Wealth tax for non-residents who own Spanish property

Who is taxed, and on what

Article 5 of Ley 19/1991 splits taxpayers in two. Residents are taxed on their whole net wealth wherever it is (obligación personal). Any other individual is taxed under obligación real, for “the goods and rights of which they are holders when they are located, can be exercised or must be fulfilled in Spanish territory”. For a typical foreign owner that means the Spanish home, Spanish bank balances and other Spanish assets. Shares in unlisted entities whose assets consist at least 50% of Spanish real estate are treated as located in Spain, and the tax is then charged on those shares.

The tax accrues on 31 December each year and covers the assets held on that date (article 29). Real estate is valued at the highest of three values: the cadastral value, the value determined or checked by the administration for other taxes, or the price paid (article 10). The Basque Country and Navarre have their own foral regimes (article 2).

The allowance and the rates

Article 28 sets the exempt minimum: the amount approved by the region, or if the region has not set one, €700,000. Paragraph 3 extends the state allowance to non-residents under obligación real. Rates follow the scale of article 30: the region’s own if it has one, otherwise the state scale. The state scale runs from 0.2% on the first €167,129.45 to 3.5% above €10,695,996.06; non-residents under obligación real use that scale (article 30.3).

A calculation, not a forecast: a non-resident whose only Spanish asset is a home valued at €900,000 for this purpose, with no regional rule, has a taxable base of €900,000 − €700,000 = €200,000. On the state scale the first €167,129.45 carries a tax of €334.26 and the remaining €32,870.55 is taxed at 0.3%, which is about €98.61, so roughly €432.87. A home valued at €650,000 would give a base of zero.

The regional option

Additional provision 4 gives non-residents the right to apply “the rules approved by the autonomous community where the greatest value of the goods and rights lies” on which the tax is charged. The provision speaks of non-residents in general, with no EU or EEA condition. Regions may set their own allowance and scale (articles 28 and 30); the figures are in each community’s tax legislation and were not read for this guide. Compare them with the non-resident tax calculator as a starting point and confirm on the regional tax agency’s site.

Do I have to file?

Under article 37, filing is required when the tax resulting is payable, or when the value of assets exceeds €2,000,000, even if no tax is due. If your Spanish assets are below the €700,000 allowance and well under €2,000,000, neither condition is met. Filing deadlines and forms are set by ministerial order, not in the law; check the Tax Agency’s site for the current form. Non-residents’ wealth tax is also covered by the treaties: article 21 of the UK convention and article XXII of the Canada convention allow Spain to tax real estate located there.

The tax representative

Article 6 requires non-resident taxpayers to appoint a Spanish-resident representative when they operate through a permanent establishment, or when the tax authority requires it given the amount and nature of the assets in Spain. Failure is a serious infringement with a fixed fine of €1,000. The depositary or manager of a non-resident’s assets is jointly liable for the tax on those assets (article 6.Tres). In ordinary cases, then, the obligation arises on request.

The temporary solidarity tax on large fortunes

Ley 38/2022 created the Impuesto Temporal de Solidaridad de las Grandes Fortunas. It taxes net wealth of more than €3,000,000 (article 3.Uno), applies to the same taxpayers as the wealth tax, so non-residents for their Spanish assets (3.Cinco), and gives an exempt minimum of €700,000 (3.Nueve). The scale is 0% up to €3,000,000, then 1.7% up to €5,347,998.03, 2.1% up to €10,695,996.06 and 3.5% above (3.Once). The wealth tax actually paid can be deducted (3.Quince). The tax is not ceded to the regions (3.Dos).

The law describes the tax as applying to the first two years, but a note on the consolidated text states that its application is extended “while the review of wealth taxation is not carried out” in the context of regional financing reform.

Representative. Article 3.Seis makes it compulsory for taxpayers “who are not resident in another Member State of the European Union” to appoint, before the end of the filing period, a natural or legal person resident in Spain to represent them. This duty arises without any request. An EEA state that is not an EU member is exempt where mutual-assistance rules on tax information and collection exist. The appointment and the representative’s acceptance are communicated to the competent tax office. So a UK, Canadian or US resident above the threshold must have a representative.

Filing is required only if the resulting tax is payable (3.Diecinueve).

Which professional to consult

A tax adviser or a gestor administrativo can value the assets under article 10 and file or act as the representative. Payotte does not recommend names; see property lawyers.