Wealth Tax Spain

How much wealth tax do you pay in Mallorca?

Spanish wealth tax (Impuesto sobre el Patrimonio, IP for short) only kicks in above a tax-free allowance. In the Balearics, this allowance stands at €3,000,000 per person, while the national fallback rule sets it at €700,000. If a self-occupied main residence (vivienda habitual) is added, up to a further €300,000 remains tax-free on top of that.

Regardless of this, a filing obligation already arises as soon as your Spanish assets and rights gross exceed €2,000,000 — even if no tax is ultimately due. The solidarity tax on large fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas, ITSGF) starts considerably higher: only above its own wealth threshold, and since a further allowance of €700,000 is deducted from that, the first tax liability only arises a bit above that. The calculator shows exactly where the threshold lies in your case.

How the calculation works

The order of the calculation steps determines the result, and it's the same for both taxes. What counts on the reference date is what belongs to you: property, cash holdings, securities, vehicles, boats, art. From this you deduct the verifiable debts secured against it — typically the Spanish mortgage. What remains is your net worth.

From the net worth, the exemption for the main residence is deducted, provided you have one. The result is the taxable base (base imponible). Only then is the personal allowance (mínimo exento) deducted; what remains is the taxable liquidable base (base liquidable). The progressive scale is applied to this, giving the tax liability (cuota íntegra).

The ITSGF follows the same path with its own allowance and its own scale. The decisive step is the last one: the wealth tax paid for the same year is credited against the ITSGF. So the two are not added together — the higher one determines the total liability. The calculator above runs both calculations in parallel.

Often overlooked: for property, it's not the purchase price alone that counts, but the highest of three values — the acquisition value, the cadastral value, and the value determined by the authorities. How these are arrived at is explained in the guides on valor catastral and on valor de referencia.

Who is entitled to apply the Balearic regulation

This is where the amount is decided for most owners of a holiday property. Spain recognises two forms of tax liability: unlimited liability (obligación personal) for tax residents, who must declare their worldwide assets, and limited liability (obligación real) for non-residents, who only declare their Spanish assets. Anyone whose centre of life is outside Spain belongs to the second group.

The widespread rule of thumb that the high Balearic tax-free allowance is reserved for residents falls short. The Disposición adicional cuarta of Ley 19/1991 expressly grants taxpayers with limited tax liability the right to apply the regulation of the Autonomous Region (Comunidad Autónoma) in which the largest part of their Spanish taxable assets is located. This provision was redrafted by Art. 5.3 of Ley 11/2021 and has applied in this form since 11 July 2021 — before that, the right to choose was limited to non-residents living in the EU or the EEA.

For the typical case this means: if your finca is near Pollença or your flat is in Palma, and you have no other significant assets in Spain, your Spanish assets are overwhelmingly located in the Balearics. In that case, the Balearic tax rate together with its tax-free allowance is available to choose — the difference compared with the state allowance is considerable.

The reverse also applies: anyone who holds the largest share of assets elsewhere, for example in Madrid or on the Costa Blanca, falls back on the state scale and the state tax-free allowance (Art. 30.3 Ley 19/1991). And because the allocation depends on the valuation of all Spanish positions, the right to choose remains a case-by-case question that must be justified in the tax return — it is not automatic.

The solidarity tax on large fortunes (ITSGF)

The ITSGF was introduced as a temporary special tax and has not been abolished: the Disposición adicional quinta, paragraph 2, of Real Decreto-ley 8/2023 has extended it indefinitely, until a reform of regional financing replaces it. Anyone counting on it expiring is planning against the current legal position.

For owners without Spanish residency, a second change is important: since the redrafting by Art. 17 of the same law, the ITSGF tax-free allowance applies to all taxpayers, including those with limited tax liability. The original wording had restricted it to unlimited tax liability; the change applies retroactively to the day the tax was introduced.

Nevertheless, and this should honestly be mentioned: in the Balearics, the ITSGF practically results in no additional payment burden, because the Balearic wealth tax on the same values is higher and is credited against it. This is a calculation outcome, not an exemption, and it can change depending on the structure of one's assets. The calculator shows both taxes separately, so that you can see it rather than guess.

Special cases

Spouses and co-ownership

Wealth tax knows no joint assessment. Each person is assessed individually, has their own personal allowance and declares their own share. If a house belongs to two people, each owning half, each half is set against the full personal allowance; in sole ownership, the allowance is only available once. This is one of the biggest levers — and it is decided at the time of purchase, with only tax consequences afterwards.

The combined cap

Art. 3.Doce Ley 38/2022 caps the sum of income tax, wealth tax and ITSGF at 60% of the sum of the income tax assessment bases; the solidarity tax is thereby reduced by no more than 80%. For wealth tax alone, Art. 31 Ley 19/1991 sets the same limit. The wording of both provisions names only unlimited tax liability — but that restriction is no longer applied: the Tribunal Supremo struck it down as unjustified unequal treatment in judgments 1372/2025 of 29 October 2025 and 1402/2025 of 3 November 2025, the TEAC carried it over to the ITSGF on 18 December 2025, and the forms have been adapted: form 714 from tax year 2025, form 718 for returns filed from 1 July 2026. As a non-resident you can therefore invoke the cap as well; for earlier years through a correction of the self-assessment within four years. The calculator still does not apply it — it would need your income tax data, and your result may come out too high because of that.

