German expats in Spain benefit from one of the few real inheritance tax treaties between Spain and a major European country. Germany levies Erbschaftsteuer under the Erbschaftsteuer- und Schenkungsteuergesetz (ErbStG) on a residence and recipient basis; Spain levies IHT under the regional regimes. The 1966 Germany/Spain double-tax convention covers income, capital and inheritance and gives genuine bilateral coordination. Berliner Testament, Pflichtteil and the Spanish legítima meet at the cross-border boundary. We handle both sides.
Germany is, alongside Sweden, one of the few countries that has a real bilateral inheritance tax treaty with Spain. The 1966 Abkommen zwischen der Bundesrepublik Deutschland und dem Spanischen Staat zur Vermeidung der Doppelbesteuerung (covering income, capital and inheritance taxes) gives German expats a treaty-based framework that British, American, Canadian and Australian expats simply do not have. In practical terms this means a real credit mechanism between Erbschaftsteuer paid in Germany and IHT paid in Spain on the same assets — not just the Spanish Article 23 unilateral credit.
Germany levies Erbschaftsteuer on a mixed residence and situs basis. If either the deceased or the recipient was German tax resident at death, worldwide assets fall inside the German net. Non-resident situations (neither deceased nor beneficiary German-resident) limit German tax to German-situated property. Rates run from 7% to 50% depending on Tax Class (Steuerklasse I, II, III) and band, with personal Freibeträge (tax-free allowances) of €500,000 for spouses, €400,000 per child, €200,000 per grandchild, €20,000 per sibling/other, and €20,000 for unrelated heirs.
Spanish IHT sits on top, with regional bonificaciones doing most of the heavy lifting (Andalusia, Madrid, Valencia, Canaries close to 99–99.9% for Group I/II; Murcia 99% for Group I/II; Balearics reformed 2023). The treaty's credit mechanism prevents true double taxation where both systems would otherwise apply: the country of secondary taxing right gives credit for the tax paid in the country of primary taxing right on the relevant asset.
This page covers Erbschaftsteuer mechanics, the Germany/Spain treaty credit structure, Berliner Testament coordination with Spanish legítima, Brussels IV election of German law, and the practical workflow we use for German-Spanish estates. If you are a German citizen resident in Spain, or a German resident with Spanish property or Spanish beneficiaries, open a file with us.
Six rules govern every German-connected Spanish estate. Start here.
German tax if deceased or recipient German-resident — worldwide assets. Non-resident situation limits to German-situated property. Classes I/II/III with Freibeträge.
Residence + recipientReal bilateral IHT treaty. Credit mechanism prevents double taxation. Primary vs secondary taxing rights allocated by asset type. Article 26 credit.
Genuine treaty credit€500,000 spouse; €400,000 per child; €200,000 per grandchild; €20,000 sibling/unrelated. Applied before rate bands. Non-residents restricted to €2,000 historically; EU citizens may elect unlimited.
Freibeträge structureGerman testators elect BGB succession law on Spanish wills under EU 650/2012. Preserves Pflichtteil-only-on-request structure vs Spanish legítima's automatic forced share.
German law electionPflichtteil is a monetary claim on request (half of intestate share); Spanish legítima is an automatic share of the estate. Election of German law switches the regime.
Very different systemsStandard German Berliner Testament leaves all to surviving spouse, then to children. Works in Spain under Brussels IV German law election; Spanish notary accepts.
Berliner TestamentUnlike the UK, US, Canada and Australia (none of which have IHT treaties with Spain), Germany signed a bilateral convention with Spain in 1966 that specifically covers inheritance tax alongside income and capital taxes. The treaty allocates primary taxing rights: real property is primarily taxed by the country where it is located; movable assets by the country of the deceased's residence; financial assets by residence but with situs rules for shares in companies etc. The secondary country credits tax paid in the primary country up to the amount of its own tax on the same asset.
In operation: a Spanish-resident German deceased with a German bank account faces Spanish primary taxing right on the account (movable asset, deceased resident in Spain), German secondary taxing right with credit. A German-resident German deceased with a Costa del Sol villa faces Spanish primary taxing right on the villa (real property), German secondary taxing right with credit. The result — properly coordinated — is that total tax does not exceed the higher of the two countries' tax on the asset. This is substantially better coordination than the UK/US unilateral-credit-only regime.
