided that:

The home is kept for 5 years following death, unless the purchaser dies within that period.
The heirs or legatees are the spouses, ascendants, descendants, or collateral relatives (brothers, uncles, nephews …) over 75 years of age who have lived with the deceased during the 2 years prior to death.

4.- Reduction of 99% for the transfer of individual agricultural company, or individual company or family business or of shares in certain entities

Law 9/2019, of December 23, in force since January 1, 2020, increases the percentage of reduction from 95% to 99%.

The beneficiaries must be the spouse, descendants, adoptees, ascendants, adopters or collateral relatives, up to the third degree, of the deceased.

In addition, other requirements must be met.

5.- Reduction due to transmission of historical artistic heritage

This reduction will be possible as long as they are assigned for their exhibition, with the conditions established by law.

The reduction will be, depending on the period of assignment of the asset, the following:

95% of the value of the property, for assignments of more than 20 years.
75% of the value of the asset, for assignments of more than 10 years.
50% of the value of the property, for assignments of more than 5 years.

6.- Reduction for the acquisition of farms located in the Valencian Community or elements related to the farms.

For deaths that occurred since March 7, 2019, a reduction of 99% of the value will be applied, for acquirers up to the third degree of collateral kinship.

The beneficiary must be a professional farmer and maintain the farm for 5 years.

7.- Reduction for the acquisition of rustic properties located in the Valencian Community

A reduction of 99% will be applied to deaths that have occurred since March 7, 2019.