What is Spanish Wealth Tax?
Wealth Tax in Spain is an annual tax, payable on the total net value of your assets held on 31st December.
Who Pays Spanish Wealth Tax?
Both Spanish Residents and Non-Residents are liable for Wealth Tax. Spanish Residents are liable for tax on their worldwide assets, while Non-Residents are liable for tax only on the assets they have situated in Spain.
Spanish Wealth Tax Rates
Residents have a tax-free allowance of €700,000 with an additional allowance of €300,000 for their primary residence. Non-Residents have the same €700,000 tax-free allowance. However, they are not entitled to the extra €300,000 allowance for their main residence.
Main Assets levied by the Wealth Tax
The tax rate applies to the overage above the allowance, ranging from 0.2% up to 2.5%.
- Real estate
- Bank deposits and investments
- UK Pensions (Since Brexit)
- Assets and rights owned by individuals related to professional or business activities
- Luxury assets such as jewellery, boats, cars and other vehicles
- Art objects and antiques
- Life insurance, life annuities and temporary annuities
- Royal rights, administrative concessions and intellectual property rights
Now that Wealth Tax is scrapped in the province of Andalucía, there are significant planning opportunities available for residents and non-residents. Not only from a tax standpoint relating to succession but also pensions and investments. Since the UK left the EU, UK pensions have been included in Wealth Tax calculations (as Spain taxed non-EU pensions). Since this has now been scrapped, there is a lot less obstruction to transferring UK pensions to Spain which makes this area of Spain particularly attractive for the wealthy for retirement.