Wealth tax in Spain and Valencia: What HNW movers actually pay
Spain levies an annual Impuesto sobre el Patrimonio (Wealth Tax) on your net assets, and it is a regionally-ceded tax, so the bill in the Comunitat Valenciana can be very different from Madrid's. Here is the 2026 version of the guide we walk every high-net-worth client through before they pick a region.
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Reviewed 28 September 2026 by Michael Bastin
A note from Michael:
I am a relocation expert, not a wealth-tax payer talking his own book. But the question I get most from high-net-worth clients eyeing Valencia is some version of "will the region tax my net worth?" The honest answer surprises people: the Comunitat Valenciana raised its exemption sharply in 2025-2026 but still taxes wealth above that threshold, while Madrid charges nothing below about €3.7M of net wealth and, above it, collects the equivalent of the state Solidarity Tax.
I have watched clients with serious assets choose their autonomous community on this single line item, and I would rather you hear it from me upfront than from an adviser after you have signed a lease. None of this is tax advice. Confirm the current thresholds with a qualified Spanish adviser before you act.
Figures verified September 2026. Wealth tax is regionally-ceded and changes often. Confirm current thresholds and rates with a qualified adviser before filing.
What wealth tax is and who pays it
The Impuesto sobre el Patrimonio (IP) is an annual tax on your net worth: your assets minus your debts, measured at 31 December each year. It is filed on Modelo 714, alongside your income tax return (Modelo 100). The filing window is set each year by ministerial order: for 2025 it ran from 8 April to 30 June 2026, or 25 June if you pay by direct debit.
Who pays depends on your residency. Spanish tax residents are taxed on their worldwide net assets.
Non-residents pay only on Spanish-situated assets, such as a Valencia apartment or a Spanish brokerage account. This single distinction is why your residency status and your region both matter so much.
State framework vs the Comunitat Valenciana
The state sets a default framework, but because wealth tax is regionally-ceded, each autonomous community can set its own exemption and rates. The Comunitat Valenciana raised its personal exemption twice (Ley 5/2025, then Ley 5/2026) and now applies a HIGHER personal exemption than the state default, though real wealth tax still applies above that threshold.
Madrid, by contrast, has suspended its 100% rebate while the state Solidarity Tax is in force: its rebate now only removes the part of the wealth tax above the Solidarity Tax amount. Residents below about €3.7M of net wealth still pay nothing, and those above it pay Madrid the equivalent of the Solidarity Tax.
| What applies | State default | Comunitat Valenciana | Madrid |
|---|---|---|---|
| Personal exemption | €700,000 per person | €2,000,000 per person | In practice, no tax below about €3.7M of net wealth |
| Main-home allowance | Up to €300,000 | Up to €300,000 | Up to €300,000 |
| Rate range | ~0.2% to 3.5% | Own scale, top rate 3.5% | Solidarity Tax rates (1.7% to 3.5%) above about €3.7M |
If you are a high-net-worth relocator choosing where to settle, this is the line that matters: with net wealth between Valencia's €2M exemption and about €3.7M, a Comunitat Valenciana resident owes real wealth tax while a Madrid resident owes nothing. Above that, the gap narrows, because Madrid collects the Solidarity Tax amount and the Solidarity Tax credits the regional tax paid in Valencia. We flag this clearly before any region decision.
The Solidarity Tax (ITSGF) and how it interacts
On top of the regional wealth tax, Spain runs a STATE tax called the Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF), or Solidarity Tax. It applies to net wealth above €3,000,000.
After its own €700,000 exemption, the tax starts at about €3.7M of net wealth, or about €4M if you own an exempt main home. Rates run 1.7%, 2.1% and 3.5% by band. It was introduced for 2022 and 2023 and has been extended until the reform of regional financing revisits wealth taxation.
The key mechanic is the credit: the Solidarity Tax credits any regional wealth tax you have already paid. In the Comunitat Valenciana, where regional wealth tax IS levied, it therefore usually adds little or nothing on top, because your regional bill already absorbs most of it. Madrid, which has suspended its 100% rebate while this tax exists, now collects the equivalent through its own wealth tax, so the credit cancels the state tax there.
How the Beckham Law changes the picture
This matters most for US and other high-net-worth expats. Taxpayers under the Beckham regime are taxed for wealth tax like non-residents, meaning only on Spanish-situated assets, not on worldwide net worth. Your overseas brokerage, foreign property and offshore holdings stay out of scope while you are under Beckham.
