Many international buyers hear that Andalucía has abolished Wealth Tax, but the reality is a little more nuanced. While most property owners pay no regional Wealth Tax, high-net-worth individuals may still be subject to Spain’s national Solidarity Tax.
This guide explains how Wealth Tax and the Solidarity Tax work, who needs to pay, the current thresholds, and what non-resident property owners should know before investing in Spain.
Key takeaway: Andalucía currently applies a 100% relief on regional Wealth Tax, meaning most property owners pay nothing. However, the national Solidarity Tax may apply to individuals with substantial Spanish assets. For most international property owners, the thresholds are high enough that no Wealth Tax or Solidarity Tax is payable.
Does Andalucía Have Wealth Tax?
Regional Wealth Tax (Impuesto sobre el Patrimonio) still exists in Spain, but Andalucía introduced a 100% relief in 2022, effectively eliminating the tax for most residents and property owners in the region.
However, Spain also introduced the Solidarity Tax on Large Fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas) at national level.
This national tax applies to individuals with significant wealth and is designed to ensure that large fortunes continue to be taxed even in regions where Wealth Tax has been reduced or eliminated.
What Is the Solidarity Tax?
The Solidarity Tax applies only to individuals whose net wealth exceeds the national thresholds after the available allowances have been deducted.
Current rates are:
| Net Wealth | Tax Rate |
|---|---|
| Up to approximately €3,000,000 | 0% |
| €3,000,000 – €5,350,000 | 1.7% |
| €5,350,000 – €10,700,000 | 2.1% |
| Above €10,700,000 | 3.5% |
The tax uses broadly the same valuation principles as Wealth Tax.
What Allowances Apply?
Several important allowances reduce the taxable amount.
These currently include:
- A general personal allowance of €700,000 per individual.
- An additional €300,000 allowance for a Spanish tax resident’s main residence.
Mortgages and other qualifying debts secured against the property also reduce the taxable value.
For many investors, these allowances mean that no Wealth Tax or Solidarity Tax is payable.
How Are Non-Residents Taxed?
Non-residents are generally taxed only on their Spanish assets.
This usually includes:
- Spanish property
- Other qualifying Spanish investments
For property owners, the taxable value is generally based on the highest applicable valuation under Spanish tax rules, less any deductible mortgage.
Each owner is taxed on their own ownership share.
For example, a couple owning a property equally benefits from separate allowances, meaning considerably higher property values can often be held before any tax becomes payable.
Do Most International Buyers Pay Wealth Tax?
In practice, no.
Most international buyers purchasing holiday homes or investment properties on the Costa del Sol fall well below the current thresholds.
The Solidarity Tax mainly affects individuals with very high-value Spanish assets or extensive investment portfolios.
For owners with multiple properties or significant wealth, ownership structures, financing arrangements, and succession planning can all influence future tax exposure.
What About Spanish Tax Residents?
Spanish tax residents are generally taxed on their worldwide assets rather than only their Spanish assets.
They may also have additional reporting obligations, including declarations relating to overseas assets.
Certain qualifying individuals relocating to Spain may benefit from the Beckham Regime, which can significantly affect how wealth is taxed during their first years of Spanish tax residency.
Because these rules depend on individual circumstances, professional tax advice is recommended before relocating.
Frequently Asked Questions
Is Wealth Tax the Same as the Solidarity Tax?
No.
Wealth Tax is a regional tax, while the Solidarity Tax is a national tax introduced for individuals with substantial wealth.
In Andalucía, regional Wealth Tax currently benefits from a 100% relief, while the national Solidarity Tax may still apply to larger fortunes.
Does Owning Property Through a Company Avoid Wealth Tax?
Not necessarily.
Shares in a property-owning company may themselves form part of an individual’s taxable wealth.
The most appropriate ownership structure depends on your overall financial situation and long-term objectives.
When Is the Solidarity Tax Filed?
Where applicable, the Solidarity Tax is generally declared annually for the previous tax year.
Only individuals whose taxable wealth exceeds the legal thresholds are required to file.
Does My Mortgage Reduce My Taxable Wealth?
Yes.
Qualifying debts secured against the Spanish property, including mortgages, generally reduce the taxable value used to calculate Wealth Tax or the Solidarity Tax.
Related Guides
- What Taxes Do Non-Resident Property Owners Pay in Spain?
- How Do You Get a Mortgage in Spain as a Non-Resident?
- Finance Department