Wealth tax in Spain for non-residents: what you pay and how your mortgage counts
Buying a house in Spain feels like freedom, until someone mentions the word wealth tax. Then doubt sets in: will I soon be paying a substantial amount every year on my Spanish property? For most buyers, it is not that bad. You only pay above a generous exemption, and the way you finance the purchase partly determines what you ultimately end up paying.
In this article, you will read how Spanish wealth tax works if you do not live in Spain, from what amount you pay, what the regional differences are, and why your mortgage plays a bigger role in this than you think.
Table of contents
- What is the Spanish wealth tax?
- From what asset level do you pay?
- De tarieven: van 0,2% tot 3,5%
- Large regional differences
- How your mortgage lowers the tax assessment
- Buying via a BV or privately?
- Solidarity levy for large fortunes
- And in the Netherlands and Belgium?
- Frequently Asked Questions
What is the Spanish wealth tax?
Wealth tax (in Spanish, impuesto sobre el patrimonio) is an annual tax on your net assets. If you do not live in Spain, only your Spanish assets are included: the home itself, a Spanish bank account, and any Spanish investments. Your Dutch or Belgian assets are excluded.
The reference date is December 31. The tax authorities look at your situation on that single day: what is the value of your Spanish assets and what debts are linked to them? If you buy in January and sell in November, nothing is owed for that year, because on December 31 you no longer owned anything.
From what asset level do you pay?
Here is the good news. Every owner has an exemption of 700,000 euros. You only pay tax on the portion of your Spanish net assets above that amount. If you buy together with your partner, the exemption applies per person: so 1.4 million euros together.
An example. If you and your partner buy a property together for €900,000, each of you has a share of €450,000. That remains well below the exemption, so you pay no wealth tax. Please note: a filing obligation may arise if your Spanish assets exceed €2 million, even if you do not have to pay anything due to the exemption.
De tarieven: van 0,2% tot 3,5%
If you exceed the exemption, the rate increases in steps. This is the national scale, whereby regions may apply their own rates:
- up to 167,129 euros: 0.2%
- 167,129 to 334,253 euros: 0.3%
- 334,253 to 668,500 euros: 0.5%
- 668,500 to 1,337,000 euros: 0.9%
- 1,337,000 to 2,674,000 euros: 1.3%
- 2,674,000 to 5,348,000 euros: 1.7%
- 5,348,000 to 10,696,000 euros: 2.1%
- above 10,696,000 euros: 3.5%
The percentages are low at the lower end. With a Spanish net worth of 900,000 euros, you pay nothing on the first 700,000 euros and the lowest rate on the remaining 200,000 euros. In practice, this amounts to a few hundred euros per year, not the sums people are sometimes afraid of.
Large regional differences
Spain is divided into autonomous regions, which are allowed to set their own exemptions and discounts. This leads to significant differences. In Madrid and Andalusia, a 100 percent discount applies: in practice, you pay no standard wealth tax there, regardless of value. In regions such as Cataleroroe and the Balearic Islands, on the other hand, lower exemptions or higher rates apply.
As a non-resident, you may choose which rules apply: the national rules or those of the region where your most valuable Spanish property is located. Where you buy therefore has a direct impact on your tax assessment. If you want to invest in Spain, take this into account during your research; we delve deeper into this on our page about investing in real estate in Spain.
How your mortgage lowers the tax assessment
This is the point that is overlooked in most articles. Wealth tax is based on your net worth, meaning your assets minus your debts. A mortgage on your Spanish property is such a debt and therefore reduces the tax base on which you are taxed.
A calculation example makes it concrete. Suppose you buy a property for €1,000,000 on your own. Without financing, you have Spanish assets of €1,000,000, of which €300,000 exceeds the exemption. If you finance €400,000 and €400,000 of that remains outstanding on December 31, your net assets are €600,000. That remains below the exemption of €700,000, so you pay no wealth tax.
Financing is therefore not only a way to make the purchase possible, but also an instrument that influences your tax position. Because the outstanding debt counts, it can be attractive not to pay off too quickly. However, weigh this against the interest costs and your personal preferences; it is a trade-off, not an automatic gain. Do you want to see what is possible in your case? Calculate your options with the mortgage check, or first read the rules and conditions for a mortgage in Spain.
Buying via a BV or privately?
It was previously thought that one could avoid Spanish wealth tax by purchasing a property through a Dutch BV rather than privately. Since a legislative amendment in late 2022, this no longer works automatically. If you hold shares in a company where at least half of the assets consist of Spanish real estate, that value is still subject to Spanish wealth tax for non-residents.
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A corporate structure can be beneficial for other reasons, such as liability, financing from your company, or family succession. However, do not count on wealth tax alone. For entrepreneurs and director-major shareholders, this requires a tailored approach. Have your situation analyzed before choosing a structure; you can read how we handle this on our private banking page.
Solidarity levy for large fortunes
In addition to the standard wealth tax, Spain has had a separate levy on large fortunes since 2022 (the impuesto de solidaridad de las grandes fortunas). This applies from a net worth of 3 million euros and is now permanent. The exemption of 700,000 euros also applies here.
Important: this levy is imposed nationwide, including in regions such as Madrid and Andalusia, where the standard wealth tax is zero. Large fortunes therefore cannot escape it there. Any amount you have already paid in standard wealth tax is offset so that you do not pay tax twice on the same assets. The rates range from 1.7% to 3.5%.
And in the Netherlands and Belgium?
If you live in the Netherlands, your second home in Spain falls under Box 3. This raises the question of whether you are paying double taxation: in Spain and in the Netherlands. That is not the case. The tax treaty between the Netherlands and Spain assigns the right to tax the property to Spain, and the Netherlands grants relief from double taxation via the proportional exemption. Therefore, you do declare the property in Box 3, but you receive a reduction so that you are not taxed in full on it twice.
If you live in Belgium, there is no general wealth tax, so for Belgian buyers, only the Spanish aspect is relevant. In both cases, it is advisable to have your personal situation assessed, as the precise outcome depends on your total assets and the way your holdings are structured.
Frequently Asked Questions
Do non-residents pay wealth tax in Spain?
Yes, but only on your Spanish assets and only above the exemption of 700,000 euros net per person. Below that amount, you pay nothing.
How much is the exemption exactly?
700,000 euros per person, so together with a partner 1.4 million euros. With Spanish assets exceeding 2 million euros, a reporting obligation may already apply, even if you do not have to pay anything.
Does my Spanish mortgage count?
Yes. The tax is based on your net assets, so the outstanding mortgage on the Spanish property reduces the tax base.
Does the tax also apply in Madrid and Andalusia?
The standard wealth tax is zero there. Large fortunes of 3 million euros or more do pay tax via the national solidarity levy.
Do I have to file a tax return if I stay below the exemption limit?
Usually not for the levy itself, but for Spanish assets exceeding 2 million euros, there is indeed an obligation to file a return. Have your situation checked.
Do I then also pay tax on the property in the Netherlands?
The property falls under Box 3, but the tax treaty prevents you from paying double tax on it in the Netherlands and Spain.
