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Impuesto sobre el patrimonio - Wealth tax

Wealth Tax or “Impuesto sobre el Patrimonio”. Are your Spanish assets taxable?

Wealth Tax  or “Impuesto sobre el Patrimonio”.

This is a tax which taxes the wealth and assets from citizens, for both, Spanish residents, and non residents. It was almost cancelled time ago, but the Spanish government is extended its validity every year with the approval of the General Public Budget Law. And, it is confirmed it is extended for 2017.

For Spanish tax residents, this Tax taxes the Wealth and assets wherever they are. It means, those which are in Spain and overseas.

For Non-Spanish residents, this Tax taxes the Wealth and assets from non residents in Spain.

This Tax  is regulated in different ways depending of the Spanish regions where the Spanish resident has its permanent residence, or for non-residents, where they have the highest concentration of assets in Spain.

Depending on the region, there is a non-taxable minimum, or “minimum exempt”,  which is exempted on this tax. This amount varies from 400.000 EUR in Aragon, to 500.000 EUR in Catalonia, 600.000 EUR in Valencia Region, 700.000 EUR in Andalucía and Balearic Islands, Madrid, etc. In this way, Spanish residents with a total Wealth lower from this minimum, or non-residents with assets in Spain in a value lower from this minimum, they are not taxed. And they are taxed only from the amount on top of this figure.

An example:

A British non-resident in Valencia region, with properties, bank accounts, etc, for a total value of 800.000 EUR: As this amount is higher of the minimum exempted in Valencia (600.000 EUR), then, it will be obligatory to present the Wealth Tax declaration for 800.000-600.000 EUR = 200.000 EUR. So the base of the tax will be 200.000 EUR.

For Spanish tax residents, with permanent residence in Spain, there are other reductions in taxes for the value of the permanent home, varying from 300.000-400.000 EUR depending on the regions.

The rate taxable on this Tax varies also depending from the different regions. In this way, Andalucia tax rates are from 0,24 % – 3,03 %, Balearic Islands from 0,28 % – 3,45 %, Catalonia from 0,21 % to 2,75 %, Murcia from 0,24 % – 3 %, and Valencia from 0,25 % to 3,12 %.

(This rate taxes only the amount of the value of the assets over the minimum exempted. So, in the case of the above example, this rate would tax on the base of 200.000 EUR.)

So, for those foreigners who may have Wealth in other countries for a value higher than 500.000 -700.000 EUR and would like to be tax residents in Spain, or for those that, being non-residents in Spain, are thinking to buy properties with a value of 500.000-700.000 EUR or higher, it is recommendable to get the proper tax advice from specialist in relation to this tax.

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