Wealth Tax is an annual tax levied on the net wealth of individuals, it means, it is levied on all economic rights and assets owned, less any charges and encumbrances that reduce their value, as well as the personal obligations and debts of the owner.
The tax is payable annually on 31 December, and the taxpayers are:
- Individuals who have their habitual residence in Spanish territory, who are obliged to declare all the economic rights and assets of which they are holders, regardless of the place where the assets are located or where the rights may be exercised; they shall deduct the encumbrances and charges of a real nature that affect such assets or rights, as well as the debts for capital invested in them.
- Individuals who do not have their habitual residence in Spain and are holders of assets or rights which are located, may be exercised or must be exercised in Spanish territory, exclusively to the assets or rights they hold, provided that they are located, may be exercised or must be fulfilled in Spanish territory with deduction of the charges and encumbrances of a real nature affecting said assets or rights, as well as the debts for capital invested in them. There is a minimum exemption of 700,000 euros, applicable to non-residents subject to a real obligation to contribute.
Only persons who are in one of these situations will be obliged to file a Wealth Tax return:
- If the result of the calculation of the tax, once the appropriate deductions or allowances have been applied, is a deposit.
- When, in the absence of the above circumstances, the value of your assets or rights exceeds 2.000.000 euros.
Wealth Tax is a tax whose yield is ceded in its entirety to the Autonomous Communities. As a result of the transfer, the Autonomous Communities may assume regulatory powers over the minimum exemption, tax rate and tax deductions and allowances.
Within the framework of this transfer, Decree-Law 7/2022 of 20 September was published in the Official Gazette of the Autonomous Community of Andalucia, which abolishes the Wealth Tax in this Community, in the sense of establishing a 100% rebate on the amount of this tax.
This modification means that both resident and non-resident individuals who own real estate or other assets in the territory of the Community of Andalucía, and who according to the tax regulations are obliged to pay Wealth Tax, will not have to make any payment, as 100% of the resulting tax liability will be subsidised from this financial year 2022.