What items make up household contents?

In tax and civil matters, the definition of this concept encompasses the standard physical objects in a home that serve for the daily use of the family. However, not all assets owned by the deceased qualify for this classification for the purposes of Inheritance and Gift Tax.

Assets included in household contents

To determine precisely which items fall into this category, it is necessary to consult the Civil Code and current tax regulations. The following are considered household contents:

• General furniture: tables, chairs, sofas, wardrobes, beds and other furniture intended for the usual fitting out of the home.
• Household appliances and housewares: kitchen appliances, air conditioning and heating systems, tableware, cutlery and bed or table linen.
• Clothing and personal effects: clothes, footwear and individual items for everyday use belonging to the deceased.

Assets excluded from the definition of household contents

There are certain high-value assets that do not form part of household contents, even if they were located inside the deceased person's home. These items notably include:

• High-value jewellery and furs: luxury goods that are taxed under specific rules according to their valuation.
• Works of art and antiques: artistic collections or catalogued historic pieces.
• Cash and bank balances: funds deposited with financial institutions.
• Securities and investments: shares, investment funds, bonds and corporate holdings.
• Real estate properties: homes, commercial premises, garages and land, which constitute the core of the estate but do not form part of the concept of movable property.

How are household contents calculated in tax settlements?

Article 15 of the Inheritance and Gift Tax Act establishes a legal presumption: household contents will be valued at 3% of the net estate of the inheritance, unless the interested parties assign a higher value to these contents or reliably prove their non-existence or that their value is lower than calculated by the tax administration.

Traditionally, the Tax Administration applied this percentage to the total gross value of all estate assets, including bank accounts, shares and real estate. This practice generated high tax assessments on estates with a large financial component, forcing heirs to pay tax on presumed household contents whose value did not correspond to the physical reality of the assets.

The Supreme Court's shift in case law and its tax impact

The criterion for establishing the 3% calculation base changed substantially following the ruling of binding legal doctrine by the Supreme Court. Through several judgments, the high court strictly defined what must be understood by net estate for the purpose of calculating household contents in inheritance tax.

Current case law establishes that not all assets included in the estate mass should be calculated when applying the 3% percentage. Specifically, the following guidelines are established:

• Exclusion of financial assets: money in current accounts, investment funds, deposits, shares and securities are completely excluded from the tax base on which the 3% is calculated.
• Exclusion of non-residential real estate: commercial premises, independent parking spaces, industrial units, rural land or building plots must not be included either, as personal household goods are not kept in them.
• Rented residential properties: if a residential property was let to third parties at the time of death, the contents belong to the tenant or do not form part of the deceased person's personal sphere, so it must also be excluded from the tax base.

Thanks to this legal interpretation, the base on which the 3% presumption is applied is fundamentally restricted to those real estate properties intended as a main residence or second home that can physically contain personal effects and furniture.

The surviving spouse's right and the legal deduction

In the settlement of household contents, there is a significant reduction when one of the spouses dies. Article 1321 of the Civil Code grants the surviving spouse the right to be allocated the contents of the shared main residence without them being counted towards their share of the inheritance.

For tax purposes, inheritance tax regulations allow 3% of the value of the main residence to be deducted to reduce the household contents attributable to the other heirs, provided there is a surviving spouse. This deduction legally recognises that a substantial part of the clothing, personal effects and furniture belonged to or remains in the direct possession of the surviving spouse.

Estate management, real estate and funding needs in inheritance

The valuation of household contents and the final calculation of Inheritance and Gift Tax directly influence the liquidity required to accept an inheritance. In many cases, estates include high-value real estate but little liquid cash in bank accounts, making it difficult to pay taxes within the statutory deadlines.

When heirs require liquidity to pay inheritance tax, proceed with the division of the estate or acquire full ownership of properties by compensating co-heirs, having specialist advice is essential. At this stage of estate management, turning to mortgage credit intermediaries allows for structuring mortgage loans or financing solutions tailored to the specific characteristics of the inheritance and the properties involved.

Is it possible to rebut the 3% presumption established by the Tax Agency?

Yes, the 3% legal presumption is a rebuttable rule (iuris tantum), which means that evidence to the contrary is admissible. However, in administrative practice, proving that household contents have a lower value or do not exist proves complex.

To challenge the 3% valuation automatically set by the tax administration or to request a refund of overpaid tax from settlements already settled, heirs can rely on several means of proof:

1. Notarial inventory record: a formal notarised inspection carried out at the property certifying in detail the contents and condition of existing movable property.
2. Official expert reports and valuation reports: valuations carried out by qualified professionals that determine the true value of the contents.
3. Documentary proof of ownership or condition: sales invoices, documents proving that the home was unoccupied or in a dilapidated state, or tenancy agreements in favour of third parties.

Properly submitting this documentation during the self-assessment period of the tax helps adjust taxation to the actual value of the transferred estate, optimizing the tax burden of the inheritance within the current legal framework.