Inheritance and Succession Planning for Mallorca Property Owners: What You Need to Know in 2026

Owning a property in Mallorca is one of the most rewarding decisions many of our clients make. It is also one that carries legal and financial implications that extend well beyond the purchase itself — and one of the most important of those implications concerns what happens to the property when you are no longer here. Inheritance and succession planning for property held in Spain is a topic that surprises many international owners, both in its complexity and, increasingly, in how favourably the rules now operate in the Balearic Islands for direct family members.

This guide explains the framework as it stands in 2026: how Spanish inheritance law works, how it interacts with the law of your home country, what the Balearic Islands offer in terms of inheritance tax, and what practical steps property owners should take now rather than leaving the matter to their heirs to sort out later.

The Starting Point: Spanish Law Applies to Spanish Property

The fundamental principle is straightforward. If you own property in Spain, Spanish law governs what happens to that property when you die. This applies regardless of your nationality, regardless of where you are resident at the time of death, and regardless of what your will at home says. A UK will, a German will or a French will has no automatic authority over a Spanish asset. Your heirs will need to deal with the Spanish legal and tax system, and they will need to do so within specific time limits.

That said, EU Regulation 650/2012 — sometimes called Brussels IV — introduced an important tool for European Union citizens. Under this regulation, citizens of EU member states can elect, in their will, for the succession law of their nationality to govern their estate rather than the law of their country of residence. A German national habitually resident in Mallorca can therefore elect for German succession law to apply to their worldwide assets, including their Spanish property. This can have significant practical consequences — particularly around the forced heirship rules that Spanish law imposes, which differ materially from the inheritance law of most northern European countries.

British nationals are in a different position. The United Kingdom did not adopt Brussels IV, which means UK nationals cannot use the regulation's election mechanism in the same straightforward way. British property owners in Mallorca need specifically drafted wills that take both legal systems into account, and specialist legal advice is essential.

Forced Heirship: The Rule That Changes Everything

Under Spanish law, a significant portion of an estate is legally reserved for what are called forced heirs — typically children or descendants, and in their absence, parents. This system, known as la legítima, means that testators in Spain cannot freely dispose of their entire estate regardless of what their will says. The reserved portion for descendants amounts to two thirds of the estate: one third is the strict legitime that must be divided equally among all children, a second third can be allocated to any one or more descendants at the testator's discretion, and only the final third is truly free to dispose of to anyone.

For owners who have elected their national law under Brussels IV, the forced heirship rules of Spain may not apply — but their national law's own rules on inheritance may impose different constraints. German law, for example, has its own compulsory share provisions. The benefit of Brussels IV is not that it eliminates forced heirship altogether, but that it allows owners to plan within a framework they understand and have likely already dealt with in their home country.

Inheritance Tax in the Balearic Islands: An Exceptional Situation

Here is the genuinely good news, and it is news that changed significantly in recent years. In the Balearic Islands — covering Mallorca, Menorca and Ibiza — the inheritance tax situation for close family members is now exceptionally favourable.

Since May 2023, the Balearic government reduced the inheritance tax liability to effectively zero for Group I and Group II beneficiaries. Group I covers descendants under 21 years of age. Group II covers descendants aged 21 and over, spouses and civil partners, and ascendants such as parents. In plain terms, children, spouses and parents of a deceased Mallorca property owner pay no inheritance tax on what they inherit from property located in the Balearic Islands. Since July 2025 this 100 percent exemption has been extended to gifts as well as inheritances within these groups.

For more distant relatives — Group III beneficiaries, which includes siblings, uncles, aunts, nephews and nieces — the reduction is 60 percent on the Balearic inheritance tax liability. The remaining Group IV, covering more distant relatives and unrelated individuals, receives a 35 percent reduction.

This is a genuinely important development. In the years before these reforms, inheritance tax represented a significant financial burden for heirs of Spanish property, particularly for non-resident heirs who were historically taxed at national rates rather than the more generous regional rates. A ruling by the European Court of Justice in 2014 and subsequent changes to Spanish legislation resolved the discrimination against non-residents, meaning non-resident heirs of Balearic property now benefit from the same regional reductions as resident heirs.

The Six-Month Deadline

One of the most practical and pressing issues for heirs is timing. Once a property owner dies, heirs have six months from the date of death to file the inheritance tax declaration and pay any tax due. An extension of a further six months can be requested, but this must be done within the first five months from the date of death and interest will accrue on any unpaid tax during the extended period.

Missing this deadline carries penalties ranging from five to twenty percent of the tax due, plus interest. More significantly, heirs cannot transfer the property title, access Spanish bank accounts or sell the property until the inheritance tax declaration has been filed and any tax paid. Getting specialist Spanish inheritance lawyers involved promptly after a death is therefore not simply advisable — it is essential to avoid delays and additional costs.

The Importance of a Spanish Will

The single most important thing a Mallorca property owner can do from a succession planning perspective is to have a properly drafted Spanish will. A Spanish will does not replace a will in your home country — both can and should coexist — but a Spanish will that specifically addresses your Spanish assets makes the inheritance process considerably faster, cheaper and less stressful for your heirs.

Without a Spanish will, heirs face a more complex and time-consuming process. They must obtain a Certificate of Last Wills from Spain's Central Registry to confirm whether any Spanish will exists. If no will exists, they must apply for a declaration of intestate heirs — a Declaración de herederos abintestato — through a Spanish notary, which involves additional documentation, time and cost. The property then passes according to the Spanish intestate succession rules, which may not reflect your wishes.

A Spanish will should include an explicit choice-of-law clause under Brussels IV if you wish your national law to govern the succession. It should be signed before a Spanish notary and registered with the Central Registry of Last Wills in Madrid, which ensures that your heirs can locate it without difficulty after your death.

The Inheritance Process Step by Step

For heirs dealing with a Mallorca property after a death, the process follows a structured sequence. The death certificate must be obtained and officially translated if issued outside Spain. A Certificate of Last Wills is requested from the Spanish registry. If a will exists, the notary uses it to prepare the deed of acceptance of inheritance — the escritura de aceptación de herencia — in which heirs formally accept their inheritance. The inheritance tax declaration must then be filed with the Balearic tax authority, and any tax paid. Finally, the change of ownership is registered at the Land Registry. Only after this registration is complete can heirs freely sell, mortgage or otherwise deal with the property.

Capital Gains When Heirs Sell the Property

One point that heirs sometimes overlook is what happens if they subsequently decide to sell the property they have inherited. Spanish capital gains tax applies to the difference between the property's acquisition value and its sale price. For an inherited property, the acquisition value is taken as the value declared for inheritance tax purposes at the time of the inheritance — not what the deceased originally paid for it. This step-up in base value means that heirs who sell relatively soon after inheriting will not be taxed on the full appreciation that accrued during the original owner's lifetime.

Planning Now Makes All the Difference

The combination of the Balearic Islands' 100 percent inheritance tax exemption for children, spouses and parents, the availability of Brussels IV election for EU citizens, and the relative simplicity of the Spanish probate process when a proper Spanish will is in place means that Mallorca property ownership is, in inheritance planning terms, more straightforward than it has ever been — provided the groundwork is done in advance.

Imperial Properties works regularly with trusted legal specialists in Mallorca who handle precisely these matters for international property owners. We are happy to make introductions as part of the property buying process or at any time thereafter. Visit www.imperial-properties.com or contact our team directly.

Note: This article provides general information only. Inheritance law, succession tax and estate planning are highly complex and depend entirely on individual circumstances. Always seek personalised advice from a qualified Spanish lawyer and tax adviser.