The Boom in Luxury Home Inheritances in Spain: Record-Breaking Numbers!
Amidst a slowing real estate market, inherited homes are experiencing an unprecedented boom in Spain. Despite a decrease in property sales and mortgage signings attributed to rising interest rates and economic uncertainty, inherited properties are reaching historic levels.
According to the latest data from the National Institute of Statistics (INE), in the first half of the year, there have been more than 107,073 inheritances of homes across the country, marking a milestone in the historical series that began in 2007. This number represents a 3.7% increase compared to the previous year and a 2.5% increase compared to 2021, which until now held the record. In less than a decade, property transmissions through inheritances have increased by over 50%.
Unstoppable Growth:
During the first six months of the year, an average of more than 17,800 home transmissions through inheritance occurred each month, equivalent to 591 per day. March stood out by setting a record with 20,739 operations in a single month, surpassing the 20,061 in 2022.
Geographical Distribution:
Looking at the data by Autonomous Communities, Andalusia, Catalonia, the Valencian Community, and Madrid have recorded the majority of home inheritances in the first half of the year, accounting for nearly 60% of the total, with over 10,000 inheritances accumulated by June in each case. On the other hand, regions such as Cantabria, the Balearic Islands, and La Rioja, along with the autonomous cities of Ceuta and Melilla, have recorded fewer than 2,000 home transmissions via inheritances in the same period.
What Explains This Inheritance Boom?:
Consulted experts have identified several factors driving this upward trend in home inheritances in Spain. One of them is demographic, as most deceased individuals are elderly, over 80 years old, and in a country with a high rate of homeownership like Spain, these inheritances often include real estate that passes on to the children.
Additionally, population aging is a significant factor, as Spain, like other developed societies, is experiencing an increase in deaths.
It has also been suggested that the upturn may be related to the implementation of the Housing Law and the uncertainty it has generated, which could be motivating people to process inheritances to avoid potential restrictions on renting and selling properties.
What Does the Future Hold?:
Experts suggest that home inheritance transmissions will continue to increase due to demographic trends, with a gradual increase that could last for decades.
Furthermore, an increase in operations is expected due to tax incentives announced by some regional governments, such as in the Canary Islands, the Valencian Community, and the Balearic Islands, which could make inheriting more attractive from a fiscal standpoint.
Handling Inheritances and Timelines:
With the significant increase in property inheritances, it is important to understand where they are processed and how long the process of inheriting a home takes.
Most of the inheritance process takes place in a notary’s office, often with the assistance of lawyers or management companies. Some real estate companies and agencies also handle the inheritance process and the subsequent marketing of properties.
The time it takes to acquire a home through inheritance can vary significantly, from a few months to years, depending on factors such as the existence of a will and the agreement among heirs. Disputes among heirs are common, especially regarding the sale or retention of the property.
Taxes and Associated Expenses:
When inheriting a home, it is important to consider taxes and associated expenses. Inheritance Tax is the main tax, which varies depending on the inherited amount and the tax breaks offered by each autonomous community.
Additionally, the municipal capital gains tax must be taken into account, a municipal tax paid when the ownership of a property changes. There are also other expenses such as notary fees, tax costs, and Property Registry fees.
In conclusion, the boom in home inheritances in Spain is being driven by various factors, and this trend is expected to continue in the future with a gradual increase. Heirs should be prepared to face taxes and expenses associated with these transactions. Additionally, the choice of properly processing the inheritance and resolving potential disputes among heirs are key aspects in this process.
Article by Dust and Sand Luxury Homes.
