Wealth tax in Spain is a direct tax imposed on the affluent to lower wealth disparity. According to this concept, your tax burden will directly correlate with the worth of your assets. In Spain, the wealth tax ranges from 0.2% to 2.5%. Spain’s income and capital gains taxes are different from this tax. Should your entire asset value surpass €1,000,000, you might be liable to wealth tax. The tax is payable on all of a Spanish citizen’s worldwide holdings. Non-residents only pay this tax on their Spanish. Continue reading to learn more.
The Spanish Wealth Tax: Who Pays It?
In Spain, you have to file a wealth tax declaration if your total assets and estate reach a particular sum. Real estate, bank accounts, insurance, and shares are all subject to the wealth tax. The highest amount is €700,000. The independent areas, however, have the authority to raise or lower these boundaries:
- Valencian Region and Costa Blanca: €500,000
- Costa del Sol was part of the now-dissolved Andalusia, but the solidarity tax remains.
- Balearic Islands: General legislation is applicable; tax is due after €700,000.
You must also file a declaration if your tax owing is negative, but your assets exceed €2,000,000.
Even if I don’t pay taxes in Spain, do I still need to declare?
Yes, but only concerning the Spanish-based assets, as they are situated, exercisable, or required to be performed in Spain. In cases when the assets and rights that non-resident taxpayers possess and for which taxation is necessary have the highest value, they may employ the regulations that the Autonomous Community has authorised.
Can Expenses or Debt Be Subtracted?
One debt that is eligible for deduction is a mortgage. A maximum of €300,000 can be subtracted from the value of the primary habitation. Additionally, shares of a firm are exempt if:
- The proprietor owns over 5% of the business (20% family group).
- The company is running.
- You have to work for the company and hold a managerial position.
Which Countries Have Wealth Taxes?
Switzerland, Norway, Liechtenstein, and Spain are among the countries that also demand the disclosure of this tax. In Norway, this tax only applies to amounts up to 1.5 million Kroner, or 150,000 euros, with an applicable share of 0.85%.
Conversely, several countries have eliminated the wealth tax, including Sweden, Luxembourg, Denmark, Germany, Austria, and, more recently, France.
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