Who files, and on what
Spain taxes net wealth annually, on top of income. What is taxed depends entirely on where you are tax resident:
| If you are… | You are taxed on |
|---|---|
| Tax resident in Spain | An unlimited basis: your worldwide net wealth |
| Not resident | A limited basis: only assets and rights located in Spain |
Non-residents can apply the rules of the autonomous region holding the greatest value of their Spanish assets, which in practice changes the result substantially, because the thresholds and the rebates are set region by region. A flat in Marbella and a flat in Barcelona are not treated the same way, and the difference is not marginal.
It is also worth being clear about what this is not. It is not the council rates bill — the IBI — which every owner pays to their town hall and which has nothing to do with this return. And it is not imputed income, which taxes the notional rent of a property at your disposal. The same flat can appear in all three, for three different reasons.
The figures that decide it
- Exempt threshold: 700,000 € under the national rules. Several regions set their own, higher or lower.
- Main home: exempt up to 300,000 € per owner. A couple owning jointly shelters 600,000 € between them.
- National scale: 0.2 % to 3.5 %, in bands, unless your region has its own scale, which most do.
- Debts are deducted at face value, except those taken on to acquire exempt assets.
A return has to be filed if the tax comes out payable or if the value of your assets and rights exceeds 2,000,000 €, even where the bill is nil because of a regional rebate. In Andalusia and in Madrid this is missed constantly, because people hear that the tax is rebated and reasonably conclude there is nothing to do. The rebate is applied on the return, which still has to exist.
The levy on large fortunes
Alongside it sits a temporary solidarity levy on large fortunes, filed on form 718, which applies to net wealth above 3,000,000 € and operates precisely where a regional rebate had reduced the wealth tax bill to zero. What you paid in wealth tax is credited against it, so the same wealth is not taxed twice, but they are two separate returns with two separate filings, and the second one catches people who correctly concluded they owed nothing on the first.
How assets are valued
Each class of asset has its own valuation rule, and it is not always the one you would expect:
| Asset | Value to declare |
|---|---|
| Property | The highest of three: cadastral value, value checked by the administration, or acquisition price |
| Bank accounts | The higher of the balance at 31 December and the average balance over the fourth quarter |
| Listed securities | Average trading value over the fourth quarter |
| Life assurance | Surrender value |
| Jewellery, art and vehicles | Market value at 31 December |
| Debts | Deducted at face value, except those incurred to acquire exempt assets |
The property rule explains a great many unpleasant surprises. A house bought expensively in a region with low cadastral values is taxed on the price paid, not on the cadastral figure — so the administrative value that keeps your council rates low does nothing for you here.
The average balance rule catches the other common case: emptying an account on 30 December achieves nothing, because the fourth-quarter average is taken as well and the higher of the two figures is the one declared.
Among the exemptions, the most valuable are assets genuinely used in a business carried on habitually and directly, and shareholdings in family companies that meet the conditions on management functions and remuneration. These are powerful reliefs with strict requirements, and the requirements are tested every year. They are checked, not assumed.
Non-residents: the part that is easy to get wrong
If you live abroad and own Spanish property, three points matter. Your taxable base is the Spanish assets net of debts secured on them, which means a mortgage over the flat reduces the figure. The region whose rules apply is the one where the greatest value of those assets sits. And the valuation rule for property — the highest of three — frequently puts a holiday home bought at the top of the market well above what its owner assumed. Two people owning jointly each declare their share against their own threshold, which is why joint ownership so often keeps a family below the line.
Your case, in two minutes
What applies to your wealth tax, in two minutes
The form for this service asks only what matters here. At the end you have your map of obligations, the deadlines running against you and a fixed price.
How we handle your wealth tax
We build the inventory of your assets and debts, apply the exempt threshold and the main-home relief, and tell you plainly whether you have to file and what the figure is. For non-residents we also work out which region's rules apply to you, and whether that choice is worth documenting. For clients on one of our recurring lines this return is part of the monthly fee; where there is a large amount of wealth to value for the first time, the initial inventory is quoted separately.
It is filed alongside the income tax campaign, between April and June, in respect of the position at 31 December of the previous year. Which means the planning that affects it — how accounts are held, what is owed against what — has to happen during the year, not in June.
What we ask for, and when it has to be decided
Working this out is an inventory exercise, and the inventory has to be dated 31 December. What we ask for is a list of accounts with the year-end balance and the fourth-quarter average, the year-end statements from any brokerage, the deeds and the latest council rates bill for each property, the outstanding balance on each mortgage, the surrender value of any life policy, and a note of anything unusual: art, jewellery, a boat, a shareholding in a family business.
From that we produce the valuation, apply the reliefs and tell you whether there is a filing obligation, a payment, or both. Where a business or family-company exemption is in play, we look at whether the conditions were actually met during that year rather than assuming they carried over, because they are tested annually and the management and remuneration conditions are the ones that fail.
The part that has to happen during the year
By the time the campaign opens in April, the position at 31 December is fixed and there is nothing left to decide. Anything that affects the figure — how an account is held between spouses, whether a loan is secured against the Spanish property or against something else, whether a purchase completes in December or January — has to be dealt with while the year is still running. That is the argument for looking at this in autumn rather than in spring, particularly in a year with a large transaction in it.
Questions we are asked about your wealth tax
My region rebates it at 100 %. Do I have to file? If your assets exceed 2,000,000 €, yes, even though the bill is nil.
I am not resident and I have a flat in Marbella. Does it affect me? Only if the value of your Spanish assets, less debts, exceeds the threshold that applies to you. You are taxed on a limited basis.
Is it filed with the income tax return? Yes, in the same campaign, from April to June.
Does the mortgage come off? Yes, at its outstanding face value, provided it was not taken on to acquire assets that are themselves exempt.
Is it included in the monthly fee? Yes for our clients. A first-time inventory, where there is a great deal to value, is quoted separately.
Does filing form 714 cover my foreign assets? No. If you are resident here and hold assets abroad, form 720 is a separate information return with its own thresholds and its own valuation rules, and both can be due in the same year.