What is ISD in Valencia?

ISD (Impuesto sobre Sucesiones y Donaciones) is the regional inheritance and gift tax administered by the Valencian Community. Each autonomous community in Spain sets its own rates, exemptions and deductions. Valencia has its own scale with notable exemptions for direct family members.

What exemptions apply for direct descendants in Valencia?

Direct descendants (children, grandchildren) benefit from significant reductions in Valencia. The effective tax burden on direct descendants is considerably lower than the national base rate due to regional bonifications. Consult a qualified tax adviser or gestoría for current exact exemption amounts as these change periodically.

Are life insurance proceeds taxed under Valencia ISD?

Life insurance proceeds paid to named beneficiaries are generally subject to ISD in Valencia. The tax treatment depends on the relationship between policyholder and beneficiary, whether beneficiaries are named directly in the policy (not through a will), and the residency status of the beneficiary. Direct descendants named in the policy benefit from the most favourable treatment.

What is the difference between resident and non-resident ISD treatment in Valencia?

Valencia residents can access the regional bonifications and reduced rates set by the Valencian Community. Non-residents are typically taxed under the national ISD scale which generally results in higher effective rates. The residency of the beneficiary (not the deceased) determines which scale applies.

How does family relationship affect ISD in Valencia?

ISD in Valencia is structured by grupos (groups): Group I (direct descendants under 21), Group II (direct descendants 21+, spouse, ascendants), Group III (siblings, aunts, uncles, nephews, nieces), Group IV (other relatives and unrelated persons). Groups I and II receive the best treatment. Groups III and IV pay significantly more.

Inheritance Tax in Valencia Spain

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Important Notice
Turner Insurance does not provide inheritance tax advice or services. This information is provided as a rough guide only for educational purposes, accurate as of 2026. Regional tax rules change — always consult a qualified gestoría, abogado or tax adviser for advice specific to your situation.

Valencia ISD — 99% Bonification for Direct Family

The Valencian Community applies a 99% bonification on ISD for Group I and Group II beneficiaries (descendants, ascendants, spouses and registered partners). This brings the effective rate to approximately 1% of the standard state scale — placing Valencia alongside Madrid, Andalusia, Galicia and Murcia as one of Spain's most favourable regions for direct-family inheritance. Valencia also provides a substantial personal reduction and generous habitual dwelling relief.

ISD Groups in Valencia

Group I (direct descendants under 21): Personal reduction of €100,000 plus €8,000 for each year under 21 (max €156,000). 99% bonification on the resulting liability. Effective rate: negligible for almost all estates.
Group II (direct descendants 21+, spouse, ascendants): Personal reduction of €100,000 per heir. 99% bonification on the liability. Effective rate: approximately 1% of the standard scale.
Group III (siblings, nieces/nephews, in-laws): Standard rates apply with limited reductions. The 99% bonification does not extend to this group.
Group IV (unrelated persons): Standard national rates. No Valencian-specific relief.

Key Reductions Available in Valencia

99% bonification on ISD liability for Groups I and II
Personal reduction of €100,000 per heir for Groups I and II
Age-related additional reduction for Group I (€8,000/year under 21, max €156,000 total)
95% reduction on habitual dwelling (up to €150,000) for spouse, descendants and ascendants who maintain the property for at least 5 years
95% reduction on individual business, professional activity and qualifying company shares, subject to 5-year maintenance
Special reduction for disabled heirs: €120,000 (disability 33%–65%) or €240,000 (disability over 65%)

Donations (gifts during lifetime)

Valencia also applies a 99% bonification to donations made to Group I and Group II beneficiaries. Donations must be formalised in a notarised escritura pública and declared on Modelo 651 with the Generalitat Valenciana's tax agency (ATV) within 30 working days. The donor must document the source of funds clearly. Unlike Murcia or Andalusia, the bonification for Valencia donations does not extend to Group III.

Filing Requirements

Inheritance returns are filed on Modelo 650 with the Agència Tributària Valenciana (ATV) within six months of the date of death. A six-month extension can be requested. The 99% bonification only applies if the return is filed correctly and on time — failure to file triggers penalties and create complications with property registration.

Life Insurance and Valencia ISD

Life insurance proceeds form part of the ISD base in Valencia. With the 99% bonification for Groups I and II, the effective tax on family life-insurance payouts is approximately 1% of the standard state scale amount — negligible for most families. The €100,000 personal reduction further reduces the base before the bonification is applied. Name beneficiaries directly in the policy rather than through a will to access the most favourable treatment. For non-family beneficiaries standard rates apply.

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Frequently Asked Questions — Inheritance Tax in Valencia Spain

Valencia applies a 99% bonification on ISD for Group I and Group II beneficiaries — making the effective rate approximately 1% of the standard state scale for direct descendants and spouses. A personal reduction of €100,000 per heir also applies. This places Valencia alongside Madrid, Andalusia, Galicia and Murcia as one of Spain's most favourable regions for direct-family inheritance. Always verify current figures with a local gestoría or tax adviser as Valencian ISD rules have evolved in recent years.

Groups I and II each receive a personal reduction of €100,000 per heir. Group I (under 21) receives an additional €8,000 per year under 21, capped at a total of €156,000. Special reductions apply for disabled heirs: €120,000 for disability between 33%–65%, and €240,000 for disability over 65%. These reductions are deducted from the inheritance value before the tax scale and 99% bonification are applied.

Yes — Modelo 650 must be filed with the Agència Tributària Valenciana (ATV) within six months of the date of death. Extensions of six months can be requested before the deadline expires. The 99% bonification only applies if the return is filed correctly and on time. Failure to file triggers penalties and can create complications with property title registration and releasing bank accounts.

Yes — Valencia applies a 99% bonification to donations for Groups I and II, consistent with the inheritance treatment. Donations must be formalised in a notarised escritura pública and filed on Modelo 651 with ATV within 30 working days. Unlike Murcia or Andalusia, the Valencia bonification for donations does not extend to Group III. Donations must be formalised in a notarised escritura pública and filed on Modelo 651 with ATV within 30 working days. This makes lifetime gifting to direct family in Valencia broadly as tax-efficient as in Madrid, Andalusia or Galicia.

Life insurance proceeds are included in the ISD base in Valencia. The 99% bonification applies for Group I and II beneficiaries, meaning the effective ISD on life insurance payouts to direct family is approximately 1% of the standard scale — negligible for most families. Name beneficiaries directly in the policy for the best treatment.

Valencia provides a 95% reduction on the value of the habitual dwelling up to €150,000 when inherited by a spouse, descendant or ascendant. The beneficiary must maintain ownership for at least 5 years. Combined with the 99% bonification on any remaining liability, the family home is effectively tax-free in Valencia for most direct-family inheritances.

EU and EEA non-resident beneficiaries can elect to apply Valencia's regional rules (including the 99% bonification) following EU case law. For UK nationals post-Brexit, the position depends on specific circumstances. The residency of the deceased — not the beneficiary — determines which regional scale applies in the first instance. Specialist advice from a tax adviser experienced in cross-border Spanish inheritance is essential for non-resident beneficiaries.

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Other Regions

Inheritance Tax by Region — Across Spain

Inheritance tax (ISD) rules vary by autonomous community. Compare the rules that apply in other regions of Spain:

Andalusia Aragón Asturias Balearic Islands Basque Country Canary Islands Cantabria Castilla-La Mancha Castilla y León Catalonia Extremadura Galicia La Rioja Madrid Murcia Navarra Interactive Map Inheritance Tax — All Regions