Guides · · 14 min read
Inheriting a flat with a mortgage or debts in Spain in 2026: accept, benefit of inventory or renounce
If you inherit a flat with a mortgage, or suspect the deceased left debts, the way you accept the inheritance changes everything. We explain the three options available in 2026 (accepting outright, accepting with benefit of inventory or renouncing), the deadlines that apply, what happens to the mortgage and how to sell the flat to pay what is owed.
When you inherit, you do not only receive assets: you also receive debts. The outstanding mortgage on the flat, a personal loan, credit cards, community of owners fees or unpaid taxes all become part of the estate, because debts are not extinguished on death, as the Banco de España (Bank of Spain) points out. The good news is that the law offers tools so that you do not have to pay them with your own money.
In this guide we explain the three ways to respond to an inheritance, the deadlines to watch in 2026, what happens to the mortgage and the life insurance, and whether the flat can be sold to pay the creditors. It is written for inheritances in the Comunidad de Madrid (Madrid region), where the general Código Civil (Spanish Civil Code) applies.
First, find out what you are inheriting
Before choosing, you need as complete a picture as possible of the assets and the debts. These documents help the most:
- Certificate of last wills, to find out whether there is a will and before which notary.
- Certificate from the Register of life insurance contracts, which shows whether there was a life insurance or loan protection policy linked to the mortgage.
- Bank statement of positions and certificate of the outstanding debt on the mortgage and other loans.
- Nota simple (Land Registry extract) from the Registro de la Propiedad, to see mortgages, seizures or other charges on the flat.
- Certificate from the community of owners on outstanding fees.
- Information on debts with Hacienda (the tax authorities), Social Security or the town hall, such as IBI (property tax).
Heirs can ask the bank for the deceased's statement of positions and, under certain conditions, their account transactions (Diario de León, August 2026). This shows whether the inheritance is positive or whether the debts exceed the assets.
The three options
Accepting or renouncing is a free and voluntary act, and its effects go back to the date of death. You cannot accept part and renounce the rest, nor do it for a set term or with conditions (arts. 988 to 990 of the Civil Code). Each heir decides independently, regardless of what the others do (art. 1007).
Accepting outright
This is the usual choice when the estate is in good order. You can accept expressly, in a public or private document, or tacitly, through acts that only an heir would carry out. The risk lies in article 1003: anyone who accepts this way is liable for the estate's debts not only with what they inherit, but also with their own assets. If a debt nobody knew about turns up later, they would have to pay it even if it exceeds what they received.
Accepting with benefit of inventory
This is the middle option and the most prudent when there are doubts. Any heir can choose it, even if the will forbids it (art. 1010). It is declared before a notary, who draws up an inventory of assets and debts and summons the creditors. Its great advantage is that the heir is only liable for the debts up to the value of the inherited assets, their own assets are not mixed with the estate's and they keep any claims they had against the deceased (art. 1023).
While the creditors are being paid, the estate is placed under administration. Known creditors are paid first, then the legatees (the people to whom the will leaves specific assets), and whatever is left goes to the heir (arts. 1026, 1027 and 1032). If you already have assets from the estate in your possession, you have 30 days from learning you are an heir to notify the notary and request the inventory (art. 1014).
The benefit is lost, and you then become liable with everything, in these cases:
- If assets of the estate are knowingly left out of the inventory.
- If assets are sold before paying debts and legacies without the authorisation of all interested parties, or the money is not used for what was agreed (art. 1024).
- If, through the heir's fault or negligence, the inventory is not started or finished on time (art. 1018).
Renouncing the inheritance
Anyone who renounces (in legal language, repudiates) receives nothing, but is not liable for any debt either. It must be done before a notary, in a public document (art. 1008), and it cannot be undone. As nothing is inherited, no Inheritance Tax or plusvalía (municipal capital gains tax) is paid either.
There are two common traps. First: renouncing “in favour of” a particular sibling is not renouncing, but accepting and then giving away, with the taxes that entails (art. 1000). Second: the share of the person who renounces does not disappear. Without a will, it passes to the other heirs of the same degree, and if all the children renounce, the grandchildren inherit in their own right (arts. 922 and 923). If those grandchildren are minors, their parents need court authorisation to renounce on their behalf, and if the judge does not grant it, they can only accept with benefit of inventory (art. 166).
If the person renouncing has debts of their own, their creditors can ask the judge to accept in their place until they are paid (art. 1001). And if nobody accepts, the inheritance passes to the State, always with benefit of inventory (art. 957).
| Option | Are you liable for the debts? | Do you keep the flat? | When it fits |
|---|---|---|---|
| Accepting outright | Yes, with your own assets too | Yes | Clearly positive estate with no unknown debts |
| Accepting with benefit of inventory | Only up to the value of what you inherit | Yes, whatever remains after paying the debts | There are debts or doubts about how much they are |
| Renouncing | No | No | The debts clearly exceed the assets |
Source: arts. 1000, 1003, 1008, 1010 and 1023 of the Civil Code (CEF Civil-Mercantil).