German Erbschaftsteuer works on Tax Classes based on the beneficiary relationship. Steuerklasse I covers spouses, children, grandchildren, parents (in death cases); Klasse II covers siblings, nieces/nephews, step-parents, parents-in-law; Klasse III covers all others. Rates within Klasse I range 7–30% across seven bands (up to €26m). Klasse II 15–43%. Klasse III 30–50%. Freibeträge are applied per beneficiary per 10-year window: €500,000 spouse, €400,000 child, €200,000 grandchild, €100,000 parent (in death cases), €20,000 sibling, €20,000 Klasse III.
The 10-year window matters: lifetime gifts combine with inheritance for Freibetrag purposes within a rolling 10-year period. Planned lifetime gifting spread across the window multiplies the effective allowance. For a German parent with two children and 20 years of planning horizon, up to €1.6m of Freibetrag per child is theoretically available (€400k × 2 windows × 2 children), before any rate application.
The Berliner Testament is the standard German married-couple will: each spouse appoints the other as sole heir (Alleinerbe), with children as replacement/residual heirs (Schlusserben) on second death. It creates the classic two-tier German succession: surviving spouse takes everything, children take on second death. Under German law Pflichtteil (compulsory share) is a monetary claim the children can but need not make; in well-designed Berliner Testaments a Pflichtteilsstrafklausel (forfeiture clause) deters children from asserting Pflichtteil on first death by threatening reduction on second death.
Reception in Spain: Berliner Testament is valid in Spain as a German-form will for German nationals. Under Brussels IV the testator elects German succession law, and the Spanish notary applies it. The Spanish legítima does not apply to the Spanish estate of a German national who has elected German law. We routinely draft and notarise Berliner Testaments in Spanish-German dual form for German expats — preserving the German structure while meeting Spanish notarial formalities.
Historically, non-residents of Germany (both deceased and beneficiary outside Germany) had a minimal €2,000 Freibetrag on German-situated assets. The ECJ (Welte, Hünnebeck, others) held this discriminatory against EU free movement. Since 2017 reform, non-resident EU/EEA beneficiaries may elect to be treated as unlimited taxpayers, accessing full Freibeträge, but subjecting their worldwide gifts/inheritance to German tax. For Spanish-resident German beneficiaries inheriting German property, the election typically makes sense (accesses €400,000 or €500,000 Freibetrag, but limits German tax to the German property via treaty).
We map your German and Spanish tax residence histories, identify the 1966 treaty tie-breaker position, and document which country has primary taxing right over each asset class.
We draft coordinated German and Spanish notarial wills with Brussels IV election of German law, Pflichtteilsstrafklausel where appropriate, and a Berliner Testament spousal structure where suitable.
We structure to maximise German Freibeträge (including 10-year gift window), the EU unlimited-taxpayer election for non-residents, and the Spanish regional bonificación through asset location and heir election.
On bereavement we run the German Erbschein, Spanish IHT Modelo 650, German Erbschaftsteuer return and Spanish Land Registry transfer in parallel, claiming the 1966 treaty credit on both sides.
German Pflichtteil (BGB §§2303 et seq.) is a monetary claim (Zahlungsanspruch) that excluded close relatives (children, spouse, parents in absence of children) can but need not assert, equal to half of their statutory intestate share. It is not an automatic share in the estate itself — it is a debt claim against the heirs. The testator retains testamentary freedom in that he can disinherit; the disinherited relative has a money claim but not a property claim.
Spanish legítima (Código Civil Arts 806–847) is very different: two-thirds of the estate is reserved for descendants (legítima estricta + mejora), with the testator only free to dispose of the remaining third. The legítima is a share in the property of the estate itself, not a monetary claim, and heirs cannot be disinherited except for narrow statutory causes.
For a German national testator electing German law on Spanish wills, the German Pflichtteil regime applies to the whole estate including Spanish assets. The Spanish legítima is displaced. German children of a German-national Spanish-resident deceased are in the Pflichtteil position (monetary claim, half of intestate share), not the Spanish legítima position (automatic two-thirds of the property).
