Wealth Tax (Modelo 714)

The wealth tax, or “impuesto de patrimonio,” is a direct tax on personal assets applicable to fiscal residents in Spain. Declarations must be filed by June 30th, with thorough documentation needed.

Introduction

The wealth tax, or “impuesto de patrimonio,” is a direct levy on personal assets. While common in Spain, it can be unfamiliar to foreigners and presents unique challenges due to regional variations. Taxable assets include real estate, investments, vehicles, and more. Residents with assets exceeding €700,000 must file a declaration, though thresholds may differ across regions. Non-residents with property in Spain must also declare. The tax is progressive, with rates varying by region and asset value. Understanding valuation methods and available allowances is crucial. Declarations are due by June 30th, with asset values determined as of December 31st of the previous year.


What is it?

The wealth tax or “impuesto de patrimonio” is a direct and personal tax on the value of personal assets. Fiscal residents in Spain have to declare their worldwide assets and non residents with properties in Spain have to declare their assets in the country. Most european countries do not have this tribute, so if you are a foreigner in Spain this might be new to you and can cause an unpleasant surprise if you do not watch out.

Besides, in Spain, this tax is transferred to the Autonomous Communities and these can modify deductions and allowances, resulting in a heterogeneous and confusing fiscal landscape. This also means that you should be aware of where you live in Spain since this can have important fiscal consequenses.

Wealth tax is to be paid on top of other taxes like personal income tax, inheritance tax or capital gain tax, so do not make the mistake to think that by just doing your annual tax declaration you are out of the woods.

Taxable assets are real estate properties or rights, savings, investments, cars, yachts, jewelry, art and similar items. Not taxable are for example household furniture and appliances, commercial assets, intellectual property rights and pension funds or rights.


Who has to submit a wealth tax declaration?

Wealth tax is an individual tax that must be submitted individually, even if you are married under a communal arrangement. As a general rule, you are obliged to present a declaration if you own assets for a net value over €700.000 if you are a resident in Spain. Again, there may be differences between the autonomous regions. For example, in Catalonia the threshold is set at €500.000.

If you are a resident in Spain and own your main residence, there is a reduction of €300.000 of your taxable base. If you are a non resident however, this reduction does not apply as it is assumed that in this case your main residence is located in another country.

Even if the sum of your net assets is below the threshold, you might have to submit a declaration. This is the case if the gross value of the combined assets exceeds a certain amount (generally €2.000.000). In this case the declaration is informative only and no tax will have to be paid, but you can get fined for not presenting the declaration.


How much do i have to pay?

Like the personal income tax, the wealth tax is a progressive tax, meaning it is composed of tax scales that increase as the value of your combined net assets increases. The state scale runs from 0,2% on the lowest scale to 3,5% on the highest scale, but some autonomous communities apply different percentages that are even higher. As of 01/01/2021 the state scales to be applied are as follows:

On the bright side, there are communities that apply parcial or full allowances with Madrid leading the pack applying a 100% allowance or La Rioja applying a 75% allowance. If you are a non resident however, these allowances do not apply and you will be required to pay according to the state scales.

Furthermore, the taxable amount depends on the valuation method applied. Different valuation methods may apply depending on the type of asset and the guidelines provided by the tax agency or legal jurisdiction and can lower your taxable base.

Apart from the type of valuation applied, there might be other options to reduce your taxable base like investing in certain assets that are tax exempt or restructuring your investments taking into consideration the limitations on wealth tax relative to your overall taxable base.

As you can see, even a relatively simple tax like this one can become quite complicated in Spain and it is wise to consult a professional in case of doubt.


When is the wealth tax declaration due?

Like personal income tax, this tax must be filed before the 30th of June. As there may be a substantial amount of documentation to be gathered and translated, we recommend to start preparing early. For example, we require information to be delivered by May 1st in order to prepare this declaration for our clients.

The date of validation of your assets is December 31st of the previous year. In this sense, if assets are to be moved for fiscal optimization, this is a date to take into account.


What documentation should I prepare?

A. Residence and other real estate

  • Purchase value real estate and copy last IBI (property tax) assessment in Spain.
  • Balance mortgages and loans on the 31st December.

B. Saving accounts, investments and life insurances

  • Saving accounts and deposits: average balance last quarter and balance 31/12.
  • Investment portfolio: listed values on the end of the year.
  • Value life insurance on 31st December

C. Other

  • Market value of jewellery, fur, boats and vehicles.
  • Shares in unlisted companies. We inform you about the valuation.
  • Other possessions, rights and particularities.

Can you help me out?

  • We will be happy to do your declaration, but please take into account the below indications:
  • Let us know if want us to do your income tax declaration as soon as possible. We have a limited capacity and will accept clients in chronological order. Our recurring clients will have priority.
  • Method of delivery: Please provide us with copies of all the relevant documents organized as effectively as possible and according to the codification of the items contained in this document. All amounts need to be provided in euro.
  • Deadline: We need to receive your information before 1st of May. Given that collecting (and possible translation) of documentation is time consuming, we kindly request to comply with this apparently early deadline.
  • Liability: We will prepare your tax declaration based on the information you have provided us with. You are therefore responsible for providing us with correct and complete information. We do not accept any liability due to inaccurate, unclear and incomplete information.
  • Responsibility: If we prepare your income and/or wealth tax declaration, this does NOT imply that we will notify or prepare any other possible tax declarations (such as for example the property tax IBI). We will do our best to inform you, but we may not have all the background information required. You are therfore responsible for your tax fillings and payments unless you have specifically contracted our services for each.
  • Tax correspondence address in Spain: It is of importance that you have a correspondence address in Spain. The Spanish Tax Authorities may proceed to check of the validity of the data of the tax return and failure to provide a timely reply may lead to a unilateral correction of the declaration accompanied with fines or sanctions. We offer the possibility to use our address as a correspondence address in case of need. For more information, please contact us.
  • Payment: In June we will inform you about the amount to be paid to the Spanish tax authorities. You will have to make sure that on the 30st June the balance of your bank account is sufficient to pay this amount and that the account is configured correctly for direct debits from the tax authorities in order to avoid possible fines.
  • Terms and conditions: On our services general conditions apply, such as payment terms and limitation of liability to the amount covered by our insurance policy

Fees and conditions

Included: Supplying information about the required data, organize the information, preparing the declaration based on this information, and submitting the declaration.

Not included: Additional activities or services due to tax inspections or following requests for additional studies or information. Third party costs (courier services, the cadastral service, sworn translations) will be reinvoiced. Fees exclude VAT.

1. Basic €225

  • In case the declaration only includes real estate and bank accounts.
  • Rate only applicable in case information has been provided through clear overviews or if we already have it on file.

2. Extended €395

  • In case you (also) have investments, life insurances, and shares in (family) businesses or other possessions.
  • Rate only applicable in case information has been provided through clear overviews or if we already have it on file.

3. Complex €125 / hour

  • In case special or not before mentioned aspects are applicable.
  • Also applicable if no clear overview overviews are provided or if the information is provided late.

4. Additional work (If applicable) €65

  • When requesting NRC (Número de Referencia Completo) via bank branch by Accompany.
  • When requesting payment deferral and/or payment terms from the Spanish tax office.
  • Also applicable if the amounts are not provided in euros.

Sign me up!

By submitting this form you will be placed on the list of applicants in chronological order. Our capacities are limited and inscription is no guarantee for admission. We will confirm admission of your request before the process starts.

Once you have confirmed acceptance of fees and conditions, and we have received your payment, we will process your declaration.

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The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.