The Spanish wealth tax, known in Spain as ‘patrimonio’ (Impuesto sobre el Patrimonio) has been abolished by Spain’s socialist government, fulfilling an electoral promise made 4 years ago before the Socialists (PSOE) took power.
The Spanish Wealth Tax (Patrimonio) was abolished as of 01/01/2008, so the change does not affect tax declarations for the tax year 2007 (for which tax returns are currently being submitted – deadline end of June).
For most non-resident property owners the tax bill for the wealth tax was never very big. For example, for a property in Catalonia valued at 300,000 Euros with no mortgage the wealth tax was approximately 730 Euros per annum, but for most owners it would have been significantly less than that (lower property value, mortgage, etc.). Its elimination will nevertheless be welcome at a time when municipal taxes, mortgage rates, and other overheads for property owners are on the rise.
The Spanish wealth tax was introduced 30 years ago as a temporary tax, but like all ‘temporary’ taxes, it long outstayed its welcome. It requires everyone (residents and non-residents alike) who owns property or other taxable assets in Spain to pay an annual wealth tax based on the net value of those assets after permitted deductions, such as mortgages. This tax is collected by regional governments, so the national government will have to find some way to compensate them for lost revenues.
The elimination of Spain’s wealth tax was announced in April as part of a raft of measures designed to stimulate an economy struggling with a real estate sector downturn.
All non-resident property owners who have been paying the wealth tax to date will also have an appointed fiscal representative in Spain, as required by law. To avoid any risk of overpaying a fiscal representative during tax declarations for 2008 (which take place in May-June 2009), non-resident owners should contact their fiscal representative now to ensure that the correct services and fees are in place for 2009.
The Wealth Tax (Patrimonio) was reintroduced ‘temporarily’ in 2011 and is still going strong in 2023. Furthermore, the Spanish government introduced another ‘temporary’ tax on wealth at the end of 2022, called a “Temporary Solidarity Tax on Large Fortunes” or Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF) in Spanish, that is particularly hard on non-resident investors.
Thoughts on “Spanish Wealth Tax (Patrimonio) eliminated for now”
sally england says:
Can you advise where you found this information, as I work for a fiscal representative and we cannot see anything on the spanish tax website.
On Friday 18 April Spain’s Council of Ministers formally approved the abolition of wealth tax in Spain. The measure applies with retrospective effect from 1st January 2008. It was subsequently published in the BOE. There is plenty of information avaible online – just ask Google.
According to Hacienda the new legislation will be published in the BOP later this year.
Mark it is only necessary to have a Fiscal Rep in Spain if you have more than one property. Most people now do their own returns to Hacienda as it is a very easy process.
Following receipt of your newsletter re wealth tax I contacted my fiscal representative and she said it has not been abolished. It is being considered at the current time by Spanish tax authorities. Could you tell me where you got this information from? thanks Judy
It was announced at the first cabinet meeting of the new government on 18th April last. See here under the heading Hacienda Pone fin al Impuesto de Patrimonio desde este año. http://www.cincodias.com/articulo/economia/Solbes/preve/PIB/avance/decimas/plan/choque/cdscdi/20080419cdscdieco_1/Tes/
According to Hacienda it has to be published in the BOE (Boletin Oficial del Estado) first before it comes into law and this should happen towards the Autumn of this year.
Hi, thanks for your excellent information.
As a new, non resident property owner in Spain, I paid this tax for the first time in January this year. My Fiscal Rep took some time to organize the payment and finally took the money from my bank in January 2008.
If the tax has now been eliminated, can you please tell me if I shall have to pay further money later this year, maybe in respect of the end of 2007 year and if so will it be pro rata?
You have to declare and pay for 2007 now, during June (I believe it is pro rata, but your tax advisor will have to confirm that).
I don’t know what you paid in January. This tax is paid in June for the previous year. As it is being eliminated, this is the last time it needs to be paid.
Mark, Thank you very much for your help.
I have paid my wealth tax through a spanish solicitor,
can I do it my self if so how.
Having read all this I am confused! I bought a property in spain in December 07 and my spainish lawer has just sent a letter to me saying I have to pay 331E wealth tax they say they have tried to contact me several times funny I never got an email even though they have my email address they say they need the money by december 22 08 its the 19th now what should I do? I am a none resident of spain and the property is worth less than 155000E
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