Inheriting a rental portfolio is not inheriting a flat
Nextica Law & Tax plans and handles the succession of real estate wealth: the family office's rental portfolio, the company that holds it and the half-finished development. In Catalonia succession is governed by book four of the Civil Code of Catalonia, which offers institutions the common regime does not have — the succession pact, the universal usufruct legacy, the fiducia — and which allow you to settle who manages before anyone dies. On the tax side the work starts much earlier: the family business relief under art. 20.2.c of Law 29/1987 only reaches what is exempt from Wealth Tax under art. 4.Eight.Two of Law 19/1991, and that means reviewing the structure years before the succession. Catalonia's own rules, Law 19/2010, apply, and the non-resident heir's file is resolved.
Family business relief is decided years before the inheritance, not on the day of the deed.
What's included
1. An inventory of the real estate wealth with how it is held
what is in a personal name, what sits in a company, and what is shared with siblings from the previous inheritance.
2. Checking whether the letting reaches the succession classified as an economic activity, which is the condition all later tax planning depends on.
4. Choosing the Catalan civil law succession instrument that fits
a succession pact to settle the family business during life, universal usufruct for the spouse, fiducia where it is not yet known who will manage.
5. Drafting the will with safeguards against challenge, and with the forced share calculated on wealth that is illiquid by definition.
6. Full administration
acceptance, allocation, registration of the properties and settlement under Catalonia's own rules.
7. The non-resident heir's file
representation, obtaining documents abroad and coordinating deadlines, which is what has to start in the first month.
THE PLANNING IS DONE YEARS EARLIER; ON THE DAY OF DEATH THE PICTURE IS ALREADY TAKEN
And this is wealth worth a great deal with no cash in it: the tax has to be paid out of what cannot be sold quickly.
Assuming family business relief
it only reaches what is exempt from Wealth Tax, and for property letting that exemption requires the activity to be genuinely economic, with the duties and remuneration conditions met by whoever carries it on. Twenty flats managed by a third party usually fall outside.
art. 20.2.c of Law 29/1987 and art. 4.Eight.Two of Law 19/1991Planning under the common Civil Code where the civil residence is Catalan
succession is governed by book four of the Civil Code of Catalonia, which has its own instruments — succession pact, universal usufruct, fiducia — and a different forced-share regime. A will drafted from the wrong template does not order what it was thought to.
book four of the Civil Code of Catalonia (Law 10/2008)Treating the non-resident heir under the state regime without more
they may apply the regional rules indicated by the statutory connecting factors, and in an estate with property in Catalonia that usually changes the outcome. What does not change is that administering from abroad takes time, and the deadline runs all the same.
second additional provision of Law 29/1987 and Catalonia's Law 19/2010INHERITANCE TAX DEPENDS ON YOUR AUTONOMOUS COMMUNITY — THE CASE OF CATALONIA
Catalonia has its own regulation for the Inheritance and Gift Tax (Law 19/2010, of June 7, regulating the inheritance and gift tax in Catalonia), with reductions and bonuses that differ from those in other autonomous communities. Knowing the Catalan specificities can mean a difference of thousands of euros in the settlement: The amounts of the reductions may vary due to regulatory updates. Contact our team for the amounts in effect at the time of processing.
| Family group | State base reduction | Particularities Catalonia (Law 19/2010) |
|---|---|---|
| Spouse / Stable partner (Gr. II) | 100,000 € | Reduction €100,000 + additional reduction for primary residence up to €500,000 (95% of the value). Discounted rate on low installments. |
| Children and descendants (Gr. I and II) | €100,000 (children) · €50,000 (grandchildren) | Reduction of €100,000 per child + €12,000 additional for each year under 21. Disability reduction up to €275,000. |
| Brothers / Uncles / Nephews (Gr. III) | €8,000 | More limited relationship reduction. The tax burden is significantly higher than for descendants. |
| Family business | 95% of the value | 95% reduction in the value of the company or holdings in the IS if the requirements of art. 20.2.c LISyD (BIZNISS) are met. Critical for the continuity of the family business. |
Spouse / Stable partner (Gr. II)
Children and descendants (Gr. I and II)
Brothers / Uncles / Nephews (Gr. III)
Family business
Frequently asked questions
I have twenty flats let in my own name. Will my children get family business relief?
Only if the letting reaches the succession classified as an economic activity, and that does not depend on the number of flats but on how it is organised. The relief under art. 20.2.c of Law 29/1987 rests on the Wealth Tax exemption, and that exemption requires the activity to be genuine and the person carrying it on to meet the duties and remuneration conditions. Twenty flats managed by an outside agency, without more, usually fall outside. This is the review to do years in advance, because on the day of death the photograph has already been taken.
My son lives in Germany. Can he apply the Catalan rules?
Yes. Since the amendment introduced by the second additional provision of Law 29/1987, following the Court of Justice of the European Union judgment holding the difference in treatment contrary to EU law, non-residents may apply the rules of the region indicated by the statutory connecting factors, instead of always falling under the state regime. In an estate with property in Catalonia that usually means Law 19/2010. What does change is the administration: tax representation, deadlines and obtaining documents abroad, which is worth starting in the first month.
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