German expats becoming Spanish tax resident (183 days, centre of economic interests, family residence) face Spanish worldwide IHT exposure at death. German tax residence tested on Wohnsitz (habitual abode) and gewöhnlicher Aufenthalt (ordinary residence). Dual tax residence resolved by the 1966 tie-breaker (permanent home, centre of vital interests, habitual abode, nationality, competent authority). Post-tax-residence-shift, IHT primary right typically shifts to Spain for movable assets but Germany retains primary right on German real property.
Germany's private capital gains on real property are tax-free after 10 years ownership (Spekulationsfrist, §23 EStG) for German-resident owners. For a German-resident owning a Spanish property >10 years, sale is German-CGT-free. Spain, however, taxes the gain (non-resident 19% / resident marginal rates). The income tax treaty allocates real property gains to the situs country (Spain primary). Germany would not tax the gain regardless of the 10-year rule (treaty allocates primary). On inheritance, deemed acquisition cost steps up to IHT value, so later sale gain is measured from the IHT valuation.
Our standard architecture for German expats: German-form notarial will at German Notar covering German assets under German law; Spanish-form notarial will at Spanish notary covering Spanish assets with Brussels IV German-law election. Properly coordinated so neither revokes the other. The German will handles the German Grundbuch, German bank accounts, German pension and Lebensversicherung designations. The Spanish will handles the Spanish Registro de la Propiedad, Spanish bank accounts, Spanish NIE-linked financial assets. Both reference the same elected governing law (German BGB).
German Erbschaftsteuer runs Schenkungsteuer alongside, with gifts combined with inheritances for Freibetrag purposes within a rolling 10-year window. German parents commonly gift to children under the €400,000 Freibetrag every 10 years to shift wealth out of the estate before death. For Spanish-tax-resident German gift recipients, Spanish gift tax (Impuesto de Donaciones — same Modelo 651) applies; regional bonificaciones generally mirror IHT but vary by community. Coordination across the 1966 treaty (which covers gifts via its IHT provisions) limits double taxation.
German gesetzliche Rente (statutory pension) survivor's pension passes to spouse under statutory rules, generally outside the IHT estate (partial exclusion). Private Lebensversicherung (life insurance) designated to a named beneficiary passes outside the estate but is included in the Erbschaftsteuer base as a benefit to the recipient. Riester and Rürup private pensions have specific rules. For Spanish-resident heirs of a German deceased, Spanish IHT applies to the private life insurance benefit; coordination with German Erbschaftsteuer via the treaty.
Germany sends relatively few Digital Nomad Visa applicants to Spain (because German nationals are EU citizens and don't need a DNV), but many retirees who have become Spanish tax resident. Since these retirees are ordinary Spanish tax residents (not Beckham), their worldwide assets fall in the Spanish IHT net at death with full treaty coordination to Germany on German-situated assets.
Spain still operates Impuesto sobre el Patrimonio (wealth tax) in most regions for net wealth over thresholds (regional — Madrid is 100% bonificado). German wealth tax was abolished in 1997. A German expat who becomes Spanish tax resident in a non-exempt region (Catalonia, Valencia, Balearics) faces wealth tax on worldwide wealth, offset in Madrid, Andalusia (limited). Regional choice of Spanish residence matters for the living-wealth-tax profile, not just IHT.
Germany has a real IHT treaty with Spain. Use it. We coordinate Erbschaftsteuer, Freibeträge, Berliner Testament, and Spanish regional bonificaciones through the 1966 convention.
Request a German Estate ConsultationParents resident in Spain with children in Germany; non-resident property owners leaving Spanish assets to heirs abroad; surviving spouses, siblings, aunts and uncles, grandparents — every cross-border configuration follows a different rulebook.
German retirees with Mallorca villa (€800k), German family home (€600k), German bank accounts (€400k). Wife dies first. Berliner Testament leaves all to husband. Spanish IHT on Mallorca villa under Balearic Group I (reformed 2023) with spouse bonificación; German Erbschaftsteuer with €500k Freibetrag and treaty credit for Spanish IHT. Husband inherits clean. Worth-planning the children's ultimate second-death position via Pflichtteilsstrafklausel.
