Wealth tax in Spain for non-residents: thresholds, rates and how to reduce your liability

If you own property in Spain as a non-resident, you may be liable for wealth tax — even if you live thousands of miles away. Spain is one of the few European countries that still levies an annual tax on the net value of assets held within its borders. This article explains how the Impuesto sobre el Patrimonio works for non-residents, what thresholds apply, how rates vary between regions, and what the Solidarity Tax means for high-net-worth owners. 

At Ábaco Advisers, we provide independent legal and fiscal advice to foreign property owners, helping them plan their tax position with confidence. If you are new to taxes in Spain, this guide will give you a clear starting point.

What is wealth tax in Spain and does it apply to non-residents?

Spain’s wealth tax applies to both residents and non-residents. Non-residents are taxed exclusively on assets located in Spain, while residents are taxed on their worldwide net worth. Understanding whether you qualify as a resident or non-resident in Spain is therefore the essential first step.

The Impuesto sobre el Patrimonio is governed by Ley 19/1991, de 6 de junio. Originally introduced in 1991, it was briefly abolished in 2008 before being reinstated in 2011 through Real Decreto-ley 13/2011 as a temporary measure during the financial crisis. It has remained in force ever since. The tax is an annual levy on the net value of an individual’s assets as of 31 December each year.

Under Article 5 of Ley 19/1991, non-residents (those subject to “obligación real“) are only taxed on goods and rights that are located in Spain, can be exercised in Spain, or must be fulfilled in Spanish territory. This typically includes real estate, bank accounts held in Spanish institutions, and shares in Spanish companies. According to Article 9.4 of the same law, only debts relating to Spanish-based assets, such as a mortgage on a Spanish property, are deductible from the taxable base.

For non-residents, the tax return is filed using Modelo 714, generally between April and June of the year following the tax period. You may also want to familiarise yourself with Modelo 210 for non-resident income tax, which is a separate but related obligation. Non-residents must also appoint a fiscal representative in Spain under Article 6 of Ley 19/1991 if the tax authorities so require, and failure to do so can result in a penalty of €1,000.

What are the current wealth tax thresholds and rates?

Non-residents benefit from a €700,000 tax-free allowance on their Spanish assets. Progressive rates then apply from 0.2% to 3.5% on the net value exceeding that threshold.

Article 28 of Ley 19/1991 establishes the base liquidable by reducing the taxable base by the minimum exempt amount. For non-residents, the applicable minimum is the state-level €700,000 established under Disposición Adicional Cuarta of the same law. Unlike residents, non-residents cannot claim the additional €300,000 exemption for a habitual dwelling (Article 4.9 of Ley 19/1991), as the property in Spain is not their primary residence for tax purposes.

Article 30 of Ley 19/1991 sets out the state-level progressive rates. The following table shows the current brackets as established in the legislation:

As a practical example: a non-resident who owns a single property valued at €900,000 with no mortgage would have a taxable base of €200,000 after the €700,000 allowance. The approximate annual wealth tax liability would be around €432. This is separate from other non-resident property taxes such as IBI and imputed income tax.

Under Article 37 of Ley 19/1991, you are obliged to file a wealth tax return if your gross assets in Spain exceed €2,000,000, even if no tax is due after exemptions. For an overview of all Spanish tax forms foreigners should know, consult our dedicated guide.

How does wealth tax differ between autonomous communities?

Regional differences are significant. Spain’s autonomous communities have the power to modify wealth tax rates, allowances, and bonifications for their residents, though non-residents have traditionally been subject to state-level rules.

Under Disposición Adicional Cuarta of Ley 19/1991, non-residents now have the option to apply either the state regulations or the autonomous community regulations of the region in which the highest value of their Spanish assets is located. This is a relevant change that gives non-residents some flexibility, depending on where their property is situated.

The following table summarises how the most popular regions for foreign property buyers compare in terms of wealth tax treatment for 2025/2026:

A critical point for non-residents is that regional bonifications only apply to tax residents of that community. If you are a non-resident and your property is in Madrid, the state-level rates will generally apply unless the regional regulations offer a more favourable position. In practice, for most non-residents owning property in a 100%-relief region, the state rules are what matters — meaning wealth tax is still payable if your net assets exceed €700,000.

What is the Solidarity Tax on large fortunes and how does it affect non-residents?

The Solidarity Tax (Impuesto Temporal de Solidaridad de las Grandes Fortunas) is an additional national tax for individuals whose net assets exceed €3,000,000. It was introduced by Ley 38/2022 and has now been made permanent.

Created by Ley 38/2022, de 27 de diciembre, this tax was originally a temporary measure for 2022 and 2023. The Spanish government has since extended it indefinitely. It applies to both residents and non-residents. For non-residents, only Spanish-held assets are considered, and the same €700,000 minimum exemption applies.