For an asset-heavy mover, that can be the difference between a meaningful annual wealth-tax bill and almost none. See real worked examples comparing Beckham to progressive IRPF for the exact numbers.
Filing: Modelo 714, deadline and valuation basics
Wealth tax is self-assessed on Modelo 714, filed alongside your income tax return by 30 June (25 June if you pay by direct debit), in a window set each year by ministerial order. You value assets at 31 December: real estate at the highest of cadastral, purchase or AEAT-checked value, and bank balances at the higher of year-end or average Q4 balance.
Listed shares, including those held in a French PEA or securities account, count at their average trading value over the fourth quarter, not the 31 December price. A life-insurance policy, French or Luxembourg, counts at its surrender value. Shares in a family business you actively run can be exempt, but not those of a company that mainly holds investments or property.
Even if your net worth sits below the filing threshold, you may still have to file if your gross assets exceed €2,000,000. When in doubt, file. A missed Modelo 714 carries penalties, and it interacts with your Modelo 720 foreign-asset reporting.
More on Spanish wealth tax
Wealth tax rarely sits alone in a relocation plan. The Golden Visa route was abolished by Organic Law 1/2025 on 3 April 2025, so it is no longer a way in. These are the pages most of our HNW clients read next:
Wealth Tax FAQ
Do I pay wealth tax in Valencia if I am a tax resident?
If you are a Spanish tax resident in the Comunitat Valenciana, you are taxed on your worldwide net assets above the regional personal exemption, raised to 2,000,000 EUR by Ley 5/2026 (verified August 2026), plus a main-home allowance of up to 300,000 EUR. Valencia uses its own scale topping out at 3.5%.
Net worth below the exemption means no wealth tax, but you may still need to file Modelo 714 if your gross assets exceed 2,000,000 EUR. Confirm current thresholds with a qualified adviser.
How does Valencia's wealth tax compare with Madrid's?
Wealth tax is a regionally-ceded tax, so each autonomous community sets its own exemption and rates. The Comunitat Valenciana applies its own scale, topping out at 3.5%, above a personal exemption that regional law raised to 2,000,000 EUR in 2026 (versus the 700,000 EUR state default). Madrid has suspended its 100% rebate while the state Solidarity Tax is in force: residents below about 3.7M EUR of net wealth still pay nothing, and those above it pay the Solidarity Tax amount through Madrid's wealth tax.
So between Valencia's exemption and about 3.7M EUR, a Valencia resident owes real wealth tax while a Madrid resident owes nothing. Above that, the gap narrows, which matters for high-net-worth movers choosing a region.
What is the Solidarity Tax and will I pay it in Valencia?
The Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF), or Solidarity Tax, is a state tax on net wealth above 3,000,000 EUR. After its own 700,000 EUR exemption, the tax starts at about 3.7M EUR of net wealth, or about 4M EUR with an exempt main home. Rates run 1.7%, 2.1% and 3.5% by band.
Crucially, it credits any regional wealth tax you have already paid, so in Valencia, where regional wealth tax is already levied, it usually adds little or nothing on top. Madrid now collects the same amount through its own wealth tax, so its residents above the threshold pay it there instead.
Does the Beckham Law reduce my wealth tax?
Yes. Taxpayers under the Beckham regime are treated as non-residents for wealth tax, which means you are taxed only on Spanish-situated assets, not on your worldwide net worth. Your foreign brokerage, overseas property and offshore holdings stay out of scope while you are under Beckham.
For an asset-heavy expat, especially from the US, this can be the difference between a meaningful annual wealth-tax bill and almost none. The Beckham election is filed separately on Modelo 149.
When and how do I file wealth tax in Spain?
Wealth tax is self-assessed on Modelo 714, filed alongside your income tax return (Modelo 100) by 30 June (25 June if you pay by direct debit), in a window set each year by ministerial order. You value your assets as at 31 December: real estate at the highest of cadastral, purchase or tax-checked value, listed shares at their average fourth-quarter trading value, life insurance at its surrender value and bank balances at the higher of the year-end or average fourth-quarter balance.
Even below the taxable threshold you may need to file if gross assets exceed 2,000,000 EUR. When in doubt, file.
Official sources
- Ley 19/1991, Wealth Tax Act (BOE)
- Ley 13/1997, Valencian wealth-tax exemption and scale (BOE, consolidated text)
- Ley 38/2022, Solidarity Tax (BOE)
- Ley 12/2023, Madrid wealth-tax rebate while the Solidarity Tax applies (BOE)
- Orden HAC/277/2026, 2025 filing window (BOE)
- Agencia Tributaria: wealth-tax filing deadline