German IT professional (not Beckham — ordinary Spanish tax resident) with Marbella apartment (€450k), German Aktien portfolio (€600k), Berlin rental property (€500k). Dies unmarried, two siblings. Spanish IHT primary on Marbella (situs) and Aktien (movable assets, resident in Spain). German primary on Berlin property (situs). Steuerklasse II siblings in Germany (high rates), Group III in Spain (low/no bonificación, multipliers). Careful structuring — possibly trusts or gifts in lifetime — saves material tax.
German resident grandmother gifts Alicante villa (€300k) to Spanish-resident grandchild. German Schenkungsteuer: €200k grandchild Freibetrag in Klasse I, tax on €100k at 11% = €11k. Spanish gift tax on villa in Valencia: Group II (grandchild) with 99% regional bonificación post-2023 reform, so near-zero Spanish. Treaty credits the overlap. Net: ~€11k German Schenkungsteuer, near-zero Spanish. Well-planned.
German-resident parent dies owning Tenerife holiday home (€280k) plus German estate €900k. Child inherits. German Erbschaftsteuer on €1.18m with €400k Freibetrag = €780k taxable at Klasse I rates 11–19% = roughly €100k German. Spanish IHT: Canary Group II with 99.9% bonificación — effectively zero. Treaty credit on the villa portion washes out the tiny Spanish tax against German. Result: German tax only.
German national, Spanish-resident in Andalusia, dies leaving €2m Spanish estate, disinherits one child in favour of second spouse. Child had no Pflichtteil claim under German law asserted within the 3-year limitation. On Brussels IV German-law election, Spanish legítima displaced — child has Pflichtteil monetary claim only (not an automatic share in the Andalusian property). Monetary claim is calculated under German rules on the worldwide estate, but judicially enforceable through Spanish courts if needed.
German spouse, Spanish spouse, resident in Valencia. Spanish-national husband dies, Valencia villa + Spanish deposits. Valencia Group II (spouse) with 99% post-May-2023 bonificación. Spanish-law governs (Spanish national testator) — no German-law election. Erbschaftsteuer irrelevant (deceased not German national/resident; no German-situated asset). Wife inherits clean under Spanish-law election choices (no conflict). Simple file.
Non-resident Freibetrag is €2,000 default; EU-citizen election must be made to unlock full Freibetrag. Missing the election costs up to €498,000 of allowance for a spouse.
Gifts within 10 years of death combine with inheritance for Freibetrag. Late planning (within 10 years) does not reset allowances — it consumes them.
German-only will without Spanish coverage forces exequatur and German-probate translation at Spanish notary. Dual-will structure saves months and thousands.
Without express German-law election, Spanish national law may default under EU 650/2012 where habitual residence rules apply. Legítima then applies to Spanish estate — losing the German Pflichtteil structure.
The treaty credit is not automatic — it must be claimed in the tax return of the secondary country. Spanish IHT returns and German Erbschaftsteuer returns each need the treaty claim documented with the other country's paid receipt.
Without a forfeiture clause, children can assert Pflichtteil against the surviving spouse on first death and reduce the spouse's inheritance — defeating the Berliner Testament structure. Proper drafting is essential.
Mallorca, Costa Blanca, Costa del Sol, Canary Islands — the largest German expat populations. Typically Spanish tax resident with mixed German/Spanish estate.
Germans holding Spanish holiday/investment property while remaining German-resident. Non-resident situation for Spanish IHT; German primary right on worldwide; treaty credit on the Spanish situs asset.
Ordinary Spanish tax residents (not Beckham) with German Aktien, Lebensversicherung, German family property. Full coordination file.
One German-national spouse, one Spanish-national spouse, often with children. Brussels IV election in each spouse's will matters.
Lifetime gifting programmes using the 10-year Freibetrag window. Gifts to Spanish-resident children engage Spanish gift tax — regional bonificación matters.
Germans inheriting from Spanish-resident parents or relatives. Non-resident German heir status; election of regional Spanish regime under 2014 ECJ principle; German Erbschaftsteuer on receipt with treaty credit.
Brussels IV applied, wills drafted, Germany and Spanish tax positions coordinated, deadlines tracked.