Wealth Tax in Spain: Modelo 714, Allowances and Solidarity Tax 2026

Anyone living in Spain or holding assets here will sooner or later encounter the Spanish wealth tax – the Impuesto sobre el Patrimonio, known as IP. This annual tax captures net assets as at 31 December and is declared via the Modelo 714. Since 2022, there has also been the national solidarity tax (Impuesto de Solidaridad de las Grandes Fortunas, IGF), which applies when certain autonomous communities had reduced the wealth tax to zero. In this guide you will learn: which allowances apply, how properties are valued, what distinguishes residents from non-residents, how the Balearic Islands structure their rates, when you must submit the Modelo 714 – and how the wealth tax and solidarity tax interact so that no double taxation arises.

• All tax guides at a glance

What is the wealth tax – and who does it affect?

The Spanish wealth tax (Impuesto sobre el Patrimonio) is a direct annual tax on the net assets of a natural person as at 31 December. It was first introduced in 1977 by the Ley del Impuesto sobre el Patrimonio and its fundamental structure, still valid today, was shaped by Law 19/1991.

Who is liable to pay tax?

In principle, there are two groups of persons:

1. Tax residents in Spain (more than 183 days per year in the country, or with their primary economic centre of life in Spain) are taxed on their worldwide assets.
2. Non-residents who hold assets in Spain (for example, a holiday property in Mallorca) are taxed only on assets located in Spain taxed.

Note: The wealth tax is a regional tax (impuesto cedido). This means: the autonomous communities can set their own allowances, tax rates and reductions within certain limits. For non-residents, the national rules apply, unless a double taxation agreement restricts Spain's right to tax.

A particular case is the Autonomous Community of Madrid: it had effectively reduced the wealth tax to zero by means of a 100% rebate. The national solidarity tax introduced in 2022 was intended to offset this effect — more on that later.

What counts as taxable wealth?

Tax is levied on a person's total net wealth as at 31 December. According to our research, this covers the following asset categories:

From the total of all assets, deductible liabilities deducted – such as mortgages on properties – in order to determine the net wealth as the taxable base.

Important: Not every liability is deductible. Which debts can specifically be taken into account depends on the type of asset and should be clarified with a tax adviser.

How are properties valued for wealth tax purposes?

For many Mallorca property owners, real estate is the largest item in the wealth tax return. Valuation follows clear rules:

The property value applied is generally the highest of the following three figures:

1. Cadastral value (valor catastral)
2. Value assessed or recognised by the tax authorities (valor comprobado por la Administración)
3. Purchase price (price stated in the notarial contract)

In practice, for properties on Mallorca the purchase price or the officially assessed value is most commonly the relevant figure – particularly for more recent acquisitions. The cadastral value is often below market value, but it is not automatically the figure to be applied.

Note: Since 2022, Spain has had the so-called Valor de Referencia Catastral (VRC), which the Ministry of Finance publishes for properties. Whether and how it applies for wealth tax purposes must be examined on a case-by-case basis. Discuss this with your tax adviser – particularly for prestige properties on Mallorca, the differences can be considerable.

Allowances: what remains tax-free?

General personal allowance

The national allowance is 700,000 euros per person. Only the net wealth exceeding this threshold is subject to tax. For Mallorca, however, this is not the relevant figure: the Balearic Islands raised the minimum allowance to 3,000,000 euros per person as of 1 January 2024 (Ley 12/2023). Where 700,000 euros is mentioned below, it refers to the national framework.

Additional allowance for the primary residence

For the owner-occupied primary residence (vivienda habitual) there is an additional allowance of up to 300,000 euros. This is deducted from the property value before it enters the tax base.

Regional Variations

Please note: The exact allowances may vary depending on the Autonomous Community. The figures stated here reflect the position confirmed by the research available. For the Balearic Islands, an increased minimum allowance of 3,000,000 euros per person has applied since 1 January 2024 under Ley 12/2023. This means the national standard of 700,000 euros plus the primary residence allowance of up to 300,000 euros is, in practice, no longer the relevant figure on Mallorca.

Filing obligation regardless of tax liability

Even those who have no tax to pay are obliged to submit the Modelo 714 if their gross assets exceed 2,000,000 euros – this applies as a reporting obligation resulting in a 'nil tax' assessment.

Tax Rates: National, Balearic Islands and Solidarity Surcharge

National Rate (Impuesto sobre el Patrimonio)

The nationally set rate is progressive and ranges from 0.2% to 3.5%. Autonomous Communities may set their own rates; where they do not, the national rate applies.

Balearic Islands Rate

The Balearic Islands have established their own tax rate. Research confirms a range for the Balearic Islands of 0.28% to 3.45% on the taxable net assets.

