Claire and Martin Dubois, who are French, bought a penthouse in 2017 in a city on the Spanish Mediterranean, in both their names, married under a community of property regime. They live there all year round; he works remotely for a company in Lyon and she runs a small language school. On 31 December 2025 the penthouse is worth, under the rules of the tax, 1,100,000 €, and they have 300,000 € of mortgage left. A friend told them that "the main home does not count for wealth tax". That is only partly true, and the part that is not true also affects how much of the mortgage they can deduct.
What article 4.Nueve says
Law 19/1991 exempts "the taxpayer's main home", as defined in the IRPF (Spanish personal income tax) rules, "up to a maximum amount of 300,000 euros". Three ideas follow from that sentence:
- The exemption is not total: it has a cap in euros.
- The cap is per taxpayer, not per home. The tax is individual, and each owner applies their own cap to their share.
- The concept of main home is taken from IRPF. As a general rule, it requires having lived there continuously for three years, with exceptions where circumstances such as a job transfer, a marriage or a separation force an earlier move. What matters is that it is your actual residence on 31 December, which is when the tax falls due.
The guide on how to prove your main home explains what evidence is usually requested: registration on the padrón (the municipal register of residents), utility bills, correspondence, the children's schooling.
The split in a marriage
Article 7 attributes the couple's jointly owned assets to each spouse in halves, unless a different share is proved. Claire and Martin each own half of the penthouse:
| Item | Claire | Martin |
|---|---|---|
| Value of their half | 550,000 € | 550,000 € |
| Main home exemption | 300,000 € | 300,000 € |
| Taxable part | 250,000 € | 250,000 € |
If the penthouse belonged to Martin alone, he would apply 300,000 € and the other 800,000 € would be taxed in full. Joint ownership, in practice, doubles the exemption available for the same house. That does not mean it is worth changing the ownership just for this tax: a gift of half the home to your spouse has a cost in gift tax and effects on IRPF, and that has to be worked out first.
The mortgage: only the part that is not exempt is deducted
This is where the most common mistake lies. Article 9.Tres prevents charges relating to exempt assets from being deducted, and article 25.Tres completes it: debts taken on to acquire exempt assets are not deducted, and where the exemption is partial only "the proportional part" is deducted.
As the Dubois' home is partly exempt, their mortgage is also only partly deductible. Step by step, for each of them:
- Mortgage debt for each spouse: 300,000 € ÷ 2 = 150,000 €.
- Non-exempt proportion of their half of the home: 250,000 ÷ 550,000 = 45.45 %.
- Deductible debt: 150,000 × 250,000 ÷ 550,000 = 68,181.82 €.
- Debt that cannot be deducted: 81,818.18 €.
- Net contribution of the home to each one's tax base: 250,000 − 68,181.82 = 181,818.18 €.
If they had deducted the whole mortgage, each would have declared a net contribution of 100,000 €. The difference, 81,818.18 € per person, is exactly the kind of adjustment that appears in a tax audit. We go into the general approach to debts in which debts I can deduct.
The property is declared at its full value under article 10, and the mortgage goes separately, as a debt. You do not declare "the house minus what is left to pay". Mixing the two leads to applying the exemption to the wrong figure.
What value is taken for the penthouse
Before applying the 300,000 € you need to know how much the home is worth for the purposes of the tax. Article 10 requires the highest of three to be taken: the cadastral value (the official value in the property register kept by the Catastro), the value set or checked by the authorities for other taxes, and the purchase price. In the Dubois' case, the 2017 price was the highest figure. When the home is renovated after the purchase, the question of whether the investment is added has its nuances; we deal with it in what value to give each property.
Situations that change the answer
You moved during the year. Only one home can be the main home on 31 December. If you sold the old one in March and bought the new one in April, the exemption applies to the new one if it meets the IRPF concept.
You have two houses and split your time. The main home is only one. If you spend six months in Madrid and six on the coast, it is the one you can prove to be your actual residence; the other is taxed at its full value.
Garage and storage room. The exemption refers to the home. If the garage or storage room was bought with it and they form a single unit, there are arguments for including them; if they are separate registered properties acquired at a different time, the argument is weaker. It is a point worth reviewing with the deed in front of you rather than taking it for granted.
Separation or divorce. If one of the spouses has left the home, it may stop being their main home, even if they remain a co-owner. Their half would then be taxed without the exemption. How a divorce affects the home in other taxes is covered in divorce and the main home.
You live outside Spain. Someone taxed on a non-resident basis (only on assets in Spain) is not an IRPF taxpayer, and the exemption refers to the IRPF concept of main home. That is why we start from the position that a non-resident's house in Spain is declared in full, even if they spend long periods there. We go into it in what I declare as a non-resident. The same is worth reviewing if you are under the regime in article 93 (the special regime for workers moving to Spain), because opting for it means paying wealth tax on a non-resident basis.
What the exemption does not touch
Although the exempt part does not pay, it does count for the second gateway of the obligation to file: the Agencia Tributaria adds up all assets, whether exempt or not, to check whether you exceed 2,000,000 €. The Dubois, with the penthouse, 400,000 € in funds and a second home in France valued at 520,000 €, each add up to a little over a million, far from two. But a couple with a 2,500,000 € home in the name of just one of them would be obliged to file even if they had nothing else. The details are in from what amount you have to file.
The result for Claire and Martin
With the home correctly counted, the second home in France (which is taxed in Spain because they are resident here, without prejudice to the tax treaty and to the deduction for tax paid abroad in article 32) and the funds, each of them stayed below the tax-free allowance applied by their region, a figure that can be checked in the table on the page about the tax. Neither of them exceeded 2,000,000 € in assets. They did not have to file. What we did recommend was that they keep the year's calculation, because a rise in the value of the funds or an inheritance can change the conclusion in a single tax year, and the regional allowance is not guaranteed from one year to the next.
If your situation is similar and you would like us to review it with the real figures, the wealth tax form collects what is needed. As for the French treatment of that second home, what French law says must be confirmed by the client's adviser there.
The main home exemption, each region's allowance and the rest of the rules for Modelo 714 are brought together on the Salama Tax page on the wealth tax.