Wealth tax in Spain for expats is one of the biggest surprises for British arrivals, because the UK has no equivalent. Once you are Spanish tax resident, Spain can tax the net value of your worldwide assets held on 31 December each year, including UK investments, cash, property and, in some cases, UK pensions. Whether you pay depends on the region you live in, your allowances, asset values, debts and exemptions, and a separate national solidarity tax on the largest fortunes, and the answer can range from nothing to a recurring annual liability. Non-residents who own Spanish property can also be caught on their Spanish assets. This guide explains who pays, how assets are valued, the regional differences, the solidarity tax, the 60% cap on combined income and wealth tax, and the points to check before and after a move. It is general information, not personal tax advice. Figures are for the 2025 tax year (assets held on 31 December 2025, returns filed in 2026) under the state rules and the regional rules stated; the 2026 rules, regional allowances and the continuation of the solidarity tax must be rechecked before you rely on them.
Spain's wealth tax (Impuesto sobre el Patrimonio) is governed by Ley 19/1991, and much of it is set by the autonomous communities. It is charged on the net value of the assets and rights you hold on 31 December each year, less deductible debts. Individuals who are Spanish tax resident under the income tax (IRPF) rules are taxed under personal obligation on their worldwide assets, wherever they are held. Non-residents are taxed under real obligation only on assets located in Spain, such as Spanish property, Spanish bank accounts and Spanish securities, and shares in unlisted companies are treated as Spanish assets where at least 50% of the company's assets consist, directly or indirectly, of Spanish real estate. People taxed under the Beckham regime for inbound workers (article 93 of the income tax law) are also taxed under real obligation, so only their Spanish assets are counted. The tax is individual: each spouse or partner is assessed on the assets attributed to them, under the rules of their matrimonial property regime, and each has their own allowances. Our guide to tax in Spain for expats explains how Spanish tax residence is decided.
Under the state rules, the taxable base is reduced by a 700,000 euro allowance (the minimo exento), unless your region has set a different figure for its residents. Your main home (vivienda habitual) is exempt up to 300,000 euros of value, which in practice only helps residents, because the home must be your habitual residence. Under article 4.Ocho of Ley 19/1991, some business assets and qualifying shareholdings in family trading companies are exempt where strict conditions are met, broadly a holding of at least 5% individually or 20% with close family, an entity that is not mainly managing a portfolio of investments or property, and management functions providing more than half of your earned income, with further conditions applying. Where your region has not approved its own scale, the state scale applies, rising across eight bands from 0.2% on the first 167,129.45 euros of taxable wealth to 3.5% above 10,695,996.06 euros. Many regions use their own scales, so the rate you pay depends on where you live. You must file a return if, after deductions and bonuses, there is tax to pay, or, even when no tax is payable, if the gross value of your assets and rights exceeds 2,000,000 euros, counting exempt assets and before deducting debts. For the 2025 tax year, the filing period ran from 8 April to 30 June 2026, or to 25 June 2026 where tax was paid by direct debit.
The tax is a snapshot of your position on 31 December, and the valuation rules are specific. Property is generally taken at the highest of its cadastral value, a value determined or checked by the tax authority for other taxes, and its purchase price or acquisition value. Bank deposits are taken at the higher of the balance on 31 December and the average balance for the last quarter of the year, with adjustments for funds withdrawn to buy other assets or repay debts. Shares listed on organised markets are valued at their average trading value for the fourth quarter, and investment funds at their published liquidation value on 31 December. Life insurance policies are generally counted at their surrender value on 31 December, so they are not outside the tax. Debts can be deducted only where they are properly evidenced, and for non-residents only where they relate to the Spanish assets being taxed. UK pensions need particular care: the exemption in article 4 for pension rights is written for Spanish and certain European arrangements, and the Spanish tax authority's 2025 wealth tax manual states that plans established outside the European Union cannot benefit from it. That means a UK pension may need to be declared and valued, and how a particular UK arrangement is treated is a question for a Spanish tax specialist. Our guide to drawing your UK pension while living abroad covers the income tax side.
