{"id":33022,"date":"2025-09-05T09:25:48","date_gmt":"2025-09-05T07:25:48","guid":{"rendered":"https:\/\/www.confianz.be\/?post_type=podcast&#038;p=33022"},"modified":"2025-12-07T20:04:31","modified_gmt":"2025-12-07T19:04:31","slug":"how-does-wealth-tax-work-in-spain","status":"publish","type":"podcast","link":"https:\/\/www.confianz.be\/en\/podcast\/hoe-werkt-de-vermogensbelasting-in-spanje\/","title":{"rendered":"How does wealth tax work in Spain?"},"content":{"rendered":"<p>In this episode of Confianz: After Hours, we unravel together the complexities of Spain's wealth tax ('Impuesto sobre el Patrimonio'). Discover the differences between residents and non-residents, the tax gap between autonomous regions, and the impact of the \"Solidarity Tax on Large Wealth\".<\/p>\n\n\n\n<p>Listen on <a href=\"https:\/\/youtu.be\/uxyLWLaMJ9w\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/uxyLWLaMJ9w\" rel=\"noreferrer noopener\"><strong>Youtube<\/strong><\/a>, <a href=\"https:\/\/open.spotify.com\/episode\/7z2oLQWCxa8ku3cRf1VS4X?si=ZFWX9SrgTmeB07k-gwUCyQ\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/open.spotify.com\/episode\/7z2oLQWCxa8ku3cRf1VS4X?si=ZFWX9SrgTmeB07k-gwUCyQ\" rel=\"noreferrer noopener\"><strong>Spotify<\/strong> <\/a>or <strong><a href=\"https:\/\/podcasts.apple.com\/us\/podcast\/hoe-werkt-de-vermogensbelasting-in-spanje\/id1819117882?i=1000725105306\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/podcasts.apple.com\/us\/podcast\/hoe-werkt-de-vermogensbelasting-in-spanje\/id1819117882?i=1000725105306\" rel=\"noreferrer noopener\">Apple Podcasts<\/a><\/strong>.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Part 1: The Basics of Spanish Wealth Taxation<\/h4>\n\n\n\n<p><strong><a href=\"https:\/\/www.confianz.be\/en\/spanish-wealth-tax\/\" rel=\"noreferrer noopener\" target=\"_blank\">Read more about wealth tax in Spain.<\/a><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>What is it?<\/strong> An annual tax on the total net value of your assets, calculated on the reference date of <strong>31 December<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>No uniform tax<\/strong>: It is a complex interplay of national legislation and the rules of the <strong>17 autonomous regions<\/strong>, leading to a fiscal patchwork.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Two statutes<\/strong>: The rules differ fundamentally depending on whether you are a tax resident or non-resident.\n<ul class=\"wp-block-list\">\n<li><strong>Fiscal Resident<\/strong>:\n<ul class=\"wp-block-list\">\n<li><strong>Who?<\/strong> You spend more than 183 days a year in Spain, or the centre of your economic or family interests is there.<\/li>\n\n\n\n<li><strong>On what?<\/strong> Taxed on your <strong>global capability<\/strong> (your home in Belgium, securities account in the Netherlands, etc.).<\/li>\n\n\n\n<li><strong>Exemptions (national standard)<\/strong>:\n<ul class=\"wp-block-list\">\n<li>General exemption: <strong>\u20ac700.000<\/strong> per person.<\/li>\n\n\n\n<li>Additional exemption for the main residence (in Spain): <strong>\u20ac300.000<\/strong> per owner.<\/li>\n\n\n\n<li>For a couple, the total exemption can be as high as <strong>\u20ac2.000.000<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Non-Resident<\/strong>:\n<ul class=\"wp-block-list\">\n<li><strong>Who?<\/strong> Someone who lives in Belgium, for example, and has a holiday home in Spain.<\/li>\n\n\n\n<li><strong>On what?<\/strong> Taxed only on your <strong>Spanish possessions<\/strong> (Spanish property, Spanish bank accounts, etc.).<\/li>\n\n\n\n<li><strong>Exemption<\/strong>:\n<ul class=\"wp-block-list\">\n<li>Choice between the general exemption of <strong>\u20ac700.000<\/strong> per person or the regional exemption.<\/li>\n\n\n\n<li><strong>No<\/strong> additional exemption for the (second) home.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Duty to declare (Modelo 714)<\/strong>: You are required to file a return if:\n<ol class=\"wp-block-list\">\n<li>Your tax payable <strong>positive<\/strong> is.