Investment approach
Spain wealth tax (Impuesto sobre el Patrimonio): property thresholds
Impuesto sobre el Patrimonio, Spain's wealth tax, is charged simply for owning assets above a threshold, and that includes non-residents with property in Spain. We cover the thresholds, how Catalonia differs and how to build the tax into your return calculations.
You pay Impuesto sobre el Patrimonio when the value of your assets exceeds the tax-free allowance: €700,000 under the national rules and €500,000 in Catalonia. A non-resident pays only on assets located in Spain, property included. It is an annual tax on ownership itself, not a tax on a transaction.
How it differs from other property taxes
Impuesto sobre el Patrimonio (wealth tax) is charged every year on the ownership of assets above a set threshold, including property in Spain owned by non-residents. It is separate from IRPF/IRNR, which are charged on income or gains, and separate from IBI, the annual local tax on the property itself.
Thresholds and regional differences
Spain's autonomous communities can set their own thresholds and rates. In Catalonia the tax-free allowance is €500,000; under the national rules it is €700,000. On top of that, a resident's main home is exempt up to €300,000.
A non-resident is taxed only on assets located in Spain. Since July 2021 any non-resident has been entitled to apply the rules of the community where most of the value of those assets is located; for a property in Barcelona, that means the Catalan rules. Whether they work out better than the national rules has to be calculated case by case. The Catalan rules are published by the Catalan tax agency, ATC.
Who this affects in practice
It mainly affects investors whose property in Spain is worth more than a certain threshold, or who own several properties. A single deal involving one modestly priced asset may not reach the taxable threshold at all. Even so, whether you need to file a return has to be checked every year, not just once when you buy: thresholds and rules change.
How to factor the tax into your return
Wealth tax is part of the annual cost of ownership, separate from IBI and from the tax on sale. If you hold a property for a long time, build it into the total cost of ownership for the full life of the project. We cover the other annual costs in our article on IBI.
Questions and answers
Is Impuesto sobre el Patrimonio payable if the property belongs to a Spanish company rather than to me personally?
The company itself does not pay it: Impuesto sobre el Patrimonio is charged only on individuals. The owner declares their shares in the company. There is a catch for non-residents: since the end of 2022, shares in an unlisted company whose assets are at least 50% Spanish real estate are treated as assets located in Spain and taxed here (Article 5 of the wealth tax law).
Is the exemption threshold the same throughout Spain?
No. Each autonomous community can set its own allowance and reliefs, so the threshold for property in Catalonia may differ from the one in another region. Check the regional rules currently in force before you run the numbers.