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Because the autonomous communities can set the allowance, the scale and bonuses, two people with identical assets can face very different bills depending on where they live. For the 2025 tax year, the Spanish tax authority's manual shows a general allowance of 500,000 euros in Catalonia and 1,000,000 euros in the Valencian Community, where the figure was doubled from 500,000 euros with effect for wealth held on 31 December 2025 under Ley 5/2025. Madrid and Andalusia have general bonuses of 100% of the tax (article 20 of Madrid's Decreto Legislativo 1/2010 and article 25 bis of Andalusia's Ley 5/2021), but the regional pages of the Spanish tax authority's 2025 wealth tax manual show that, while the national solidarity tax described below remains in force, both general bonuses are replaced by a transitional bonus equal to the difference, if any, between the wealth tax and the solidarity tax that would be due. In practice, residents below the solidarity tax threshold still pay no wealth tax there, while larger estates pay regional wealth tax instead of the solidarity tax and can still face a liability. The Spanish tax authority's 2025 manual shows the Region of Murcia and La Rioja applying similar transitional bonuses. Regional rules change frequently, often in annual budget laws, so the rules for the year you are planning for, in the region you will actually live in, should always be checked. Moving region within Spain has its own residence rules, including an anti-avoidance rule, in article 72 of the income tax law (Ley 35/2006), under which a change of residence whose main purpose is to obtain lower taxation has no effect for tax purposes, backed by a presumption that applies in specific circumstances.
The Impuesto Temporal de Solidaridad de las Grandes Fortunas was introduced by article 3 of Ley 38/2022, first applying to wealth held on 31 December 2022. It was described as temporary, but Real Decreto-ley 8/2023 extended it for as long as the review of wealth taxation within the reform of regional financing has not taken place, so it applied again for 2025 and remains in force until that review of wealth taxation within the regional financing reform takes place. It follows the wealth tax rules on who pays, exemptions and valuation, including the 700,000 euro allowance and the 300,000 euro main home exemption, but it is a state tax that regional bonuses cannot remove. After the 700,000 euro allowance, the first 3,000,000 euros of the taxable base is charged at 0%, so tax generally starts only where net wealth, after exemptions, exceeds about 3,700,000 euros. Above that the rate is 1.7% up to 5,347,998.03 euros, 2.1% up to 10,695,996.06 euros and 3.5% above that. Any regional wealth tax actually paid for the same year is deducted, so in high-tax regions there may be little or nothing extra to pay, while in regions with generous bonuses the solidarity tax can become the main charge. Because it follows the wealth tax rules on who pays, residents are taxed on worldwide assets and non-residents and Beckham regime taxpayers on Spanish assets. The return (Modelo 718) is filed separately; for 2025 the filing period opened on 1 July 2026, after the wealth tax filing period.
For residents, the combined income tax and wealth tax cannot exceed 60% of the income tax base. For this test, gains in the savings base from assets held for more than a year are left out of the income figure, and the part of the wealth tax relating to assets that produce no income taxable under IRPF is not reduced. Where the cap is exceeded, the wealth tax is reduced, but the reduction cannot be more than 80%, so at least 20% of the wealth tax remains payable. The solidarity tax has an equivalent cap that also counts the solidarity tax itself. The statute still refers to taxpayers under personal obligation, but in rulings STS 1372/2025 of 29 October 2025 and STS 1402/2025 of 3 November 2025 the Spanish Supreme Court held that excluding non-residents from the cap is discriminatory. Orden HAC/277/2026 then removed the restriction to residents from the cap section of the 2025 wealth tax form (Modelo 714), and Orden HAC/652/2026 updated the solidarity tax form (Modelo 718), citing in its preamble two resolutions of the central economic administrative tribunal (TEAC), RG 4119/2025 and RG 5527/2025 of 18 December 2025, applying the solidarity tax cap to both residents and non-residents. The cap tends to matter most where assets are large but taxable income is low, for example where investments produce little income, so it is worth checking how your income and assets interact rather than assuming the scale rates tell the whole story.
