No wealth tax in Andalusia. On 21 September 2022, the Spanish autonomous region of Andalusia effectively abolished wealth tax. This post provides more information on this recent change.
Wealth tax in Spain
Spain has a wealth tax for individuals. However, the various autonomous regions have the power to make changes to the regulations. Consider, for example, exemptions, deductions and rates. For example, the rules are different in Costa Blanca (Comuninidad Valenciana), Costa Calida (Murcia) and the Balearic Islands.
Wealth tax in Andalusia
A general reduction (bonificación) of 100% of the taxable base for wealth tax. This means that the basis for calculating wealth tax is always 0.00 euros in Andalusia. So, in practice, there is no longer any wealth tax.
The change will apply from income year 2022 and thus assessment year 2023.
Here, we distinguish between tax residents of Spain and non-residents.
Residents. Residents of Spain are taxed on their worldwide net wealth. If your habitual residence is in the autonomous region of Andalusia, you can enjoy the reduction. Simply put, you need to live/live in Andalusia to avoid paying wealth tax.
Non-residents. Non-residents are taxed on their net wealth situated in Spain from the moment they reach a certain threshold net wealth. Generally from you have a net wealth in Spain of 700,000 euros. Regions can adjust this threshold.
EU citizens can choose between the national wealth tax rules and the rules of the autonomous region. In principle, this is the autonomous region where your main economic interests are located.
Specifically, you live in Belgium but have a second residence in Marbella. You then have a choice between the national rules and the rules of the autonomous region of Andalusia. It is then more interesting to choose Andalusia's legislation.
Andalusia, like Madrid, is trying to attract more wealthy individuals. Not only in terms of wealth tax, but also for other taxes, Andalusia is one of the most tax-friendly regions. Consider, for example, personal income tax, inheritance tax and gift tax.