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The Wealth Tax in Spain is an annual tax, payable on the total net value of your assets held on 31st December. The total net value is understood as: All assets and rights of economic content owned by a natural person deducting charges and encumbrances which diminish its value, as well as personal debts and obligations.
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Those required to submit a wealth tax declaration form in Spain will have from April to June 30th of each year, coinciding with the income tax period.
The IP is a strictly individual tax, so a married couple must submit one form each and for example the ownership of the property and rights which are common to both, shall be attributed in half to each of them. The form to be sent is the form 714.
Please note that tax rates, scope and reliefs may change and we advise that you to seek professional advice from Tax advisors who can take care of the Wealth Tax for you.
A taxpayer's net worth is calculated by adding up the net value of all his assets, valued according to specific rules for each type (e.g., homes by the highest value among several criteria, bank accounts by the highest balance between two dates). After applying the deductions, the Wealth Tax is calculated, which is progressive: the higher the wealth, the higher the tax.
In Spain, the tax rate varies between 0.20% and 3.50% at the national level, while in the Valencian Community it ranges between 0.25% and 3.5
Some assets are exempt from Wealth Tax, and although there are not many, it is important to take them into account before making any purchase or investment, as they can help to reduce the taxable base and, therefore, the amount to be paid.
In addition to considering these exempt assets, there is a more advanced and effective strategy to reduce the tax burden: the restructuring of investments. This consists of reorganizing assets so that they benefit from a specific provision of Spanish law. According to this rule, the sum of Wealth Tax and Personal Income Tax (IRPF) cannot exceed 60 % of the sum of the general and savings IRPF taxable bases.
This limit applies exclusively to taxpayers subject to personal tax liability (i.e. tax residents in Spain), and represents a significant opportunity for strategic investment planning. By properly structuring assets within the legal framework, it is possible to significantly reduce the cost of Wealth Tax.
The Temporary Solidarity Tax on Large Fortunes is a direct tax, individual and complementary to the Wealth Tax, which is levied on the net wealth of individuals with a value in excess of 3,000,000 euros, under the terms set out in this article.
For the purposes of this tax, the net wealth of an individual shall be constituted by all the assets and rights of economic content that they own, deducting any charges and encumbrances that reduce their value, as well as the personal debts and obligations for which they are liable.
In order to avoid double taxation, Solidarity Tax payers are only liable for the part of their assets that has not been taxed by their Autonomous Region under the Wealth Tax. Thus, a deduction of the amount paid in Wealth Tax is applied to the Solidarity Tax on Large Fortunes. That is, the amount paid in Wealth Tax is deducted from the payment of this new tax.
The Temporary Solidarity Tax on Large Fortunes shall be applied throughout Spanish territory, without detriment to the tax systems in force in the Historical Territories of the Basque Country and the Community of Navarra, respectively, and to the provisions of international treaties or conventions that have become part of the domestic legal system.
| Net base -Up to Euros | Quota -Euros | Remaining net base -Up to Euros | Net base -Up to Euros |
| 0.00 | 0.00 | 3,000,000.00 | 0.00 |
| 3,000,000.00 | 0.00 | 2,347,998.03 | 1.7 |
| 5,347,998.03 | 39,915.97 | 5,347,998.03 | 2.1 |
| 10,685,996.06 | 152,223.93 | Onwards | 3.5 |
Before answering this question, we must point out that there is no single answer, as the Autonomous Communities have the power to establish their own wealth taxes. One thing that is the same in any part of Spain is that the higher the wealth, the higher the percentage to be paid, as it is a progressive tax. If we take as an example the national rate, which is applied in those Communities that do not have their own tax, the wealth tax ranges between 0.2% and 3.5%.
Yes, wealth tax in Spain is payable annually and is levied on the total net value of the assets registered on 31 December. Therefore, it is a tax that must be paid in the scheduled period each year as long as we are within the established scales
Although there are similarities between the two taxes, such as the fact that both are paid annually, they are not the same. While the property tax only accounts for real estate, the wealth tax accounts for all assets: Real estate, bank deposits, investments, all type of assets and rights, etc.
The main difference between these two taxes is that Income Tax is levied on annual income, all the money that has been earned in that particular year; income from real estate (rents), interest, salaries or dividend payments, for example.
Whereas Wealth Tax is levied on the personal fortune or wealth; i.e. the net wealth of individuals, the set of assets and rights of economic content of which they are the owner, minus the charges and encumbrances that reduce their value, as well as the debts and personal obligations for which the owner is liable.
Apart from Spain, Wealth Tax is also paid in other countries such as Liechtenstein, Norway, Switzerland and France, among others.
