Wealth Tax in Spain: What Really Applies on Mallorca

Spain's wealth tax scares off many people before they even know whether it affects them. The good news first: most residents on Mallorca pay nothing at all because the personal allowances are high. If you own a valuable property, arrive with a sizeable investment portfolio, or hold a finca worth more than 700,000 EUR as a non-resident, though, you should know the rules. This article explains how the Impuesto sobre el Patrimonio works, what is special about the Balearics, and when the ISGF solidarity tax kicks in on top.

What Is the Impuesto sobre el Patrimonio?

The Impuesto sobre el Patrimonio is Spain's wealth tax: an annual tax on a person's net wealth as of 31 December. It applies to the value of all assets minus debts, above personal allowances. Autonomous regions like the Balearics are allowed to set their own rates and reliefs.

The legal basis is Ley 19/1991. What matters most is your tax status:

• Resident: You spend more than 183 days a year in Spain. Then your worldwide net wealth counts, including the house back home and the brokerage account at your bank abroad.
• Non-resident: You live abroad but own assets in Spain. Then only the Spanish assets count, typically the property on Mallorca.

Whether you count as a resident at all depends on more factors than just the days. Our guide to tax residency on Mallorca explains the details.

Allowances and Tax Rates in 2026

The most important fact first: the general allowance is 700,000 EUR per person, and the main home adds up to 300,000 EUR per owner on top. A married couple with a jointly owned house on Mallorca can therefore hold up to 2 million EUR of net wealth completely tax-free, because each partner uses their allowances individually.

Above the allowances the tax is progressive. The national scale starts at 0.2 percent and tops out at 3.5 percent. The Balearics have their own scale with a top rate of around 3.45 percent, which only applies to wealth in the high single-digit millions.

When calculating your net wealth, the following count, among other things:

• Real estate at the highest of purchase price, cadastral value and the value determined by the tax administration
• Bank balances and portfolio values as of 31 December
• Life insurance policies at their surrender value
• Vehicles, boats and works of art
• Shareholdings in companies, although active business assets can be largely exempt under certain conditions

You may deduct real debts, for example the mortgage on the finca. These valuation rules are exactly why the tax is often milder than feared: in practice the taxable value of a property is usually well below its market value.

Non-Residents with Property on Mallorca

Even without being resident in Spain, you are liable for wealth tax as soon as your Spanish net wealth exceeds the 700,000 EUR allowance. The additional main-home allowance does not apply to you, because your Mallorca property is not your main home.

An example: your holiday property in Santa Ponsa has a taxable value of 900,000 EUR with a mortgage of 150,000 EUR on it. Your Spanish net wealth is 750,000 EUR, so the 50,000 EUR above the allowance is taxable. The tax on that stays low, but the filing obligation exists.

Non-residents may now generally choose between the national and the Balearic scale. Which one is cheaper depends on the individual case and is quickly clarified with a gestoria. One more point worth knowing: the double taxation treaties Spain has signed with countries such as the US, the UK and Germany give Spain the right to tax real estate located here, so owning through a foreign structure does not make the Spanish filing duty go away. If you also pay wealth or property-related taxes at home, get advice covering both countries.

The ISGF Solidarity Tax: A Second Layer for Large Fortunes

Since 2023 there has also been the Impuesto de Solidaridad sobre las Grandes Fortunas (ISGF), a national tax on net wealth above 3 million EUR. It was introduced so that regions with generous reliefs cannot hollow out wealth taxation entirely.

In practice, this is what it means for you on Mallorca:

1. If your worldwide net wealth as a resident stays below roughly 3.7 million EUR (the 3 million threshold plus the 700,000 EUR general allowance), the ISGF does not affect you.
2. Above that threshold, the regional wealth tax you have already paid is credited, so you do not pay twice.
3. The ISGF return is filed separately on Modelo 718, with a deadline in July.

For non-residents the ISGF rarely matters, because only Spanish assets count and a single property seldom crosses the 3 million threshold.

Deadlines and Modelo 714

You file the wealth tax return electronically on Modelo 714 with the Agencia Tributaria, in the same window as the income tax return: in 2026 between early April and the end of June, a few days earlier if you pay by direct debit. For the Balearic specifics, the regional tax authority ATIB is the right place to ask.

Do I have to pay wealth tax as a retiree with a normal apartment on Mallorca?

In the vast majority of cases, no. With the 700,000 EUR allowance plus 300,000 EUR for the main home, an average apartment plus savings stays far below the threshold. A return is only required if tax is due or your gross assets exceed 2 million EUR.

Conclusion

For normal households on Mallorca, Spain's wealth tax is usually a non-issue: 700,000 EUR of allowance per person plus 300,000 EUR for the main home leaves plenty of room. It becomes relevant for non-residents with high-value properties and for residents with larger portfolios or several properties. Then clean valuations, choosing the cheaper scale, and the credit between Patrimonio and ISGF all matter. Ideally, clarify your situation before your first full tax year, and filing Modelo 714 becomes pure routine.