Henrik Lindqvist is Swedish, a retired engineer, and since 2020 he has lived on a residential estate on the Andalusian coast. On 31 December 2025 his wealth looked like this: the house he lives in, valued for the purposes of the tax at 700,000 €; a portfolio of funds and shares with a bank in Luxembourg worth 1,250,000 €; and 150,000 € in a Spanish account. To buy part of the portfolio he took out a loan secured on securities in 2023, and at the end of the year he still owed 600,000 € on it. His Swedish bank told him that "with that debt" his net wealth was well below any threshold. He wrote to us to confirm that he did not have to file anything. He did have to file.
The two gateways in article 37
Law 19/1991, which governs the Spanish wealth tax (Patrimonio, as it is known in Spain), does not set a single threshold. Its article 37 requires a return from taxpayers whose tax, once deductions and reliefs have been applied, "is payable", or, where that is not the case, from those whose assets or rights are worth "more than 2,000,000 euros".
They are two independent tests. Crossing one of them is enough:
| Gateway | What is looked at | Debts deducted | Exemptions deducted | Consequence |
|---|---|---|---|---|
| First | The final tax, after the tax-free allowance, the rate scale, the joint cap and the reliefs | Yes | Yes | If something is left to pay, you file |
| Second | The value of all assets and rights | No | No: exempt assets are added too | If it exceeds 2,000,000 €, you file even if the tax is zero |
The second column of the table is the one that surprises people. The Agencia Tributaria, the Spanish tax agency, explains on its website that, to check the two million, all the holder's assets and rights are counted, whether exempt or not, without taking into account charges that reduce their value or personal debts. In other words, the main home counts in full, exempt shares in the family business count, and Henrik's loan deducts nothing.
Henrik's figures, first with the second gateway
- Main home: 700,000 €.
- Portfolio in Luxembourg: 1,250,000 €.
- Account in Spain: 150,000 €.
- Total assets and rights: 2,100,000 €.
It exceeds 2,000,000 €. That alone makes him obliged to file, and nothing else needs to be calculated to know that Modelo 714 applies to him. The 600,000 € loan is real and deductible, but it plays no part in this test.
And now the first gateway, to find out whether he also pays
Having to file does not mean having to pay. To find out, the tax base has to be built. We will do it with the national rules, only to illustrate the mechanism; Henrik lives in an autonomous community (one of Spain's regions) that has its own rules, and the real result depends on them.
- Assets: 2,100,000 €.
- Exemption for the main home (art. 4.Nueve): up to 300,000 €. That leaves 1,800,000 €.
- Deductible debt: the loan financed securities that are not exempt, so it is deducted in full (art. 9.Dos). That leaves a tax base of 1,200,000 €.
- National tax-free allowance (art. 28.Dos): 700,000 €. Taxable base: 500,000 €.
- National scale in article 30.2: the first 334,252.88 € pay 835.63 €, and the rest, 165,747.12 €, is taxed at 0.5 %, which is 828.74 €.
- Gross tax on the national scale: 1,664.37 €.
From there, the joint cap with income tax and the region's reliefs come into play. If the region grants relief on the tax, it may end up at zero, and Henrik still files, because the second gateway has already opened. Each region's tax-free allowance, scale and relief are in the table on the page about the wealth tax; we do not repeat them here because they change often and are best checked for the specific tax year.
Anyone whose assets exceed 2,000,000 € and who does not file because "it comes out at zero anyway" is failing to meet a formal obligation. If the tax authorities detect it later, the problem is not the tax, which may still be zero, but the offence of not filing and the attention it draws to the other taxes for the same year.
Why the debt is so misleading
Henrik's mistake is very common among people who come from countries where wealth is always discussed in net terms. In Spain, the second gateway is deliberately gross. It makes sense from the point of view of control: anyone with more than two million in assets must tell Hacienda, as the Spanish tax office is commonly called, even if they have financed them with debt, because the debt is precisely what the authorities want to be able to review.
The opposite case also exists. His neighbour Ingrid, a Norwegian widow, has 1,400,000 € in assets and no debts. She does not cross the second gateway. If her taxable base exceeds her region's tax-free allowance and the region does not relieve the whole tax, she will cross the first; if not, she files nothing. Two people, two results, with similar net wealth.
What counts towards the two million
It is worth not falling short when adding up. Among other things, the following count:
- Property, in Spain and abroad, under the valuation rule in article 10: the highest of the cadastral value, the value checked by the authorities and the purchase price. We go into it in what value to give your property.
- Bank accounts, at the balance on 31 December or at the average balance for the fourth quarter if that is higher (art. 12).
- Shares, funds and insurance policies, each with its own rule, explained in how shares and funds are valued.
- Cars, jewellery, boats, art and gold, at market value, which we deal with in cars, art, jewellery and gold.
- Exempt assets: the main home, shares in the family business, rights in pension plans. They do not pay, but they count towards this threshold.
Household contents are exempt (art. 4.Cuatro), but the law itself takes out of them jewellery, vehicles, boats and works of art, which are valued separately and weigh heavily in this threshold.
The date that matters
The tax falls due on 31 December (art. 29). What counts is what you owned on that day. If Henrik had sold the portfolio on 20 December and kept the money in his account, the total would be similar; if he had given it to his children in November, it would not form part of his wealth, although the gift would need looking at. And article 3 adds a presumption worth remembering: what you owned at the previous accrual date is presumed still to be yours, unless you prove that you transferred it or lost it.
For accounts there is an additional detail: if someone pays a loan into their account in the last quarter to inflate the average balance or reduce the calculation, article 12 neutralises it, because that deposit is not counted in the average balance and the debt is not deducted either.
What documents to gather to know which side you are on
Checking the threshold takes an afternoon if you have what is needed: IBI receipts (the local property tax, for the cadastral value), purchase deeds, bank certificates at 31 December with the average balance for the fourth quarter, the broker's tax report, and valuations of vehicles or art if there are any. If you would like us to review it with you, the wealth tax form is designed to gather exactly that.
Non-residents and people under the regime in article 93 (the special regime for workers moving to Spain) apply these same two gateways, but only to assets located in Spain; we explain it in what goes into my wealth tax as a non-resident. And if your region relieves the tax, the question that concerns you is whether you have to file anyway. The guide on the obligation to file wealth tax covers the less common cases.
What happened with Henrik
He filed Modelo 714 for 2025 on time, with his tax calculated under his region's rules. When we reviewed his details we saw that in 2024 he had also exceeded two million and had not filed; we put it in order as explained in I have never filed it. We always warn of the same thing: regularising reduces the risk, but there is no way to guarantee how the authorities will assess each item.
Modelo 714, its thresholds, the main home and the table of allowances and reliefs by region are dealt with together on the Salama Tax page on the wealth tax.