<\/li>\n\n\n\n<li>Your <strong>gross power<\/strong> (before deduction of debts) more than <strong>\u20ac2.000.000<\/strong> amounts, even if the final tax is \u20ac0 (as in Madrid or Andalusia).<\/li>\n<\/ol>\n<\/li>\n\n\n\n<li><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Modelo 720<\/strong>: A separate declaration requirement for residents with foreign assets of more than <strong>\u20ac50.000<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Part 2: The Differences between Regions<\/h4>\n\n\n\n<p>The region where you live or where your assets are located has a huge impact.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Madrid &amp; Andalusia: The Fiscal Freeholds<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Rule<\/strong>: Pass a <strong>100% tax credit<\/strong> (bonificaci\u00f3n) added.<\/li>\n\n\n\n<li><strong>Result<\/strong>: You pay in practice <strong>\u20ac0<\/strong> to regional wealth tax.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Catalonia: The Strict Regime<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Exemption (residents)<\/strong>: Reduced to <strong>\u20ac500.000<\/strong>.<\/li>\n\n\n\n<li><strong>Rates<\/strong>: Higher than the national scale, with a top rate of <strong>3,48%<\/strong> for assets above \u20ac20 million.<\/li>\n\n\n\n<li><strong>Nuance<\/strong>: Non-residents can opt for the more advantageous national rules (\u20ac700,000 exemption).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The Balearic Islands (Mallorca, Ibiza): The Strategic Midway<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Exemption (residents)<\/strong>: Increased to <strong>\u20ac3.000.000<\/strong> per person (since 2024).<\/li>\n\n\n\n<li><strong>Strategy<\/strong>: Makes the islands very attractive for wealth below 3 million, but retains a tax burden (up to <strong>3,45%<\/strong>) for powers above that.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Valencian Community (Costa Blanca): region in transition<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Assessment year 2024<\/strong>: A strict regime with an exemption from <strong>\u20ac500.000<\/strong> for residents and rates up to <strong>3,5%<\/strong>.<\/li>\n\n\n\n<li><strong>BIG CHANGE for 2025<\/strong>: The exemption for residents will be <strong>doubled to \u20ac1,000,000<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Part 3: The Solidarity Tax on Large Wealth (ITSGF)<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>What is it?<\/strong> A <strong>additional national tax<\/strong> which was introduced in response to the 100% rebate in regions such as Madrid and Andalusia.<\/li>\n\n\n\n<li><strong>For whom.<\/strong> Anyone (both resident and non-resident) with net assets of more than <strong>\u20ac3.000.000<\/strong>.<\/li>\n\n\n\n<li><strong>How does it work?<\/strong>\n<ul class=\"wp-block-list\">\n<li>It is a \"tax floor\". The amount you pay in regional wealth tax is <strong>fully deductible<\/strong>.<\/li>\n\n\n\n<li><strong>Example Madrid<\/strong>: You pay \u20ac0 to the region, so you pay the <strong>complete<\/strong> Solidarity tax to the state.<\/li>\n\n\n\n<li><strong>Example Catalonia<\/strong>: The regional tax you pay is usually higher than the Solidarity Tax. You therefore pay <strong>\u20ac0<\/strong> To Solidarity Tax.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rates<\/strong>:\n<ul class=\"wp-block-list\">\n<li><strong>1,7%<\/strong> on assets between \u20ac3,000,001 and \u20ac5,347,998<\/li>\n\n\n\n<li><strong>2,1%<\/strong> on assets between \u20ac5,347,998 and \u20ac10,695,996<\/li>\n\n\n\n<li><strong>3,5%<\/strong> On assets above \u20ac10,695,996<\/li>\n\n\n\n<li><em>Note for residents: These rates apply to the taxable base after the general exemption of \u20ac700,000. The tax therefore effectively affects assets from <\/em><strong><em>\u20ac3.700.000<\/em><\/strong><em>.<\/em><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Part 4: Strategy, Optimisation &amp; Final Advice<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The 60% rule (for residents only)<\/strong>: Your total burden of income tax and wealth tax should not exceed 60% of your taxable income. This can lead to a reduction in wealth tax by <strong>maximum 80%<\/strong>.