Deadlines to watch
There is no short general deadline for accepting, but letting these ones pass can turn an inheritance with debts into a personal problem:
| Deadline | What happens | Rule |
|---|---|---|
| 9 days from the death | Before then, no one can demand that the heir accept or renounce | Art. 1004 of the Civil Code |
| 30 calendar days | After a formal notice from an interested party served through a notary; if there is no reply, it is deemed accepted outright | Art. 1005 of the Civil Code |
| 30 days | To request the inventory if the heir already has assets from the estate in their possession | Art. 1014 of the Civil Code |
| 30 + 60 days | To start and finish the inventory; the notary can extend it, but not beyond one year | Art. 1017 of the Civil Code |
| 30 days after the inventory | To state whether you accept or renounce; if you say nothing, it counts as accepting outright | Art. 1019 of the Civil Code |
| 6 months, extendable by another 6 | File Inheritance Tax in Madrid; the extension must be requested in the first five months | Comunidad de Madrid e-office |
| 6 months, extendable up to 1 year | Declare the plusvalía municipal on the inheritance | Consumo Responde |
Sources: Civil Code (CEF Civil-Mercantil), Comunidad de Madrid e-office (October 2026) and Consumo Responde.
What happens to the mortgage on the flat
The mortgage is not cancelled on death. According to the Banco de España, the debt becomes part of the estate on the same terms (interest, term and costs) and the heirs who accept are subrogated to it, that is, they take the deceased's place: the bank must add them as borrowers on the loan. Even if you agree in the division that only the person keeping the flat takes on the mortgage, you are all liable to the bank until it agrees otherwise.
If the loan had another borrower, such as the spouse, the heirs generally take on the deceased's share, and if they renounce the inheritance, the other borrower becomes liable for the whole loan, as HelpMyCash explains. A guarantor, for their part, does not drop out because of the death.
What to do about the mortgage, in this order:
- Tell the bank as soon as possible and keep paying the instalments: the loan is still running and a missed payment can trigger clauses in the contract. The bank does not repossess the home simply because of the death.
- Request the life insurance certificate and check whether there was a life insurance or loan protection policy. If there is one, it can cancel all or part of the debt; while the insurer pays, interest keeps running.
- Ask the bank for the certificate of outstanding debt.
- Decide whether someone will keep the flat and negotiate with the bank who takes on the loan, or whether it will be sold and the mortgage paid off with the proceeds.
For Inheritance Tax, the mortgage is deducted as a debt of the deceased if it is recorded in a public document. But it does not reduce the value of the flat for the purposes of the main home reduction: the Tribunal Supremo (Supreme Court) ruled in September 2021 that this reduction is calculated on the gross value of the property (Gómez-Acebo & Pombo).
Other debts that often turn up
- Personal loans and credit cards: they are inherited just like the mortgage, unless a linked insurance policy covers them (Banco de España).
- Debts with Hacienda: they pass to the heirs, but penalties are never inherited (art. 39 of the General Tax Act). They can also be deducted for Inheritance Tax.
- Community of owners fees: the flat is liable for those of the current year and the three previous years even if it changes hands, because the Ley de Propiedad Horizontal (Horizontal Property Act) ties them to the property.
- Debts with close relatives: they cannot be deducted for Inheritance Tax unless it is proven that the deceased and the creditor had separate finances (General Council of Administrative Agents).
Can the flat be sold to pay the debts?
Yes, and it is often the best way out, but the route depends on how the inheritance was accepted.
With outright acceptance, once the inheritance deed has been signed, the taxes filed and the flat registered, it is sold like any other: on the day of signing, part of the price is used to pay off the mortgage and the rest is shared out or used to pay other debts. If there are several of you, you all sign. We go through the steps and taxes of that sale in “Selling an inherited flat in Madrid (2026): steps, taxes and what to do if there are several heirs”.
With benefit of inventory you need to be more careful. Selling an asset from the estate before paying debts and legacies without the authorisation of all interested parties means losing the benefit (art. 1024). When a sale is needed to pay the creditors, the law provides for a notarial auction with prior notice to all interested parties, unless the heirs, creditors and legatees unanimously agree otherwise (art. 1030). In practice, it is usually quicker to agree with the creditors, starting with the bank, on a sale at market price with their consent.
An example with round figures
Two sisters inherit from their mother a flat in Madrid valued at €300,000, with €120,000 of mortgage outstanding and no loan protection insurance. When they go through the papers, they also find a personal loan of €25,000 and about €3,000 of overdue community fees. In total, €300,000 of assets and €148,000 of debts. The inheritance looks positive, but they are not sure they know about all the debts, so they accept with benefit of inventory.
As the inventory shows no further debts, they agree with the creditors to sell the flat. The price pays off the mortgage, the loan and the community fees, leaving about €152,000 before taxes and selling costs. If a debt larger than the flat had turned up, they would not have had to put in any of their own money.