Solidarity Tax (IGF) – the national supplementary tax

Important: The wealth tax attributable to the Autonomous Community can be offset against the solidarity tax. This does not create a full double burden – but it does establish a minimum level of taxation that prevents any tax liability from being eliminated entirely through regional zero rates.

Residents and non-residents are equally subject to the solidarity tax if their relevant net assets exceed the threshold of €3,000,000.

The Modelo 714: declaration form and submission

The Modelo 714 is the official form for the annual wealth tax return in Spain. It is submitted electronically via the platform of the Agencia Tributaria (AEAT).

Who must file?

• Residents with worldwide net assets above the applicable allowance (€3,000,000 in the Balearic Islands, €700,000 under the national standard, plus any residential property allowance where applicable)
• Residents with gross assets exceeding €2,000,000 (even where the tax amount is nil)
• Non-residents with net assets situated in Spain above the allowance

How is the return submitted?

The declaration is submitted exclusively electronically, either:

• Using the Certificado Digital or Cl@ve PIN of the taxpayer themselves
• Via an authorised tax adviser (asesor fiscal) or solicitor

Step by step: submitting the Modelo 714

1. Inventory all assets as at 31 December – real estate, accounts, securities, vehicles, jewellery, shareholdings
2. Determine valuations – in particular property values in accordance with the rules set out above
3. Compile deductible liabilities – e.g. outstanding mortgage amounts
4. Calculate net assets and compare against the applicable allowance
5. Clarify regional jurisdiction – Which Autonomous Community has jurisdiction for you? (place of residence for residents; location of assets for non-residents)
6. Complete and submit the Modelo 714 electronically via the AEAT platform or through a tax adviser
7. Set up payment or direct debit if a tax liability exists

Please note: The Modelo 714 is submitted as part of the annual tax declaration campaign which in Spain typically runs from April to July – in parallel with the income tax return (IRPF). The exact deadlines are set by the AEAT each year; check the current dates directly on sede.agenciatributaria.gob.es.

Residents vs. Non-Residents: The Key Differences

For German nationals without Spanish tax residency who own a property on Mallorca: they are non-residents and are taxed exclusively on assets located in Spain. The Germany–Spain double taxation agreement may limit Spain's right to tax in this regard — this aspect should be examined on an individual basis.

If you are considering moving your tax residency to Spain, read our guide on taxes as a resident (IRPF) first and find out more about Residencia.

Tax Exemptions and What Remains Tax-Free

Not everything counts as taxable assets. Research confirms the following relevant exemptions:

• Primary residence (primary residence): Up to 300,000 Euro of the value is excluded as an additional allowance
• Business assets and company shareholdings: Under certain conditions (such as active involvement, primary source of income, minimum shareholding), company interests may be exempt from wealth tax – the precise conditions are complex and require professional tax advice
• Works of art and cultural assets: Partially exempt under certain circumstances
• Pension products where payments have not yet commenced: Depending on the structure

Please note: The exemption for business assets (empresa familiar) is subject to strict conditions. Anyone using a holding structure or holding property through an S.L. should seek advice at an early stage from a tax adviser with expat experience.

Wealth tax and the solidarity surcharge: how they interact

The solidarity surcharge (Impuesto de Solidaridad de las Grandes Fortunas, IGF) was introduced in 2022 as a supplementary national tax. It applies from a net wealth of 3,000,000 Euro and levies rates of 1.70 % to 3.50 %.

How does the offset work?

The wealth tax (IP) paid to the relevant autonomous community is credited against the solidarity surcharge. This means:

• Those residing in a region with standard IP rates (e.g. Balearen) pay the difference between the IGF and the IP – or nothing, if the IP already equals or exceeds the IGF.
• Those residing in Madrid who have paid no IP there thanks to the regional bonificación pay the IGF in full.

Practical example (simplified): Net wealth 5,000,000 Euro, resident on Mallorca:

• IP is calculated under the Balearic rate on the amount above 3,000,000 €
• IGF is calculated on the amount above 3,000,000 €
• IP paid is credited against the IGF liability

The solidarity tax applies to residents on their worldwide net assets, and to non-residents on their net assets located in Spain.

If you also hold assets abroad that you are required to declare via the Modelo 720, the interaction between these declarations requires particularly careful planning.

