Inherited homes can be sold now without waiting for unintended heirs

September 21st, 2021 |

A recent change in Spanish mortgage law provides for a much fairer outcome when inheriting a property. This welcome deletion of Article 28 now allows for inherited property to be sold without any time penalties or uncertainties.

Up to now, a property which was inherited was subject to an enforced period of 2 years before it can be sold. This law allowed time for any illegitimate children to make themselves known and make a claim upon the estate of the deceased. Historically, the law is said to provide time for children of Spanish emigrants to find out about the death and return to make their claim. So the phrase ‘unexpected heirs’ would strike fear into both the known beneficiaries and potential buyers alike.

The law

This burdensome legislation has seen a spanner thrown into the works of many a sale, with the prices of such probate sale properties subsequently negatively affected to reflect the risk the buyer has taken. It also led to protracted transactions as the final price is debated and a general cumbersome process due to the enforced time lapse. Such sales have been registered in the property registry to allow the sale to proceed but with the worrying caveat that the transaction was subject to Article 28. Should the dreaded unexpected heir appear within the two year period, the buyer cannot refuse to return it but is still liable to honour their mortgage payments. Whilst successful claims on estates have been uncommon in modern times, this law has been a wholly unsatisfactory set up indeed. Like many laws across the world, its origin was no longer relevant in the 21st Century.


What can we expect?

The pandemic has seen a huge rise in the number of properties inherited. With the majority of fatalities amongst the elderly, the market has benefited from a surge in available housing stock. The first half of 2021 saw a record 103,116 transfers of property ownership in Spain which is a whopping average of 570 per day. This burst of properties onto the market is unprecedented and without this change in the law, would have led to tens of thousands of transactions tainted with uncertainty. Not to mention the administrative burden Article 28 caused for conveyancers.


Mortgages themselves have historically reflected the risk to lending on a probate sale property. Now, the banks are expected to lower risk rates accordingly which adds to the good news of this change. The even better news is that the change in law is retrospective so banks can look to revise the risk rates of recent transactions too.

Capital Gains Tax is due on sale proceeds of inherited property as it is seen as income, and this remains unaltered.

So, it remains to be seen the full effect on sale prices and speed of transactions this change in the law will provide, but it is much welcomed and will surely allow for buyers and sellers alike to take a deep breath of relief.