Who has to file, the tax-free allowance, how assets are valued and how the tax on large fortunes fits in. An English-speaking tax adviser reviews your case.
Wealth tax (Impuesto sobre el Patrimonio) is charged on your net wealth at 31 December: assets and rights minus debts. It is a national tax devolved to the regions (autonomous communities): what you pay depends on where you live.
The tax on large fortunes
Since 2022, the Temporary Solidarity Tax on Large Fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas), a complementary national tax, taxes the part of the taxable base above €3,000,000, with the same allowance and exemption, at rates from 1.7% to 3.5%, subtracting the wealth tax paid. It has been extended. Form 718 (modelo 718), in July.
Joint limit with income tax
The sum of the tax due under personal income tax (IRPF) and wealth tax cannot exceed 60% of the IRPF taxable base (with some adjustments). If it does, the wealth tax due is reduced, by a maximum of 80%. A tax adviser reviews your planning before 31 December.
Deadline and non-residents
Form 714 goes with the income tax return, until 30 June. Non-residents and anyone who opts for the Beckham Law are taxed only on what they have in Spain. A resident’s assets abroad count and may oblige you to file Form 720 (modelo 720); if you own property, see property tax.
Who has to pay it
Under the national rules, the tax-free allowance (mínimo exento) is €700,000 and the main home (vivienda habitual) is exempt up to €300,000, but each region can set its own allowance, rates and rebates. You file the return (Form 714, modelo 714) even if there is nothing to pay if your assets and rights, without subtracting debts, exceed €2,000,000.
Checklist
Which assets are exempt from wealth tax
Four exemptions to go through before adding up what you have.
The main home, up to €300,000.
The business assets of a self-employed person and shareholdings in the family business, if the requirements are met.
Vested rights in pension plans.
Household contents, except jewellery, furs, vehicles, boats, works of art and antiques.
Valuation
How assets are valued for wealth tax
Find what you have: each type of asset is valued under its own rule.
01
Property
At the highest of the cadastral value (valor catastral), the value determined or checked by the tax authorities and the acquisition price.
02
Bank accounts
At the higher of the balance at 31 December and the average balance for the last quarter.
03
Listed shares
At their average quoted price for the fourth quarter.
04
Debts
Those that are evidenced are subtracted, such as the outstanding capital on a mortgage.
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Frequently asked questions
Questions about wealth tax
From what amount do you pay wealth tax?
Under the national rules, from €700,000 of net wealth, plus up to €300,000 exempt for the main home. Each region (autonomous community) can change the allowance and apply rebates.
What is the tax on large fortunes?
A complementary national tax for very large fortunes: it taxes the part of the taxable base above €3,000,000 and subtracts the wealth tax paid. In the regions that give a rebate on wealth tax, it is paid to the State.
How is a home valued for wealth tax?
At the highest of the cadastral value, the value determined or checked by the tax authorities for the purposes of other taxes and the purchase price.
Do I have to file a wealth tax return even if I pay nothing?
Yes, if your assets and rights are worth more than €2,000,000, even if the tax due is zero because of the tax-free allowance or a regional rebate.
Can wealth tax be reduced legally?
Yes, with planning: the family business exemption, the joint limit with income tax or how you hold your assets. Before 31 December, the date on which wealth is valued.
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