Costly mistakes
- Using money from the deceased's accounts or selling assets before deciding, because it may be treated as acceptance.
- Ignoring a formal notice served through a notary and letting the 30 days pass.
- Renouncing “in favour of” someone in the belief that nothing will be paid that way.
- All the children renouncing without realising that the inheritance, with its debts, passes to the grandchildren.
- Stopping the mortgage payments while the inheritance is being processed.
- Not requesting the insurance certificate: a loan protection policy can cancel the debt.
How we do it at Llavely
At Llavely we work with lawyers specialising in property sales and inheritance, with more than 35 years of experience. When an inheritance comes with a mortgage or debts, with the “Full inheritance + sale” service our lawyers handle the whole inheritance: the will or declaration of heirs, acceptance and division before a notary, Inheritance Tax, the plusvalía and registration at the Land Registry. That part has a separate fixed quote, which we give you before starting.
If you decide to sell, we do it with “Llavely Sale”: 2.5% + VAT of the sale price, only if it sells and on the day of signing at the notary, with everything included and done by Llavely: valuation, photos, video, floor plan and virtual tour, screened and verified buyers (we speak to each one before showing the home and check their ID), viewings, which we carry out ourselves, offers and the arras (deposit contract), coordination with the notary, our lawyers from start to finish, who go with you in person to the notary, and a private seller portal to follow the sale.
This article is for information only: each specific case should be reviewed with a professional.
Frequently asked questions
Are debts inherited in Spain?
Yes. The deceased's debts form part of the estate. Anyone who accepts outright is liable for them with their own assets too; anyone who accepts with benefit of inventory, only up to the value of what they inherit; and anyone who renounces is not liable for anything.
What happens to the mortgage if the borrower dies?
The debt continues on the same terms and passes to the heirs who accept, who must be named as borrowers on the loan. It is advisable to tell the bank, keep paying the instalments and check whether there was a life insurance or loan protection policy covering it.
What does accepting with benefit of inventory mean?
Accepting the inheritance before a notary with an inventory of assets and debts, so that you are only liable for the debts up to the value of the inherited assets and your own assets are protected. Whatever is left after paying the creditors is yours.
How long do I have to accept or renounce an inheritance?
There is no short general deadline, but if an interested party serves you with a formal notice through a notary, you have 30 calendar days; if you do not reply, you are deemed to accept without benefit of inventory. In addition, Inheritance Tax is filed within six months of the death, extendable.
If I renounce the inheritance, do the debts pass to my children?
They can. Without a will, if all the heirs of one degree renounce, those of the next degree inherit in their own right, for example the grandchildren. They can also renounce or accept with benefit of inventory; if they are minors, their parents need court authorisation to renounce.
Can I keep the flat and renounce the debts?
No. An inheritance cannot be accepted in part. What benefit of inventory does allow is paying the debts first with the estate's assets and keeping what is left, including the flat if there is enough money to pay the creditors.
Can an inherited flat with a mortgage be sold?
Yes. The usual approach is to pay off the mortgage with part of the price on the day of signing. If the inheritance was accepted with benefit of inventory, selling before the debts are paid requires the authorisation of all interested parties or must be done by notarial auction.
Do you have to pay Inheritance Tax if the estate has debts?
If you accept, yes, you have to file it, but the deceased's proven debts, such as the mortgage, are deducted. In Madrid, children, spouses and parents also have a 99% relief. If you renounce, you pay nothing.
Sources
- Código Civil (Civil Code), arts. 959 to 1034: acceptance, repudiation and benefit of inventory (CEF Civil-Mercantil)
- Código Civil (Civil Code), section on benefit of inventory and the right to deliberate (Papelea)
- Código Civil (Civil Code), arts. 912 to 929: intestate succession (CEF Civil-Mercantil)
- What happens when the holder of a mortgage loan dies? (Banco de España, Bank Customer Portal, May 2022)
- Personal loans are inherited too (Banco de España, Bank Customer Portal, February 2025)
- If you inherit a home with a mortgage, check this as soon as possible (Diario de León, 15 August 2026)
- What happens to the mortgage if the borrower dies (HelpMyCash, updated February 2024)
- Article 39 of the Ley General Tributaria (General Tax Act): successors of individuals (Iberley)
- The buyer of a second-hand flat is liable for the previous owner's community fee debts (El Español, 20 May 2026)
- Deductible charges, expenses and debts in inheritances (General Council of Administrative Agents, March 2025)
- The reduction for inheriting a previously mortgaged main home (Gómez-Acebo & Pombo, October 2021)
- Renouncing an inheritance when minors are involved (Notarios y Registradores, January 2016)
- Extension of deadlines for filing Inheritance Tax (Comunidad de Madrid e-office, updated 8 October 2026)
- The plusvalía (Consumo Responde, Junta de Andalucía, the Andalusian regional government)