Wealth tax in Spain: Spain has had a wealth tax for about ten years that sometimes causes dissatisfaction, because it is levied on top of the annual cadastral income (counciil tax) and also on top of the tax of non-residents, where appropriate. This wealth tax is to be filed annually, on a voluntary basis and it goes without saying that we track, calculate and file this for our clients so you don’t have to worry about this!

Wealth tax in Spain

The wealth tax in Spain is mandatory when you meet a number of conditions. However, these are different if you are a resident in Spain or not and there is generally (with a few exceptions) a tax-free allowance of €700,000. In other words, most people only need to file wealth tax in Spain when their wealth in Spain exceeds €700,000.

The exception to this is when your assets amount to more than €2,000,000 prior to the deduction of debts. Then this declaration must also be submitted, but you will not have to pay anything, if the net result is below the €700,000 as there is no tax due in this case.

If you are not a tax resident in Spain:

So, for example, you live in the UK and have a second residence in Spain, and your assets in Spain are more than €700,000 (national scale), you must submit the return and pay the tax due.

  • You only need to declare the assets you have on Spanish territory, not your assets in your home country.
  • Deductions from debts (mortgage loans, for example) are allowed.

If the net final result is more than €700,000 per person, this declaration and the tax to be paid are mandatory.

If you are a tax resident in Spain:

Then you must declare your personal worldwide assets in Spain and will be taxed extra on this if the net result is higher than the €700,000 exemption.

  • Deductions from debts (mortgage loans, for example) are allowed.
  • Deduction from your owner-occupied home (with a limit of €300,000) is also allowed.

In this way it is possible that you as a couple can have up to € 2,000,000 power without being taxed on it.