Spanish Wealth Tax
By Álvaro Aznar Azcárate, solicitor and Spanish Abogado, at Sykes Anderson Perry Limited Solicitors, Advocates and Chartered Tax Advisers in London, England
Please note that the information herein is of a general nature and you should not act or refrain from acting on it without professional advice on the specific facts of your case. No liability is accepted by the author or Sykes Anderson Perry Limited in respect of this article. Law is a complex subject and the above is a basic outline only and is intended only as a general guide
Wealth tax is levied on the assets owned by an individual and is collected by each region in which the country is divided. The regional governments legislate on the rate of tax, exemptions, credits, etc. Therefore, the amount of tax due will depend on where you live or where your assets are.
The tax kicks in when an individual owns assets in Spain in excess of 700,000€, however some regions have lowered the threshold to 500,000€ (Cataluña) or 600,000€ (Valencia) amongst others.
The rate of tax varies between 0.2% to 2.5% in most of the country with the exception of some regions such as the Balearic Islands (0.28% to 3.45%), Cataluña (0.21% TO 2.75%) OR Valencia (0.25 to 3.12%). The regional government of Madrid applies an exemption of 100% over the amount due and, as a result, tax residents in Madrid do not pay Wealth tax. In the Basque Country the government applies generous allowances for the main residence.
Taxation in Spain can be a complicated affair, it is advisable to seek advice prior to acquiring property or relocating to Spain.
Alvaro Aznar Azcárate
Solicitor and Spanish Abogado