Debts

Debts are only deductible if they can be proven to exist and are attributable to assets taxable in Spain. The Spanish mortgage on the finca counts; a loan from a German bank unrelated to the property generally does not. Proof means the contract, the balance as of the reference date, the payment flow — not just a figure in the return. Anyone who transferred money for the purchase also has a separate obligation under the AWV reporting obligation alongside this.

When ownership changes

Anyone who moves their residence to Spain or gives it up again switches between limited and unlimited tax liability — the consequences are described in the guide on exit taxation. Anyone who transfers or bequeaths assets shifts the wealth tax to the next generation; on this, see the rules on inheritance and gift tax in the Balearics.

Deadlines and forms

What matters is the reference date of tax accrual (devengo): 31 December. What you own on that day is assessed — a sale in January no longer changes anything about the previous year, but a purchase in December does.

The declaration is filed in the following year, in parallel with the income tax campaign in spring and early summer. The exact dates are set anew each year by the Ministry; so don't rely on last year's date, but on the announcement by the Agencia Tributaria (AEAT), the national tax administration. For regional matters, the Balearic tax administration ATIB (Agència Tributària de les Illes Balears) is responsible; the filing itself is submitted electronically to the AEAT.

The two taxes differ in terms of the filing obligation. You declare wealth tax via Modelo 714 even if no payment is due — as soon as the gross value of your assets and rights exceeds €2,000,000. It is measured without deducting debts, which is why even heavily financed owners must file. For the ITSGF, it's the other way round: the Modelo 718 only needs to be filed if there's actually something to pay.

Common misconceptions

• Confusing the tax-free allowance with tax exemption. The filing obligation and the payment threshold are two different things, and the filing threshold is lower.
• Assuming the Balearic tax-free allowance is reserved for residents. The right of election under Disposición adicional cuarta is also open to non-residents.
• Deducting debts without proof. An estimated remaining balance won't hold up to scrutiny — and the correction comes with a surcharge.
• Assuming the ITSGF has been abolished.The fact that it usually results in no payment in the Balearics is a consequence of the tax credit, not an abolition.
• Calculating only with the purchase price and only with the property. The highest applicable value is used, and assets also include bank balances and investment portfolios.

Legal basis and current status

Wealth tax is based on Ley 19/1991. The Balearic rate and tax-free allowance are set out in Decreto Legislativo 1/2014 of the Comunidad Autónoma de les Illes Balears. The ITSGF was introduced by Art. 3 of Ley 38/2022 and amended and extended by Art. 17 of Real Decreto-ley 8/2023.

Tax law changes, often faster regionally than nationally. The calculator above shows the current legal status and sources itself. This page provides context and does not replace advice for individual cases; how you hold and divide your property should be discussed before the purchase, not afterwards.

Mortgage and income tax: how much was the deduction in 2024?

The question of whether a mortgage is tax-deductible concerns Spanish income tax (IRPF), not the wealth tax discussed on this page. For the 2024 tax year, eligible taxpayers could generally deduct 15% of qualifying payments for their owner-occupied main residence from their income tax. The annual deduction base was capped at €9,040, giving a maximum deduction of €1,356 per taxpayer. For a joint tax return, the €9,040 limit applied only once.

Eligibility depended on transitional rules for a main residence purchased before 1 January 2013 for which an entitlement to the deduction already existed. A mortgage on a holiday property does not meet this requirement. Wealth tax, by contrast, does not involve a percentage deduction for annual repayments; it concerns attributable, verifiable debts as at the relevant date. This is not legal or tax advice.

Frequently asked questions

Checklist before filing

• Clarify your tax status: non-resident in Spain (only Spanish assets) or resident in the Balearics (worldwide assets)?
• Compile all items as of 31 December — property, bank accounts, investment portfolios, vehicles, boats — each with its applicable value.
• Check whether the largest part of your Spanish assets is located in the Balearics; this determines which tax-free allowance and which rate apply.
• Document debts: contract, remaining balance on the reference date, payment flow.
• For co-ownership, calculate each person separately — each has their own tax-free allowance.
• Check the filing obligation separately: Modelo 714 even without a payment due, Modelo 718 only if there's a payment due.
• Check the campaign period for the relevant year with the Agencia Tributaria, don't rely on the previous year's date.

What you need next

First calculate your case, separately for each owner. Then check the valuation via Katasterwert and reference value — that's where the amount for the assessment basis arises. Are you considering a move: exit taxation. Are you planning a transfer within the family: inheritance and gift. If a purchase is imminent, the AWV reporting obligation comes into play — and what the wealth tax means in the year of purchase itself is covered in wealth tax on property purchase.