The wealth tax returns to Spain but you probably won't have to pay it
A wealth tax is a tax on total assets rather than income. Spain had wealth tax (Patrimonio) up until 2008, at which point it was effectively suspended. The government brought it back in 2011, but with different rules. (It was brought back as a temporary measure for the 2011 to 2012 tax years, but this has now been extended to include 2013 as well).
This guide describes how the "new version" of this tax works, focusing firstly on the allowances, which result in all but the very wealthy having no tax liaibility.
Spanish wealth tax allowances
The first â‚¬700.000 of every each individualÂ´s assets are exempt from tax
For Spanish residents, â‚¬300.000 can be deducted from the valuation of the family home before it is added to the total asset calculation
These two limits were, respectively, â‚¬108.182 and â‚¬150.253 the last time Spain had wealth tax, so far fewer people are be faced with a tax liability this time. Â It is estimated that only 160,000 people will pay a total of â‚¬1 billion tax.
Operation of the tax
The wealth of an individual is deemed to be their property, vehicles, jewelry, furs, antiques, intellectual property rights, savings and other financial assets. Their total valuation on the last day of the year is subject to the tax.
Property is to be valued at the higher of the "catastral valor" (official value on the property register) and the value in the deeds. For older properties in particular these are both values which could easily be substantially below market levels. This reduces still further the chances of you having to pay the tax.
Taxation of husband and wife
Each person is assessed separately. Jointly owned properties (and other assets) are split between the two, so usually only 50% of a house's value is carried forward to the asset total. In terms of the family home, the allowance is divided between the husband and wife, so it is â‚¬150.000 each.
Spanish wealth tax rates
After the taxpayer's wealth has been calculated (total assets minus family home exemption minus 700.000 allowance), the following rates are applied:
Note on regional differences: This tax has been highly politically controversial with the right of centre PP opposing it. The tax is collected by the governments of the autonomous regions who have the right to change the rules locally. Some PP regions have apparently done so to make it more lenient, for example those in Murcia and Valencia. For details look at their government websites.
See also: Â The wealth tax returns
For other articles about Spanish tax go to the Advice page and use the dropdown box to select a category