Inheritance Tax in Andalusia: 99% Relief for Direct Heirs

Who pays Inheritance Tax in Andalusia

Inheritance Tax in Andalusia is paid by heirs and legatees when Andalusian rules apply. This happens when the deceased had their habitual residence in Andalusia during the five years prior to death, or when, in the case of a non-resident deceased, the highest-value asset in the estate is located in Andalusia.

The tax is administered by the Andalusian Tax Agency, which uses Form 650 for the self-assessment. It is common to see heirs living outside Andalusia surprised that the applicable rules are Andalusian because their parent lived there.

How the tax burden is reduced for direct heirs in Andalusia

Andalusia provides a 99% relief on the Inheritance Tax liability for Group I and II heirs, subject to the requirements set by the regional rules in force at the date of accrual. In practice, this means that a child, spouse or ascendant inheriting in Andalusia pays 1% of the tax liability that would result from simply applying the state tariff.

Recall how the groups are defined:

• Group I: descendants and adoptees under 21.
• Group II: descendants and adoptees aged 21 or over, spouses, ascendants and adoptive parents.

The relief applies on the tax due, after the full calculation. It does not exempt from filing: the formal duty exists even if the final tax is very small.

Practical requirements for applying the effective reduction in Andalusia

The 99% relief is not automatic or unconditional. To apply it correctly, bear in mind:

• The kinship between deceased and heir must be Group I or II under the state rules.
• The accrual date determines the applicable regulations. If death occurred under an earlier version of the Andalusian rule, conditions may differ.
• It is worth checking whether the rules in force require certain limits on pre-existing wealth or on the inherited estate value.
• The application is according to the regional rules in force and must be properly evidenced in the filing.

In practice we see that most parent-child inheritances in Andalusia benefit from the relief without issue, but the documentation must be filed in order and within deadline to avoid administrative requests.

Specific primary residence reduction in Andalusia

Andalusia maintains a reduction for the acquisition of the deceased's primary residence, complementary to the state reduction. It applies when the heirs are spouse, ascendants, descendants or collateral relatives over 65 who lived with the deceased for the two years prior to death, provided the acquisition is kept for the legally established period.

This reduction lowers the taxable base before applying the tariff, and can be combined with the general 99% relief on the resulting tax due. The interaction between both can raise doubts, and both effects should be calculated to avoid errors. It is common to see families with a home in Seville, Málaga or Cádiz fully accessing this combination, paying a very small effective amount. The definition of "primary residence" follows the general tax criteria (continuous residence by the deceased as their main home), so second residences or rental properties do not fit within this scope.

Specific family business reduction in Andalusia

The acquisition by inheritance of an individual business, professional practice or shareholdings in entities can give right to a significant reduction, conditional on meeting requirements about the entity's economic activity, the family ownership percentage and the maintenance of the acquisition for a set period.

The Andalusian family business reduction coexists with the state 95% reduction, which we cover in detail in the guide on state reliefs in Spanish Inheritance Tax. Regions can improve but not eliminate the state reduction. In Andalusian family business successions — typically agro-industrial sector (olive oil, sherry, fruit and vegetables), coastal tourism or services — documenting compliance with requirements is decisive: genuine economic activity, family share, exercise of management functions and majority remuneration. The tax inspectorate reviews these points in detail.

What about Group III in Andalusia?

Group III includes siblings, uncles, nephews and other collateral relatives of the second and third degree, as well as ascendants and descendants by affinity. For these heirs, the treatment is notably less favourable than for Groups I and II.

The 99% relief does not apply with the same scope to Group III, and although specific regional reductions may exist, the fiscal result is substantially higher than for direct heirs. The case should be reviewed individually to identify any applicable reduction and minimise the surprise. In inheritances between siblings or between uncles/aunts and nephews/nieces, it is worth running the numbers before accepting the inheritance, since the amount payable can be significant and, unlike Groups I and II, there is no broad relief. The objective reductions (primary residence if requirements are met, family business, life insurance, disability) can apply to Group III where the legal conditions are met.

Deadlines and Form 650 filing in Andalusia

The general deadline is 6 months from the date of death, extendable by another 6 months if the request is filed within the first 5 months of the initial period. The filing is done before the Andalusian Tax Agency, normally electronically.

If filed late without prior request, the progressive surcharges of Law 11/2021 apply. It is common for families to assume "since it goes to 1%, no rush", and then run into surcharges on the nominal tax before relief, which is the basis for calculating the surcharge. The deadline is strict.

Special cases: non-resident heirs with assets in Andalusia

After the European case-law evolution, non-resident heirs may apply the Andalusian rules when these are competent. This is often very relevant when the deceased was resident in Andalusia, or when, being non-resident, they left a valuable property in Andalusian territory.

Typical case: parents resident in Seville, children living in the United Kingdom or Germany. Non-resident children can benefit from the 99% Andalusian relief instead of being taxed under the state rules. We covered this case in detail in the guide on inheritance with a non-resident heir, where we explain how the applicable regulations are determined and the nuances of tax representation.

Common mistakes in Andalusian inheritances

1. Not filing Form 650 because "the relief brings the tax close to zero". The formal duty exists.
2. Forgetting the municipal capital gains tax of the Andalusian city council where the property is located.
3. Misapplying the primary residence reduction without meeting the maintenance requirement.
4. Assuming the 99% relief also applies to Group III.
5. Confusing recent regulatory changes and applying an earlier version of the Andalusian rules.
6. Missing the 6-month deadline trusting in the low final tax.

In practice, many errors arise from not reviewing the interaction between state and regional reductions, particularly for primary residence or family business cases.

How GESTISYD can help

• We review the case and apply the Andalusian relief correctly.
• We compute the effective tax and prepare Form 650.
• We coordinate with the notary and the municipal capital gains tax of the relevant Andalusian city council.
• We work in Spanish and English, particularly useful for inheritances with non-resident heirs.