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.confianz.be\/en\/spanish-wealth-tax-for-second-homes\/\" target=\"_blank\" rel=\"noreferrer noopener\">Update December 2025: Spain's Supreme Court has ruled that the 60-percent rule also applies to non-residents.<\/a><\/li>\n<\/ul>\n\n\n\n<p>Example:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A resident has net assets of \u20ac8 million. His initial computed wealth tax is \u20ac112,000. Now suppose his total taxable income in personal income tax (his salary plus some savings income) is \u20ac50,000, and he pays \u20ac12,500 in income tax on that.&nbsp;&nbsp;<\/li>\n\n\n\n<li>Now we apply the 60% rule:<\/li>\n\n\n\n<li>First, we add up the two taxes: \u20ac12,500 (income tax) + \u20ac112,000 (wealth tax) = \u20ac124,500.&nbsp;&nbsp;<\/li>\n\n\n\n<li>We then calculate the limit: 60% of his taxable income of \u20ac50,000 is \u20ac30,000.&nbsp;&nbsp;<\/li>\n\n\n\n<li>We see that his total tax burden of \u20ac124,500 far exceeds the limit of \u20ac30,000. So the rule kicks in. The theoretical reduction would be \u20ac124,500 minus \u20ac30,000, i.e. \u20ac94,500.<\/li>\n\n\n\n<li>But now comes the lower limit: the reduction can never be more than 80% of the original wealth tax. 80% of \u20ac112,000 is \u20ac89,600.&nbsp;&nbsp;<\/li>\n\n\n\n<li>Because the theoretical reduction (\u20ac94,500) is higher than the maximum reduction (\u20ac89,600), the reduction is limited to \u20ac89,600.<\/li>\n\n\n\n<li>So the final capital gains tax is: \u20ac112,000 minus the maximum reduction of \u20ac89,600, amounting to \u20ac22,400. That is exactly 20% of the original assessment. So thanks to this rule, his wealth tax is reduced by 80%.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Exemption for Business Assets<\/strong>: Assets associated with a real, active business can be exempted under very strict conditions.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>End-of-year planning<\/strong>: The reference date is <strong>31 December<\/strong>. Actions such as taking out a mortgage, spreading property or making a donation must be completed before this date.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Five points to remember:<\/strong><\/h4>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Your tax status determines everything.<\/li>\n\n\n\n<li><strong>Location, Location, Valuation<\/strong>: The choice of region is fundamental.<\/li>\n\n\n\n<li><strong>Solidarity tax is Real and Permanent<\/strong>: It neutralises tax benefits in regions like Madrid for wealth above \u20ac3.7 million.<\/li>\n\n\n\n<li><strong>Planning is Proactive<\/strong>: The deadline is December 31.<\/li>\n\n\n\n<li><strong>Find Professional Advice<\/strong>: The complexity requires expert guidance.<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>More information?<\/strong> Visit the<strong><a href=\"\/en\/www-confianz-be\/\" rel=\"noreferrer noopener\" target=\"_blank\"> website<\/a><\/strong> or Confianz's social media channels for more details and contact information.<\/p>","protected":false},"author":2,"featured_media":33023,"template":"","podcast-onderwerp":[943],"class_list":["post-33022","podcast","type-podcast","status-publish","has-post-thumbnail","hentry","podcast-onderwerp-belastingen"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/podcast\/33022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/podcast"}],"about":[{"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/types\/podcast"}],"author":[{"embeddable":true,"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/users\/2"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/media\/33023"}],"wp:attachment":[{"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/media?parent=33022"}],"wp:term":[{"taxonomy":"podcast-onderwerp","embeddable":true,"href":"https:\/\/www.confianz.be\/en\/wp-json\/wp\/v2\/podcast-onderwerp?post=33022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}