It is a direct tax levied on the total value of a person’s assets and rights, less any debts they may have, as of a specific date: December 31st of each year.

It is primarily regulated by Law 19/1991, of June 6th, on Wealth Tax, although its application largely depends on the Autonomous Communities.

Who has to declare wealth tax?

Residents of Spain with a net worldwide net worth exceeding €700,000 (the general minimum exemption established by state regulations) and non-residents who are taxed only on assets and rights located in Spain.

In any case, the obligation to declare, the exemption amount, and the final tax liability depend on the Autonomous Community of residence, since this tax is ceded to the Autonomous Communities, which can establish different minimum exemptions, their own rates, or even total tax breaks, as is the case in the Community of Madrid and Andalusia.

What assets are included?

Among other things, you must declare real estate (homes, commercial premises, garages, etc.), money in checking accounts and deposits, stocks, shares, investment funds, life insurance policies with a surrender value, luxury vehicles, jewelry, works of art, and financial rights (loans, credits granted), etc.

You must always subtract the value of outstanding mortgages and loans or other duly documented personal debts. The result is your net worth.

Are there any important exemptions?

The most relevant exemptions are:

• Primary residence: exempt up to €300,000 per taxpayer

• Family business: may be fully exempt if certain requirements are met

• Assets declared to be of cultural interest, in certain cases

It is important to consider the minimum exemption threshold, which depends on the Autonomous Community:

Although the national system has a minimum of €700,000, some Autonomous Communities modify it, such as Madrid, which offers a 100% tax credit, meaning that in practice it is not paid, or Catalonia, the Valencian Community, the Balearic Islands, etc.: they apply the tax with their own tax scales. Even if no tax is paid, there may be an obligation to file a tax return.

What is the tax and how much is it?

It is a progressive tax: the greater the wealth, the higher the rate.

Under the national system, the rates range approximately from 0.2% to 3.5%, although the Autonomous Communities can modify the scale.

When is the Wealth Tax due? The filing period coincides with the personal income tax return period, from April 1st to June 31st. It is filed electronically with the Tax Agency using Form 714.

What is the current status of this tax?

Although it was gradually phased out, the tax was reintroduced and remains in effect today. Furthermore, since 2023, it has coexisted with the Temporary Solidarity Tax on Large Fortunes, which acts as a supplement for very high net worth individuals.

It is advisable to analyze each specific case in advance and seek specialized advice from US Tax Consultants. Do not hesitate to contact us by phone at +34 915 194 392, by email at info@ustaxconsultans.es , or through a free consultation, which can be booked via the “Book a free appointment” link on our website.