What Is Spain's Wealth Tax?
Spain levies an annual wealth tax (Impuesto sobre el Patrimonio) on the net assets of individuals. This includes property, bank accounts, investments, vehicles, art, and other valuables. It applies to both residents and non-residents who own assets in Spain.
For property owners, your Spanish real estate is included in the taxable base at its highest value: the cadastral value, the acquisition value, or the value verified by the tax authority. In most cases, the acquisition value (purchase price plus buying costs) is the relevant figure.
Tax-Free Allowances
Residents
Spanish tax residents receive a general allowance of EUR 700,000. Additionally, the primary residence is exempt up to EUR 300,000. So a resident's effective threshold before wealth tax kicks in is EUR 1,000,000 (EUR 700,000 general + EUR 300,000 primary residence).
Non-Residents
Non-residents receive the EUR 700,000 general allowance but do not get the primary residence exemption. Only Spanish assets count toward the taxable base, not worldwide assets.
Wealth Tax Rates
Rates are progressive and vary by region. The national scale (applicable in most regions) is:
- EUR 0 to EUR 167,129: 0.2%
- EUR 167,129 to EUR 334,253: 0.3%
- EUR 334,253 to EUR 668,500: 0.5%
- EUR 668,500 to EUR 1,337,000: 0.9%
- EUR 1,337,000 to EUR 2,673,999: 1.3%
- EUR 2,673,999 to EUR 5,347,998: 1.7%
- EUR 5,347,998 to EUR 10,695,996: 2.1%
- Over EUR 10,695,996: 3.5%
Regional Variations
Madrid has traditionally exempted residents from wealth tax (100% bonification). Andalusia abolished its wealth tax for residents in 2023. However, the national Solidarity Tax (see below) overrides some of these regional benefits for high-net-worth individuals.
The Solidarity Tax (ITSGF)
In 2023, Spain introduced the Impuesto Temporal de Solidaridad de las Grandes Fortunas. This "temporary" solidarity tax targets individuals with net assets over EUR 3 million. It was designed to ensure wealthy individuals in regions with no wealth tax (like Madrid) still contribute. Rates are:
- EUR 3,000,000 to EUR 5,347,998: 1.7%
- EUR 5,347,998 to EUR 10,695,996: 2.1%
- Over EUR 10,695,996: 3.5%
Any wealth tax paid at regional level is deducted from the solidarity tax liability. The solidarity tax has been extended through at least 2025, despite initially being labelled as temporary.
Practical Impact for Property Owners
Most individual property purchases on the Costa del Sol fall below the EUR 700,000 threshold, making wealth tax irrelevant. However, if you own multiple properties, or a high-value villa plus other Spanish assets, you may be affected.
Example
- Non-resident owns a villa valued at EUR 1,200,000
- Tax-free allowance: EUR 700,000
- Taxable base: EUR 500,000
- Wealth tax: approximately EUR 1,650 per year
Strategies to Consider
Some owners purchase property through a company structure to manage wealth tax exposure. Others spread ownership between partners. Both strategies have complex legal and tax implications. Always consult a qualified Spanish tax advisor before making structural decisions.
Know Your Total Tax Burden
Wealth tax is one of many annual costs for property owners. Use our free calculator to estimate your total costs, including purchase taxes, annual taxes, and recurring fees, so you understand the full financial picture before investing.