What is Spain's Wealth Tax?

Spain's Wealth Tax ("Impuesto sobre el Patrimonio") is a national tax on an individual's net assets above a certain threshold, due annually on December 31st. Both residents and non-residents may be subject, depending on their assets held in Spain.

In 2023, Spain introduced a second layer: the Solidarity Tax on Large Fortunes, targeting net wealth above €3 million.

Who Pays Wealth Tax in Spain?

• Residents: Taxed on worldwide assets.

• Non-residents: Only on Spanish assets.

• General Threshold: €700,000 + €300,000 exemption on main home.

• Comunidad Valenciana: Since 2025, increased its threshold to €1 million, helping exempt about 10,000 residents.

How Much Will You Pay?

1. Standard Wealth Tax (Autonomous)

• National scale: 0.2% to 3.5%.

• Valencia’s 2025 Scale: 0.25% – 3.12%.

• Example: €2 million net wealth in Valencia ≈ €13,000–€40,000.

2. Solidarity Tax (State)

• Over €3M: additional 1.7% to 3.5%, adjusted for amounts already paid in the regional tax.

Key Changes in Comunidad Valenciana (2025)

• Threshold: Raised to €1 million (excl. main residence).

• Rates: Progressively from 0.25% to 3.12%.

• Exemptions: Still applies €300,000 for the main home; up to €1M for disabled individuals.

• Combined Effect: Considerably reduces number of affected taxpayers, while still applying steep rates at high levels.

How to Reduce Your Wealth Tax Bill

1. Change Fiscal Residency: Regions like Madrid, Andalucía or Baleares offer full tax rebates.

2. Use Legal Exemptions: Main residence, family business shares.

3. Optimize Asset Valuation: Carefully assess illiquid assets like art or property.

4. Set Up Holdings: Creating family offices or holding companies can be tax efficient.

5. Coordinate with Solidarity Tax: Avoid double taxation using automatic compensation.

6. Work with a Tax Advisor: Ensure accurate reporting and proactive tax structuring.

Deadlines & Filing

Annual filing via Modelo 714 alongside the income tax return (typically April to June). For 2024’s assessment, the 2025 filing window is April 2 – June 30.

Conclusion

While Spain's Wealth Tax system can be demanding for high-net-worth individuals, especially with the additional solidarity tax, smart planning can mitigate much of the impact. The recent changes in the Valencian Community make it more attractive than in the past, but still less competitive than regions with full rebates.