Wealth Tax (Impuesto de Patrimonio) for Non-Residents in Andalusia

Wealth tax for non-residents in Andalusia: the short version

If you are a foreign buyer purchasing a new-build home anywhere on the Costa del Sol, the good news about the Spanish wealth tax (Impuesto sobre el Patrimonio) is that Andalusia is one of the most favourable regions in Spain. Since a regional reform took effect in 2022, Andalusia applies a 100% rebate (bonificación) on the wealth tax due, which means the effective liability for the great majority of non-resident owners is zero.¹ However, “zero to pay” is not always the same as “nothing to do”, and a separate state-level tax can still reach the largest fortunes. This guide explains how the wealth tax works for non-residents, what the Andalusian rebate covers, and where the exceptions lie.

How the Spanish wealth tax treats non-residents

The Impuesto sobre el Patrimonio is an annual tax on the net value of a person’s assets, calculated at 31 December each year. Residents are taxed on their worldwide wealth (obligación personal), but non-residents are taxed only on assets and rights located in Spain (obligación real).² For a typical Costa del Sol buyer this means the tax looks only at your Spanish property, any Spanish bank balances, and other Spanish-situated assets. Your home country pension, portfolio and property fall outside its scope entirely.

“Net value” means the value of those Spanish assets minus any debts secured against them. A mortgage taken out to buy the property is deductible, so a highly leveraged purchase produces a much smaller taxable base than an all-cash one.

The 700,000 euro exemption

Every taxpayer, resident or non-resident, benefits from a national tax-free allowance of 700,000 euros of net wealth.¹² Only the value above that figure enters the tax calculation. Because the allowance is per person, a couple who own a property jointly have a combined 1,400,000 euros of Spanish net wealth before the tax even begins to bite.

The 300,000 euro main-home relief usually does not apply

Spanish residents also enjoy a further exemption of up to 300,000 euros against the value of their habitual residence.¹³ For most non-residents this relief is not available, because a holiday or investment property on the Costa del Sol is not your habitual residence. It is worth knowing the relief exists, but you should not assume it applies to a second home.

Tax rates and the Andalusian 100% rebate

Where no regional scale applies, the state progressive scale runs from 0.2% on the first band up to 3.5% on net wealth above roughly 10.7 million euros.² In practice, though, non-residents may apply the rules of the Spanish region in which the greatest value of their Spanish assets is located.² For a buyer whose only Spanish asset is a Costa del Sol home, that region is Andalusia.

Andalusia applies a 100% rebate on the resulting wealth tax quota.¹ The effect is that, after the tax has been calculated on the state scale, the amount payable is reduced to nil. So even a non-resident whose Spanish net wealth comfortably exceeds 700,000 euros will normally have no Andalusian wealth tax to pay.

You may still have to file a return

A common trap is to assume that because Andalusia’s rebate wipes out the bill, there is nothing to submit. That is not correct. The wealth tax return (Modelo 714) must be filed if either there is tax to pay, or the gross value of your assets and rights exceeds 2,000,000 euros, regardless of any exemptions or rebates.³ A non-resident who buys a Costa del Sol property worth more than 2,000,000 euros should therefore expect to file an annual informational return even though the amount due is zero. The wealth tax campaign runs alongside the income tax campaign, broadly from April to June of the year following the tax year; confirm the exact dates for the year in question with a Spanish tax adviser or the Agencia Tributaria.

The Solidarity Tax on Large Fortunes: the important exception

Since the 2022 tax year, Spain has levied a separate state tax on the very wealthiest, the Impuesto Temporal de Solidaridad de las Grandes Fortunas, often shortened to the solidarity tax on large fortunes and declared on Modelo 718. Originally introduced as a temporary measure, it has since been kept in force on an ongoing basis.¹ This is crucial for high-value buyers, because it is a state tax and the Andalusian regional rebate does not cancel it.

Its main features mirror the wealth tax: non-residents are taxed by obligación real on Spanish assets only, and the same 700,000 euro personal exemption applies.¹ The tax only reaches net wealth of 3,000,000 euros or more, and its progressive brackets are:

• 1.7% on net wealth between 3,000,000 and 5,340,000 euros¹
• 2.1% on net wealth between 5,340,000 and 10,695,000 euros (approximately)¹
• 3.5% on net wealth above roughly 10,695,000 euros¹

To avoid double taxation, any wealth tax actually paid for the same period is deducted from the solidarity tax due.¹ In Andalusia, where the wealth tax is reduced to zero by the 100% rebate, there is usually nothing to deduct, so a non-resident with Spanish net wealth above 3,000,000 euros can end up paying the solidarity tax in full. In short: the Andalusian rebate protects you up to about 3,000,000 euros of Spanish net wealth, but not beyond it.

Worked examples for Costa del Sol buyers

A 1.2 million euro new-build bought jointly

A couple buying a 1,200,000 euro property jointly hold 600,000 euros of Spanish net wealth each. Both sit below the 700,000 euro allowance, so there is no wealth tax and, assuming they hold no other large Spanish assets, no filing obligation either.

A 2.5 million euro villa in one buyer’s name

A single non-resident owner of a 2,500,000 euro villa exceeds the 2,000,000 euro filing threshold, so a Modelo 714 return is required. The Andalusian 100% rebate still reduces the wealth tax to zero, and the net wealth is below 3,000,000 euros, so the solidarity tax does not apply. The result is an annual return with nothing to pay.

A 5 million euro estate in one buyer’s name

Here the Andalusian rebate again brings the wealth tax to zero, but net Spanish wealth is above 3,000,000 euros, so the solidarity tax applies to the slice above that figure at 1.7%. This buyer has a genuine annual liability despite Andalusia’s generosity, and specialist tax advice is essential.

How wealth tax fits with your other Spanish tax obligations

Wealth tax is only one part of the picture. As a non-resident owner you will also deal with non-resident income tax (IRNR) via Modelo 210, which applies an imputed income charge even on a property you do not rent out, and the annual municipal property tax (IBI) charged by your Costa del Sol town hall. On purchase, a new-build carries IVA and AJD rather than the second-hand transfer tax (ITP), and buyers should be aware of the 3% retention on sales by non-residents and the municipal plusvalía when the time comes to sell. Our related guides on non-resident income tax and Modelo 210, buying costs and taxes on new-build homes, and obtaining an NIE cover those areas in detail.

Practical takeaways

• For most foreign buyers on the Costa del Sol, the Andalusian 100% rebate means no wealth tax to pay.¹
• Still file Modelo 714 if your Spanish assets exceed 2,000,000 euros, even with nothing to pay.³
• Each owner has a 700,000 euro allowance, so joint ownership doubles the tax-free buffer.¹²
• Above roughly 3,000,000 euros of Spanish net wealth, the state solidarity tax can apply and the regional rebate will not shield you.¹
• Rules and thresholds change: confirm the current position with a qualified Spanish tax adviser before you complete.

This guide is general information, not personal tax advice. Individual circumstances, tax treaties and annual budget changes can all affect your position, so professional advice tailored to your situation is strongly recommended.