Most common mistakes with wealth tax on Mallorca

1. Property incorrectly valued: Using the cadastral value even though the purchase price was higher — this can result in additional payments upon review.
2. Primary residence allowance overlooked: The additional allowance of up to 300.000 Euro for owner-occupied property is not claimed.
3. Worldwide assets not declared: Residents must declare all assets worldwide — not only those located in Spain.
4. Debts not deducted: Outstanding mortgages or other deductible liabilities are overlooked.
5. Regional rate not applied: Anyone residing in the Balearic Islands is subject to the Balearic rate — not automatically the national one.
6. Filing obligation ignored despite zero tax liability: Where gross assets exceed 2.000.000 Euro, the Modelo 714 must still be submitted even if no tax is due.
7. Deadline missed: The submission deadline runs in line with the IRPF campaign — filing late risks surcharges.
8. Solidarity tax overlooked: Anyone exceeding the 3-million threshold must take the IGF into account separately, even if they are already paying IP.

What comes next? Related tax obligations

Wealth tax is rarely the only tax obligation. These guides will help you understand the full picture:

• Income tax as a resident: As a tax resident in Spain, you are liable for income tax on your worldwide income → Taxes as a Resident (IRPF)
• Non-Resident Tax: As a non-resident with a Spanish property, the Impuesto sobre la Renta de No Residentes also applies → Non-Resident Tax Spain
• Modelo 720 – Reporting Foreign Assets: Residents with foreign assets above certain thresholds must submit the Modelo 720 → Modelo 720 Reporting Obligation
• ETFs and Investment Funds: Anyone holding capital investment products should also be aware of the tax treatment → ETF & Index Funds Spain
• Beckham Law: Newly relocated professionals and entrepreneurs can, under certain conditions, apply for a flat-rate taxation arrangement – with implications for wealth tax liability as well → Beckham Law Spain
• Balearic IRPF Deductions: For residents on Mallorca, there are regional particularities regarding income tax → IRPF Deductions Balearic
• Luxury Goods: Boats, yachts, and high-value vehicles form part of taxable wealth → Importing a Luxury Car to Mallorca | Berth Mallorca Marina

Checklist: Am I Liable for Wealth Tax on Mallorca?

Work through these points in order:

• Clarify Tax Residence: Am I a tax resident in Spain (> 183 days / centre of economic interests)?
• Inventory Your Assets: Compile all assets as at 31 December – including foreign accounts, funds, and properties
• Compile your debts: Record mortgages and other deductible liabilities
• Calculate net assets: Assets minus deductible debts
• Apply allowances: €3,000,000 per person in the Balearic Islands (national standard: €700,000) + up to €300,000 for primary residence
• Check the regional rate: Do you live in the Balearic Islands? → Balearic rate 0,28–3,45 %
• Check gross assets: Are they above €2.000.000? → Obligation to file even if tax liability is zero
• Check the solidarity surcharge: Is net wealth above €3.000.000? → Take IGF into account
• Submit Modelo 714 on time: Within the IRPF/IP campaign period (typically April–July)
• Engage a tax adviser: Especially where overseas assets, company shareholdings or borderline thresholds are involved

Conclusion

The Vermögenteuer Spanien is, for many expatriates and property buyers on Mallorca, not a theoretical matter but a very real annual obligation. The Balearic minimum allowance of 3,000,000 euros per person (national standard: 700,000 euros) plus up to 300,000 euros for the primary residence protects the vast majority of cases on Mallorca – yet anyone who owns a high-value property, holds capital assets abroad, or exceeds the threshold of 3 million euros cannot avoid careful planning.

The Balearic Islands have their own rate, with a band of 0,28–3,45 %, which differs from the national rate. And the solidarity surcharge ensures that a minimum tax burden remains in place even where an Autonomous Community had previously nullified the IP.

The key points are: submitting Modelo 714 correctly and on time, declaring all assets in full, and making use of the offset possibilities between IP and IGF. An experienced tax adviser with knowledge of German-Spanish tax law is not an optional extra in this situation, but an absolute necessity – particularly where worldwide assets, company shareholdings, or luxury goods are involved.

Official sources

• Agencia Tributaria (AEAT) – Modelo 714: https://sede.agenciatributaria.gob.es — Forms, deadlines, electronic filing
• Ley 19/1991, de 6 de junio, del Impuesto sobre el Patrimonio (BOE): https://www.boe.es/buscar/act.php?id=BOE-A-1991-14392 — The primary legislation governing Spanish wealth tax
• Ley 38/2022 – Impuesto de Solidaridad de las Grandes Fortunas (BOE): https://www.boe.es/diario_boe/txt.php?id=BOE-A-2022-22138 — Solidarity tax on large fortunes
• Ley 22/2009 – Financing system for Autonomous Communities (BOE): https://www.boe.es/buscar/pdf/2009/BOE-A-2009-20375-consolidado.pdf — Basis for regional tax autonomy
• ATIB – Agència Tributària de les Illes Balears: https://www.atib.es — The Balearic Islands' competent tax authority for regional taxes