Inheriting property: legal steps, taxes and how to avoid conflicts between heirs

Inheriting a property can be a great opportunity... or a headache. From essential legal procedures to taxes and family decisions, managing an inheritance consisting of real estate requires clarity, strategy and, above all, professional advice.

In this article, we explain what to do when you inherit a property, what taxes you have to pay, how to manage it with other heirs and how to avoid family conflicts.

What to do when you inherit a property: necessary procedures and documents

First, you must decide whether to accept or renounce the inheritance. This decision must be made official by a notary. If you accept the inheritance, you are also responsible for any associated charges or debts (e.g. mortgages or outstanding taxes).

Basic documentation you will need:

• Death certificate of the deceased person.
• Certificate of last will and testament (to check if there is a will).
• Copy of the will, if there is one.
• Deed or title deed to the property.
• Proof of payment of inheritance tax.

Tip: Before signing anything, seek legal advice to verify that there are no previous charges or disputes over the property. This can prevent future problems with other heirs or the tax authorities.

It is also important to carry out a correct valuation of the assets, especially if the subsequent objective is to sell them, as this will avoid surprises in your income tax return.

Taxes on inheritance with real estate: what you have to pay and how to save

The main tax is Inheritance and Gift Tax, which varies according to the autonomous community and the degree of kinship with the deceased.

In Catalonia, there are significant allowances for immediate family members (children, spouse or parents).

If you later decide to sell the inherited property, you will also have to pay:

• Municipal capital gains tax (Tax on the Increase in the Value of Urban Land).
• Income tax on capital gains, if the sale price is higher than the value declared in the inheritance.

Tax tip: Plan the timing of the sale carefully. In some cases, waiting or considering a donation can significantly reduce the tax burden.

What happens if there are several heirs: options for managing joint property

When a property is inherited by several family members (e.g. siblings), it is essential to reach an agreement on how to manage it.

Most common legal options:

• Form a joint ownership arrangement to manage the property together.
• Award the property to a single heir by compensating the others financially.
• Request a judicial division of the inheritance if no agreement can be reached.

Practical tip: Joint ownership works well in the short term, but in the long term it can lead to disagreements. If there is no understanding, it is better to consider an agreed exit before going to court.

Sell, rent or keep the inherited property: what is best?

Once the property has been awarded, the heirs must decide how they want to use it.

The most common options are:

• Sell it: a quick solution to obtain liquidity, although it requires agreement between all owners and involves notary and tax expenses.
• Rent it: this allows you to generate recurring income, although it involves maintenance management and tax obligations.
• Keep it: it can serve as a second home or as a long-term investment.

Real estate tip: Before deciding, calculate the profitability of each option and consult an advisor to understand the tax and economic impact of each alternative.

How to avoid family conflicts over inherited property

Once the inheritance has been awarded, tensions may arise between family members, especially when there is a lack of communication or differences in the management of the inherited property.

Best practices for preventing disputes:

• Draw up written agreements between the heirs to clarify each person's rights and obligations.
• Use mediators or external advisors to facilitate dialogue and avoid tensions.
• Avoid unilateral decisions about the sale, rental or use of the property.

Key to coexistence:

Transparency and mediation are essential for maintaining good family relationships. Defining management rules once the allocation has been made helps prevent conflicts and preserve family harmony.

Conclusion: how to successfully manage an inheritance involving real estate

Managing an inheritance involving real estate is much more than just receiving a house. It is a legal, fiscal and emotional process that requires information, patience and expert advice, both at the fiscal and legal levels, as well as in terms of real estate.

With the support of specialised professionals, you will be able to:

• Process the documentation correctly.
• Evaluate options for sale, rental or conservation.
• Avoid conflicts and optimise the value of the inherited property.

Every inheritance is unique. Having the right help will allow you to make safe and profitable decisions, protecting both your assets and your family relationships.

In this context, it is essential to have an expert eye that integrates all the aspects involved (legal, tax and real estate) to ensure a smooth process. Our consultancy has a multidisciplinary team, made up of our law firm, a team of real estate advisors and tax specialists, who work together to offer a comprehensive overview and close support. In this way, we help our clients to manage their inherited assets with confidence, efficiency and peace of mind.