Because the tax is assessed on 31 December, the first year of Spanish residence can bring your worldwide assets into charge even if you arrive late in the year, provided you are Spanish resident for that year under the IRPF rules. When you leave, a person who ceases to be resident can in some cases opt to remain taxed under personal obligation, which is relevant only in limited circumstances. Wealth tax sits alongside other Spanish reporting and taxes rather than replacing them: Spanish residents may also have to file the separate foreign asset declaration (Modelo 720) where thresholds are met, and pay income tax on worldwide income and gains, as our guide to capital gains tax in Spain explains. The UK has no general annual wealth tax, so there is no UK tax to credit against the Spanish charge, and UK assets you keep are not exempt in Spain merely because they are held in the UK; they can also still have UK income tax, capital gains tax or inheritance tax consequences. Where you might later return to the UK, the UK rules on temporary non-residence, and the UK inheritance tax rules, which since 6 April 2025 depend largely on long-term UK residence under the rules set out in HMRC guidance on GOV.UK, are separate questions; our guide to estate planning for Brits in Spain and Portugal covers the inheritance side. Any action, including no action, should follow a suitability assessment and appropriate tax and legal advice, and should be judged on overall tax, cost and risk, not on wealth tax alone.
Wealth tax is an area many British arrivals have not come across before, because the UK has no general annual wealth tax. The first questions are always which region you will live in and how your UK assets, including pensions, would be valued on 31 December. Those answers can change the picture completely, and whether any tax is payable depends on the region, asset values, allowances, pensions and the solidarity tax, so it makes sense to understand them before the residency date.
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Spain can tax the value of what you own, not just what you earn. Residents are assessed on worldwide net wealth on 31 December each year, and many arrivals from the UK only discover this after their first year of residence.
The allowance, scale and bonuses depend on your autonomous community. The same assets can produce no tax in one region and a significant bill in another, and regional rules change often, so check the rules for the specific year and region.
Madrid and Andalusia have 100% bonuses, but the national solidarity tax can still apply to the largest fortunes, generally where net wealth exceeds about 3.7 million euros after the allowance, and while it remains in force both regions replace their general bonus with a transitional one, so those affected pay regional wealth tax instead.
The Spanish exemption for pension rights is framed around Spanish and certain European arrangements, and the tax authority's manual states that plans set up outside the EU cannot use it. A UK pension may need to be declared and valued, so take specialist advice on your own arrangement.
A return is required where your gross assets and rights exceed 2,000,000 euros, even if bonuses or allowances mean nothing is payable. Exempt assets count towards the 2,000,000 euro test, and debts are not deducted.
If you own Spanish property but live elsewhere, Spain can tax your Spanish assets under real obligation, and the main home exemption does not help because the property is not your habitual residence. Under the fourth additional provision of Ley 19/1991, non-residents can apply the regional rules of the autonomous community where the greatest value of their Spanish assets is located.
Because Spanish wealth tax is assessed on each person separately, how assets are owned between a couple matters, and so does how that ownership fits with their wills and inheritance plans in both countries. Any action, including no action, should follow a suitability assessment and proper tax and legal advice, looking at the whole picture, including inheritance and income tax.
Illustrative example only, not a real client. It does not describe advice given to any client, is not financial advice, tax advice or a personal recommendation, and does not imply that advice, a review or any particular ownership structure is suitable for any reader. This example is simplified and fictional, applies the 2025 Valencian Community allowance and state rules purely as stated assumptions (2026 and later rules may differ), ignores currency movements and valuation detail, and is not a guarantee of any outcome. Mark and Sarah plan to become Spanish tax resident and buy a home in Alicante for 600,000 euros, owned 50:50. Between them they also hold UK investments and cash worth the equivalent of 2,400,000 euros, split equally, and UK defined contribution pensions worth about 900,000 euros, split equally. They had assumed that, like the UK, Spain only taxed income and gains.
A review with a regulated financial adviser, working alongside a Spanish tax specialist, first explained that wealth tax is assessed on each of them separately. On these assumptions, each owns 300,000 euros of the home, within the main home exemption, plus 1,200,000 euros of investments and cash. Before the pensions, each would have taxable wealth of about 200,000 euros after the 1,000,000 euro Valencian allowance. If the UK pensions had to be counted, each person's taxable wealth could rise to about 650,000 euros, and, if the pensions are included in gross assets, each person's gross assets would be about 1,950,000 euros, just below the 2,000,000 euro figure that triggers a filing obligation only when it is exceeded. The review explained how the Valencian Community's own rate scale and the 60% cap could apply to those figures, flagged that the treatment of their UK pensions needed confirming by the Spanish tax specialist, and noted that the solidarity tax would not apply at their level of wealth on these figures. It also looked at how wealth tax fitted alongside their Spanish income tax and inheritance position.
