Mallorca Insights

Inheriting real estate on the Balearic island of Mallorca

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Millions of vacationers are drawn to Mallorca every year. At the same time, the largest of the Balearic Islands is a dream home for residents and investors. However, when properties change hands due to inheritance, this brings with it a number of challenges.

Inheriting real estate in Mallorca often involves complex issues. It becomes difficult in situations involving unclear, cross-border estates. The linchpin is ensuring that the inheritance is adequately protected. The basis for this is the European Succession Regulation (EU Succession Regulation). What does this mean for testators? If you want to avoid legal complications when bequeathing real estate, you should, conversely, be familiar with all the relevant standards of the directives.

Consequences of intestate succession

In accordance with the Inheritance Regulation, the legal system of the country in which the testator usually lived at the time of death applies to the legal succession. The only way to circumvent this principle is to make a provision in the will. If you are a German citizen, you can stipulate in your will that the inheritance of real estate is subject to German law. It is therefore all the more important to ensure that a valid will has been drawn up. In this way, estates can be clearly regulated.

If this is not the case and the inheritance laws apply to a property inheritance in Mallorca, this is rarely in the interests of the deceased. The reason is simple: in Spanish inheritance law, the rules for spouses are less favorable than in German law. This means that married persons are often in a worse position than children when it comes to succession. We know from experience that it is worth considering legal advice in good time if you wish to deviate from the statutory order of succession when inheriting property. We work successfully with the German inheritance lawyers at Porta & Associates in Palma.

Draw up a will with a lawyer in Mallorca

If you want to draw up a will and have it disposed of in accordance with German law, you can instruct a Mallorcan notary or lawyer. The latter can also notarize a will that is already valid in Germany. Both have several advantages. Notary fees are much lower than in Germany. In addition, some of the hurdles that often occur in such estate settlements can be avoided. As there is no inheritance procedure in Spain, a certificate of inheritance applied for in Germany can cause delays.

It is equally problematic if Spanish authorities do not recognize a will or have no knowledge of it. It is therefore advisable for all those who wish to bequeath a property in accordance with German law but who regularly reside in Spain to obtain a signature from a notary or to have a Spanish will drawn up immediately. This is then entered in the Spanish Register of Wills (Registro Central de Última Voluntad). In this way, the authorities will know and the estate can be settled without any obstacles.

What about inheritance tax?

Anyone who inherits a property must first pay inheritance tax in the country where the property is located. In this case, in Mallorca. How high these taxes are depends largely on the value of the property. Allowances are defined based on the degree of kinship with the deceased. If these are favorable, inheritance tax can even be avoided altogether.

It is important that all of this is preceded by a positive acceptance of inheritance, which must be notarized. Unfortunately, the passage of time or failure to act does not ensure legal certainty in this case. Various documents must be submitted, including the testator's will or dispositions. The former habitual residence and family circumstances play an important role in this.

Heirs of the property have around six months from the date of death or the declaration of death becoming legally effective to submit the inheritance tax return. Otherwise there is a risk of legal consequences. In view of the complexity and legal pitfalls, we always advise our clients to get a lawyer or tax advisor on board in the event of a property inheritance. They will ensure that the inheritance is handled properly and help to develop a strategy that optimizes the tax burden. Should the property left behind then become Sold , we are the right contact in Mallorca as a professional real estate agency with many years of experience.

Saskia Porta, a registered lawyer in the German and Spanish Bar Associations, is a recognized expert in inheritance, corporate and contract law with specialist knowledge of the Balearic Islands. She works alongside Dr. Dominic Porta, a recognized expert in international commercial law with specialist knowledge of Spanish real estate law, in his law firm in Mallorca. Here, the specialist lawyers advise clients of NEPTUNUS INTERNATIONAL Real Estate, among others, on all legal matters relating to real estate.

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