Whether wealth tax is payable in Spain, and how much, depends on the region. In response to the abolition of wealth tax in several Spanish regions, the State introduced a new “solidarity tax”, which applies whenever no wealth tax is payable and assets exceed €3,000,000 (€3,700,000 including the tax-free allowance). In some regions, however, wealth tax applies from as little as €500,000.
Below you will first find a table showing the tax-free allowances in each autonomous region, followed by a table showing the wealth tax payable (1) when resident in Catalonia and the solidarity tax payable (2) when resident in Andalusia.
Depending on the region, wealth tax or the new solidarity tax is only payable above the following thresholds:
| Andalusia | €3,700,000 | ||||||||||||||||
| Aragon | €700,000 | ||||||||||||||||
| Asturias | €700,000 | ||||||||||||||||
| Balearic Islands | €3,000,000 | ||||||||||||||||
| Canary Islands | €700,000 | ||||||||||||||||
| Cantabria | €700,000 | ||||||||||||||||
| Castile-La Mancha | €700,000 | ||||||||||||||||
| Castile and León | €700,000 | ||||||||||||||||
| Catalonia | €500,000 | ||||||||||||||||
| Madrid | €3,700,000 | ||||||||||||||||
| Valencia | €1,000,000 | ||||||||||||||||
| Extremadura | €3,700,000 | ||||||||||||||||
| Galicia | €700,000 | ||||||||||||||||
| La Rioja | €700,000 | ||||||||||||||||
| Navarre | €550,000 | ||||||||||||||||
| Basque Country | €800,000 | ||||||||||||||||
| Murcia | €3,700,000 |
1) Assets of €3,700,000 when resident in Catalonia
Since Catalonia has the lowest tax-free allowance (€500,000), below you will find a practical example with figures showing the taxes and tax rates applicable to a resident of Catalonia. The example also includes a main residence valued at €300,000, which is exempt from tax. The total tax-free allowance therefore amounts to €800,000.
| Assets | Tax | Tax rate | ||||||||||||||||||||||
| €800,000.00 | €0.00 | 0.00% | ||||||||||||||||||||||
| €900,000.00 | €210.00 | 0.02% | ||||||||||||||||||||||
| €1,000,000.00 | €454.00 | 0.07% | ||||||||||||||||||||||
| €1,100,000.00 | €769.00 | 0.10% | ||||||||||||||||||||||
| €1,300,000.00 | €1,747.00 | 0.17% | ||||||||||||||||||||||
| €1,800,000.00 | €5,764.00 | 0.32% | ||||||||||||||||||||||
| €2,000,000.00 | €7,654.00 | 0.38% | ||||||||||||||||||||||
| €2,500,000.00 | €13,904.00 | 0.56% | ||||||||||||||||||||||
| €3,000,000.00 | €21,042.00 | 0.70% | ||||||||||||||||||||||
| €3,500,000.00 | €28,046.00 | 0.80% | ||||||||||||||||||||||
| €4,000,000.00 | €36,546.00 | 0.91% | ||||||||||||||||||||||
| €4,500,000.00 | €45,046.00 | 1.00% | ||||||||||||||||||||||
| €5,000,000.00 | €53,546.00 | 1.07% | ||||||||||||||||||||||
| €10,000,000.00 | €154,354.00 | 1.54% | ||||||||||||||||||||||
| €15,000,000.00 | €289,213.00 | 1.93% |
In this specific example, a person resident in Catalonia with assets of €3,700,000, including their main residence, would therefore pay annual wealth tax of approximately €31,200.
2) Assets of €3,700,000 when resident in Andalusia
No tax is payable in this example because Andalusia does not impose wealth tax and the State solidarity tax only applies from €3,700,000. A tax return must nevertheless be filed because the assets exceed €2,000,000.
If the assets exceed €3,700,000, the State “solidarity tax” is also payable in Andalusia and in other regions without wealth tax. However, since this tax has a tax-free allowance of €3,700,000, assets of €5,000,000 would, for example, result in tax of only €22,100.
Wealth tax for non-residents (no residentes)
Even if you are tax resident abroad, you must pay wealth tax or solidarity tax in Spain if your assets located in Spain exceed the tax-free allowances shown above. If you own property in several regions, it is necessary to determine the region (CC.AA) in which most of your assets are located. Although the Constitutional Court upheld the legality of this highly controversial solidarity tax, significant legal doubts remain as to whether it is compatible with applicable European law.
Recommendation: As a general rule, detailed tax planning is always advisable once an individual’s assets exceed €500,000. Restructuring assets through companies or applying for the special tax regime known as the Beckham Law may help reduce or avoid wealth tax.
Our law firm would be pleased to assist you in analysing your specific situation, carrying out the necessary administrative procedures on your behalf and submitting the relevant tax returns. If you are interested or have specific questions regarding this matter, please feel free to contact us by email or telephone. Assistance is available in German.
Author:
Christoph Sander
Lawyer and Tax Advisor
CEO, Partner, Director
info@sspartners.es
Tel: (+34) 951 12 13 06
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