Andalucía has become one of Spain’s most tax-attractive regions thanks to its rules on wealth tax for both residents and non-residents.
But with the introduction of Spain’s new Solidarity Tax on Large Fortunes, those with assets over a certain amount may still face national-level obligations.
Here’s what you need to know.
If you’re a high-net-worth individual (HNWI) living in Spain, the subject of wealth tax may be top of mind, especially if you’re based in the beautiful Andalucian region.
While wealth tax (Impuesto sobre el Patrimonio) has been part of Spain’s tax landscape for many years, since the 19th Century, Andalucía has recently undergone significant tax changes that have caught the attention of both residents and non-residents
This article explores how wealth tax in Andalucia is applied, the differences between residents and non-residents, the introduction of the Solidarity Tax on Large Fortunes, and the regional changes that have made Andalucía increasingly attractive for wealthy individuals and investors.
Wealth tax is a tax on the net assets of individuals. Unlike income tax, which is levied on earnings, wealth tax is based on the total value of your worldwide assets, such as property, investments, and savings, minus any liabilities such as mortgages or other debts.
Spain is one of the few countries in the European Union that still levies a wealth tax, and this tax is managed at the regional level. This means the rates, exemptions, and allowances can vary significantly depending on your region of tax residency.
Both Spanish residents and non-residents who own property or other qualifying assets in Spain are subject to the tax. The taxable base includes all capital assets located in Spain, though exemptions and tax rates differ from one autonomous region to another.
Historically, wealth tax rates ranged from 0.2% to 2.5%, depending on the value of assets.
However, in 2022, the Andalusian government made a landmark move by introducing a 100% allowance on wealth tax for both residents and non-residents.
This decision mirrors the approach taken in the Madrid region and aims to make Andalucía one of the most tax-efficient regions in Spain, particularly for high-net-worth individuals and foreign investors.
As of 2022, Andalucía has implemented a 100% exemption from wealth tax.
This means that residents and non-residents who hold assets in Andalucía are no longer required to pay regional wealth tax, substantially lowering the tax burden for individuals with property and other assets in the area.
This policy offers a significant tax advantage for those residing in or owning property in Andalucía, positioning the region as an increasingly popular destination for HNWIs looking for a tax-friendly location within Spain.
Under Spanish wealth tax legislation:
With Andalucía’s 100% allowance, no wealth tax is payable by either residents or non-residents in this region.
This exemption forms part of a broader strategy by the Andalusian government to make the region more competitive for both personal and corporate taxation.
In November 2022, the Spanish central government introduced the Solidarity Tax on Large Fortunes, aimed at increasing revenue from the wealthiest individuals. This tax applies to:
Key Features of the Solidarity Tax on Large Fortunes:
If you are a resident, you must declare all global assets, including property, stocks, art, and valuables.
If you are a non-resident, you only need to declare your Spanish assets, such as property or investments.
This tax is managed and collected by the national government, not by the regional authorities, and is intended to complement, not replace, the existing wealth tax.
Even if the regional wealth tax in Andalucia is abolished via the 100% exemption, the Solidarity Tax on Large Fortunes remains fully applicable to qualifying individuals in the region.
What does this mean for residents in Andalucía?
If you reside in Andalucía and your assets exceed €3 million, you will still be subject to the Solidarity Tax, even though you are exempt from regional wealth tax.
What does this mean for non-residents with property in Andalucía?
Non-residents with Spanish-based assets valued over €3 million, such as property in Andalucía, are also subject to the Solidarity Tax.
However, they are only taxed on assets located in Spain, and not on their worldwide wealth.
The abolition of regional wealth tax in Andalucia has dramatically altered the tax planning landscape for both residents and non-residents. With a 100% exemption in place, the region is now one of the most attractive destinations in Spain for wealthy individuals seeking a favourable tax environment.
However, the national government’s Solidarity Tax on Large Fortunes continues to apply, targeting those with assets exceeding €3 million. This means that, while Andalucía offers significant tax relief at the regional level, HNWIs may still face national-level obligations especially if they hold substantial real estate or investment portfolios.
In light of these complex changes, anyone considering moving to Andalucía or investing in property here should seek professional financial advice to fully understand their tax exposure and planning opportunities.
Disclaimer: Tax laws, rates, and reliefs are subject to change and may vary depending on individual circumstances and residency status. Any information provided on this website is based on our understanding of current regulations (or the date of when the content was published) and should not be considered personalised financial or tax advice. As tax obligations can differ across regions, countries and evolve over time, we strongly recommend seeking professional advice tailored to your specific situation before making any financial decisions.
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