This will specifically benefit those who have moved to Spain to live permanently and can therefore call their Spanish property their permanent residence or vivienda habitual – as per Article 20(c) Law 29/1987.
The concept vivienda habitual is as defined by the Law relating to income tax in Spain (Ley de Impuesto sobre la Renta de las Personas Físicas). Following this, anyone who spends more than 183 days a year in Spain is technically resident for tax purposes.
It is also very important to obtain a certificate of Empadronamiento which means to register as being a local resident with the town hall.
It is a simple process and may be used as evidence of being a resident and using the home as your vivienda habitual.
The amount of time that needs to have been spent by the deceased living in the property before it may be called a vivienda habitual is described in the income tax laws as three years though it also states that death of the individual during that period is an exception so it can only be said for sure that the longer the period of time the better.
The exemption amounts to €122,606.47 per beneficiary and is restricted to spouses, children, and parents of the deceased and only to extended family members who have lived with the deceased for a minimum of two years prior to the date of death.
This exemption has a ceiling of 95% of the value of the property. One proviso is that the beneficiaries may not immediately sell the property and must maintain ownership for several years.