Which regions in Spain have the best wealth tax conditions?

Spain's wealth tax is largely run on a regional level, with autonomous communities able to offer discounts and exemptions to favour those paying it. This is what high-income foreigners should keep in mind.

In Spain there’s a wealth tax - el impuesto de patrimonio in Spanish - which is levied on those with large assets, both residents and non-residents.

It’s an annual tax, which must be paid on the total net value of your assets held on December 31st of the previous year.

Who has to pay wealth tax in Spain?

Over 200,000 taxpayers pay the wealth tax in Spain and you are required to pay it in one of two cases. The first is after applying for regional allowances, the net result is positive or if the total gross value of your assets exceeds €2 million.

For example, you are entitled to a €700,000 deduction if you live in Murcia and a €500,000 deduction if you live in the Valencia region. Everyone across Spain can also claim an allowance of €300,000 for each owner against the value of their primary residence.

Spain's wealth tax is a progressive tax, so the more you have, the higher the tax you have to pay. The general rates range between 0.20 and 3.50 percent, depending on how much your assets are worth. The highest rates are payable for those with a taxable base above €10,695 million, depending on where you live.

As is often the case in Spain, your exact tax bill will depend on where you live in Spain as each region has slightly different rules on it.

Some regions even set their own tax-free allowances and deductions or establish their own tax rates in order to try and be tax competitive and attract outsiders, whether Spaniards or from abroad.

Here’s what you need to know.

Which regions in Spain have the most favourable wealth tax conditions for foreigners?

Regions with €700,000 deduction

Firstly, there are several regions that use the state threshold of a €700,000 allowance.

Aragón, the Canary Islands, Castile-La Mancha, Castilla y León, and La Rioja all apply the minimum deduction of €700,000 on wealth tax.

The Canary Islands and Castilla y León also exempt assets and rights that form part of the protected assets of taxpayers with disabilities from the tax.

La Rioja offers a rebate for the difference between the full amount of the tax and that of impuesto de solidaridad a las grandes fortunas – known as solidarity tax on wealth.

Regions with a 100 percent rebate

Cantabria and Extremadura in many cases apply a 100 percent rebate on the wealth tax.

In Cantabria, taxpayers with net assets exceeding €3 million must calculate their full tax liability in accordance with regional regulations and apply a rebate equivalent to the difference between this and the liability resulting from the solidarity tax.

Regional rules

Most regions of Spain have their own rules and regulations on the Wealth Tax.

Andalusia: from 31 December 2024, the state tax scale will apply while the temporary tax on large fortunes is in force. The choice between two rebates is abolished, leaving only the variable rebate introduced in 2023.

Asturias: 99 percent rebate for assets and rights included in the protected assets of taxpayers with disabilities.

Balearic Islands: minimum exemption of €3,000,000 and 90 percent allowance for cultural consumption goods.

Catalonia: minimum exemption of €500,000, the tax scale is maintained, including a marginal rate of 3.48 percent for estates exceeding €20,000,000.

Valencia: minimum exemption of €500,000 (€1,000,000 for disabled people).

Madrid: minimum exemption of €700,000 and application of the state rate. The 100 percent rebate is not applicable while the solidarity tax is still in force.

Galicia: minimum exemption of €700,000. The maximum tax rate is 3.5 percent. General rebate of 50 percent and additional deductions for investments in agricultural businesses, historic centres and the recovery of agricultural land.

Navarre: minimum exemption of €550,000, exemption for the main residence up to €250,000 and a marginal rate of 3.5 percent.

Basque Country: In Vizcaya and Álava, minimum exemption of €800,000, with primary residences exempt up to €400,000. In Guipúzcoa, the minimum exemption is €700,000 and the exemption for primary residence is up to €300,000.

Murcia: State minimum exemption: exclusively applicable to income accrued on 31 December 2024, a general minimum exemption of €3,700,000.

Tax scale from 0.24-3 percent and a 100 percent deduction for contributions to projects of regional public interest.