The relief on the main house for IHT isn't much consolation to most expats, ( though it is to the Spanish) as many bereaved people sell up , downsize.
Keeping the house for 10 years means maintenance , taxes etc, and if it hasn't been lived in, cgt when sold.
You say the recipient doesn't need to be resident, so how can that be a benefit of being a resident if a non resident is entitled to it.

It's a benefit to the deceased as it means he can leave his property to a non resident child and the child can claim the allowance. If the deceased was not resident there would be no relief.

European Court rules Spain?s inheritance taxes are illegal. Surinenglish.com

I assume it is there to cover the situation where the previously tax resident owner has become non tax resident when he sells up and leaves Spain but still wants to claim the rollover relief within the two years when of course he is no longer resident.

It is also possibly due to the fact that a tax resident who sells his home and leaves before the end of June effectively becomes retrospectively non tax resident as the Spanish taxman does not allow split tax years - you are either resident or not for the whole of the tax year.

I am sure you are right but I cannot see any time limit in the new law. The tax on non residents is a separate tax that stands on its own. In any event there would still be withholding of part of the sales proceeds, so the onus would be on the non resident to demonstrate that he satisfied the conditions if he wants a refund.

Another point is that the case was brought against the Spain and it is the Spanish government that will have to pay the refunds. However it is the Autonomous Communities that have been discriminating and have collected the taxes. Will the Spanish government seek to recover the costs from the regions? I doubt it.

Having 17 varieties of IHT and a state system on top is clearly inefficient with much duplication. But just think how many accountants, lawyers and funcionarios could be added to the unemployment figures if things were simplified.