The Solidarity Tax is complementary to the regular wealth tax. The amount already paid in regional wealth tax is deducted from the Solidarity Tax liability, avoiding double taxation. The rates are:

In practice, the Solidarity Tax primarily affects individuals with significant portfolios, particularly those in regions where wealth tax is fully bonified. The Solidarity Tax ensures a minimum contribution from high-net-worth individuals regardless of regional relief. It is filed using Modelo 718.

How is your property valued for wealth tax purposes?

Your property must be declared at the highest value among three figures: the cadastral value, the value verified by the tax authorities, or the acquisition price. Debts such as mortgages are deductible.

Article 10 of Ley 19/1991 (as amended by Ley 11/2021) establishes that real estate must be valued at the greater of three values: the valor catastral, the value determined by the tax administration (which since 2022 includes the new valor de referencia del Catastro), or the purchase price. In most cases for recent purchases, the acquisition price will be the highest.

Under Article 9.4, non-residents may only deduct debts relating to assets in Spanish territory. A mortgage against the property can be subtracted from the gross value, reducing the taxable base. For example, a property purchased for €1,200,000 with an outstanding mortgage of €400,000 would have a net value of €800,000.

Wealth tax is an individual tax, it cannot be filed jointly with a spouse. Under Article 7 of Ley 19/1991, each co-owner declares their proportional share. If a couple jointly owns a property worth €1,400,000 on a 50/50 basis, each declares €700,000, which falls within the allowance. You will need your NIE number to file any tax declaration in Spain.

Can you legally reduce your wealth tax liability in Spain?

There are several legal strategies available to reduce your wealth tax exposure, from structuring ownership correctly to benefiting from recent court rulings.

One of the most significant developments is the extension of the 60% tax shield to non-residents. Article 31 of Ley 19/1991 establishes that the combined amount of wealth tax and personal income tax cannot exceed 60% of a taxpayer’s income tax base. In its judgments of 29 October and 3 November 2025, the Spanish Supreme Court ruled that restricting this protection to residents violates EU free movement of capital principles. Non-residents can now claim a reduction of up to 80% of their wealth tax bill.

Other practical strategies include:

• Joint ownership: splitting property between two owners doubles the effective tax-free threshold to €1,400,000, as each co-owner benefits from the individual €700,000 allowance.
• Mortgage financing: outstanding mortgage debt on your Spanish property is deductible from the gross value, directly lowering the taxable base.
• Double taxation treaties: Spain has bilateral agreements with many countries. The interaction between Spanish tax and your home country’s obligations should be reviewed to avoid paying more than necessary.
• Professional fiscal planning: an independent tax adviser can assess whether applying regional regulations would offer a more favourable outcome depending on your property’s location.

The Constitutional Court admitted an appeal regarding the constitutionality of the wealth tax in April 2021. A decision is expected in 2026, though its practical effects may be limited to taxpayers who have already challenged their assessments.

Key takeaways

Spain’s wealth tax system is complex, with rules that differ between residents and non-residents, between autonomous communities, and between the regular wealth tax and the Solidarity Tax. For non-residents who own property valued above €700,000, the tax is a real annual obligation that requires careful planning. Wealth tax sits alongside other obligations such as IBI council tax, non-resident income tax, and potentially capital gains tax if you sell.

The most important things to remember are that the €700,000 exemption applies per person, that property is valued at the highest of three possible figures, and that recent Supreme Court rulings have opened the door for non-residents to benefit from the 60% tax shield. Getting professional advice from an independent legal and fiscal adviser is the best way to ensure compliance. It is also worth considering your Spanish will and estate planning alongside your tax position, as wealth tax and inheritance tax are closely related.

If you have questions about how wealth tax applies to your situation, Ábaco Advisers can help. Fill out our contact form for a free initial consultation in the language of your choice.

Frequently asked questions

Do I need to file a wealth tax return if my Spanish property is worth less than €700,000?

Generally, no. If your net Spanish assets fall below €700,000 and no tax is due, you are not required to file Modelo 714. However, if the gross value of all your Spanish assets exceeds €2,000,000, you must still file even if no tax is payable after exemptions.

Is the €700,000 exemption per person or per property?

The exemption is per person, not per property. Each individual taxpayer benefits from one €700,000 allowance applied to the total net value of their Spanish assets. If two people jointly own a property, each can claim the full €700,000 against their respective share.

Can I avoid wealth tax by holding my property through a company?

Not necessarily. Since the amendments introduced by Ley 38/2022, shareholdings in companies where at least 50% of assets consist of Spanish real estate are subject to wealth tax. This measure was designed to prevent avoidance through corporate structures.

When is the filing deadline for wealth tax in Spain?

The filing period for Modelo 714 usually runs from early April to 30 June of the year following the tax year. For the 2025 tax year, the return would be filed between April and June 2026. Late filing triggers surcharges from 5% to 20%, plus interest.

Has the Spanish Supreme Court changed anything for non-residents regarding wealth tax?

Yes. In October 2025, the Supreme Court ruled that non-residents must also be able to apply the 60% tax shield under Article 31 of Ley 19/1991. This ruling aligns with EU free movement principles and could result in significant savings for non-residents with high-value Spanish assets but relatively low income.