How Will the Elimination of Wealth Tax in Andalucia Function?
The regional administration has made the decision to implement a complete 100% waiver of the wealth tax (known as “impuesto sobre el patrimonio” in Spanish), effectively relieving all taxpayers of their obligations. Consequently, starting from the tax year 2023, wealth tax will cease to be collected in Andalucia.
Why Did the Regional Government Abolish It?
This measure is intended to alleviate the fiscal burden on affluent individuals and encourage them to establish residency in Andalucia. The regional government anticipates attracting approximately 7,000 new residents next year as a result.
What About the Rest of Spain?
The elimination of wealth tax in Andalucia represents something
of a rarity in Spain. In fact, it is only the second region in the country to do so, following in the footsteps of Madrid. Every other region, with the exception of the Basque Country, which operates under a distinct fiscal regime, continues to impose wealth tax. This tax applies to the worldwide assets of residents and the property assets in Spain of non-residents.
What Is the Savings on Wealth Tax in Andalucia Due to This Measure?
Currently (including the 2022 tax year), wealth tax is levied on a progressive scale ranging from 0.2% to 2.5% based on the value of assets, depending on your residency status in Spain or globally. Nevertheless, there are exemptions in place:
A deduction of up to €700,000 on personal assets, excluding your primary residence.
A deduction of up to €300,000 based on the fiscal value of your primary residence.
In practice, these deductions mean that the majority of individuals are exempt from paying wealth tax. Consequently, in 2020 (the most recent available data), only around 16,700 people in Andalucia paid this tax.
The latest measure exempts everyone from wealth tax.
When Will This Measure Take Effect?
This measure will be effective starting from the 2023 tax year.
Will I Still Be Required to Pay Wealth Tax in Andalucia for the Year 2022?
Yes, unless you qualify for an exemption (as mentioned above).
