Inheritance Rules for Co-Owned Property Shares in Mallorca
The death of a co-owner is never an easy subject — but in a co-ownership model, it’s essential to understand how the transition of ownership works and what happens to the deceased’s shares.
Shares Are Treated Like Any Other Personal Asset
When you co-own a property through a Spanish S.L. (Sociedad Limitada), you legally own shares in a company, not direct title to a physical property. These shares are assets that can be inherited, just like shares in any other company.
Here’s what happens when an owner passes away:
- The shares pass into the estate of the deceased and follow inheritance laws of the country where the person was a tax resident.
- Spanish law does not override local inheritance law.
- The Spanish S.L. continues operating as normal, ensuring zero disruption for other co-owners.
Recognition and Transfer of Shares in Spain
Once inheritance documents are processed in the home country, they are recognized in Spain via:
- A certificate of inheritance
- Proof of identity and legal rights of heirs
- Notification to the Spanish company administrator
Once this process is complete, ownership of the shares is transferred to the heir(s), who can:
- Continue to co-own and use the property
- Or sell the shares via Palmallorca’s secondary market
Taxation Depends on Residency and Treaties
Spain has double taxation agreements with most EU/EEA countries and other major jurisdictions (e.g., UK, USA, Australia). In practice:
- Inheritance tax is paid in the country of residence of the deceased or heir.
- Spain recognizes the inheritance but typically does not tax it if your country of residence handles it.
- If no treaty exists, inheritance may be taxed once locally, depending on the country’s rules.
We recommend consulting with your local tax advisor to ensure compliance and clarity.
A Real-World Example
Let’s say an owner from Denmark passes away:
- Danish inheritance laws apply.
- The shares in the Spanish S.L. are listed as part of the estate.
- The Danish estate executor coordinates with the administrator of the S.L. to update the owner’s book and transfer shares.
- If the heirs wish to sell the shares, they can do so via Palmallorca’s secure marketplace.
Selling Inherited Shares Is Straightforward
If heirs or estate administrators prefer to sell, Palmallorca offers:
- A secure secondary marketplace for co-ownership shares
- Auction logic (optional), where a minimum price is set and interested buyers can bid
- First right of refusal for existing co-owners at the same third-party price
This ensures a market-driven process while protecting co-owner alignment.
Summary: Inheritance Without Headaches
- You co-own shares in a Mallorca-based company, not the property directly.
- If you pass away, your heirs inherit those shares.
- No need to “sell the property” — the structure stays intact.
- The company administrator updates the owner’s book, and shares can be retained or sold.
- Palmallorca supports all parties with clarity and discretion.