Illustrative figures only: this does not assess suitability or recommend any course of action, and no tax outcome, liability or saving is guaranteed. Mark and Sarah understood that their region, the valuation of their UK pensions and the way their assets were split between them would drive any wealth tax, and that whether any changes to how their savings and investments were held would be appropriate was a separate question, needing its own suitability assessment and tax advice. They made their decisions knowing the position before the move; any action, including no action, should follow a suitability assessment and tax advice. Different facts, rules or timing could produce a different or worse result.
Illustrative example, not a real client.
Clarity Global Wealth helps people moving to Spain, or already living there, understand the questions to discuss about wealth tax and the solidarity tax before they act, including how your assets would be valued on 31 December, how your region's allowance and bonuses apply, whether UK pensions and other UK holdings need to be declared, whether the 60% cap may be relevant, and how wealth tax fits alongside income tax, capital gains tax and inheritance planning. We can arrange a free introduction to regulated financial planning, which places you under no obligation to proceed with advice or any product, so you can review your position with a regulated financial adviser before making changes to savings or investments, where advice is appropriate. Any charges for advice would be explained to you before you proceed. The value of investments can fall as well as rise, tax treatment depends on individual circumstances and can change, and advice may conclude that no changes are suitable. Clarity Global Wealth does not provide tax, legal or accounting advice, and adviser comments in this guide are general information, not personal recommendations. Calculating and filing Spanish returns is tax-compliance work for a qualified Spanish tax adviser, so where that is needed we coordinate with qualified tax specialists.
Related guides: Tax in Spain for Expats in 2026, Capital Gains Tax in Spain for Expats, Expat Estate Planning for Brits in Spain and Portugal, Moving From the UK: The Statutory Residence Test, Drawing Your UK Pension While Living Abroad, Investing a Lump Sum as a British Expat and Returning to the UK After Years Abroad.
This guide is provided for general information only and reflects our understanding of the rules as at the date of publication. It is not personal financial, investment, pension or tax advice, and should not be relied upon as such. Rules and tax treatment can change and depend on your individual circumstances and country of residence. You should always seek regulated advice specific to your situation before taking action.
If you are Spanish tax resident, Spain can tax your worldwide net wealth held on 31 December, subject to allowances and your region's rules. Non-residents can be taxed on assets located in Spain, such as Spanish property.
The latest confirmed position is for the 2025 tax year: under the state rules the allowance was 700,000 euros per person, plus up to 300,000 euros for a resident's main home, and regions can set their own figure, for example 500,000 euros in Catalonia and 1,000,000 euros in the Valencian Community. The 2026 state and regional position must be checked for the region that applies to you.
Madrid and Andalusia have 100% bonuses, so residents below the solidarity tax threshold generally pay no wealth tax there. However, while the national solidarity tax remains in force, both regions replace the general bonus with a transitional bonus equal to the difference, if any, between wealth tax and solidarity tax, so larger estates pay regional wealth tax instead and can still face a liability.
It is a national tax that follows the wealth tax rules, with the same 700,000 euro allowance. The first 3 million euros of the taxable base is charged at 0%, so tax generally starts only where net wealth after exemptions exceeds about 3.7 million euros, with rates of 1.7%, 2.1% and 3.5% across the bands and a deduction for regional wealth tax paid. It was introduced for 2022 and 2023 and has been extended until the planned review of wealth taxation. For 2025 the return could be filed from 1 July 2026.
They can be. The Spanish exemption for pension rights is framed around Spanish and certain European arrangements, and the Spanish tax authority's manual states that plans established outside the EU cannot use it. How a particular UK pension is treated and valued should be confirmed with a Spanish tax specialist.
You must file if the gross value of your assets and rights exceeds 2,000,000 euros, even where allowances or bonuses mean no tax is payable. Exempt assets count towards that figure and debts are not deducted.
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