The Spanish wealth tax sounds more dramatic than it turns out to be for most residents. What matters are the allowances, the valuation of your properties, and the interaction with the solidarity levy ISGF. This article takes the Mallorca case concretely in hand, explains the Balearic specifics, and shows how to bring your assets through the 2026 Renta process cleanly.
Wealth Tax in Spain
The Impuesto sobre el Patrimonio is an annual tax on net assets. It has existed since 1991, was effectively abolished in 2008, reintroduced in 2011, and has applied every year since. Administration rests with the autonomous communities, which may set their own allowances and rates.
An important distinction:
- Resident: you live more than 183 days per year in Spain. Your worldwide assets count.
- Non-resident: you hold assets in Spain but your main residence is elsewhere. Only Spanish assets count.
The reference date is 31 December of the relevant year. Whatever you hold on that date is valued and used as the tax base. For your first year as a resident, tax advisers frequently run a trial calculation to avoid surprises.
Tip
Valuation rules in Spain are often more favourable than expected. Properties are assessed at the highest of the purchase price, the cadastral value, and the official tax reference value, which is usually well below the real market value. Opportunities for savings lie mainly in clean documentation, not in tricks.
Allowances and Calculation
For residents in 2026 the basic structure is as follows:
- 700,000 euros general allowance per person
- 300,000 euros additional allowance for the main residence per owner
- Couples can add their allowances if both are residents
This means a married resident couple with their own home on Mallorca has up to 2 million euros of assets exempt in principle (700,000 each plus 300,000 each for their half of the property, provided it is owned 50/50).
The tax is progressive. At national level it ranges from 0.2 percent to 3.5 percent. The Balearic Islands have their own scale, which starts at a similar level but can end higher for large fortunes.
| Net assets (euros) | National rate | Note |
|---|---|---|
| Up to 167,129 | 0.2 percent | Entry rate |
| Up to 334,253 | 0.3 percent | |
| Up to 668,500 | 0.5 percent | |
| Up to 1,337,000 | 0.9 percent | |
| Up to 2,673,999 | 1.3 percent | |
| Up to 5,347,998 | 1.7 percent | |
| Up to 10,695,996 | 2.1 percent | |
| Above 10,695,996 | 3.5 percent | Top rate |
The Balearic Islands deviate here. In 2026 the top rate under the Balearic scale is around 3.45 percent, applying at high single-digit millions. The national rate is only used when a region has not passed its own scale.
Balearic Island Specifics
The Balearic Islands are active on tax policy. Key points for 2026:
- Their own progressive scale with slightly different brackets from the national model.
- Additional allowances for people with disabilities and for certain cultural assets.
- The temporary full abolition of the wealth tax has been reversed. Assessment has resumed since 2022.
- Listed buildings and certain agricultural and forestry land benefit from special rules.
Non-residents who own only one property on the island are subject to the national rules. The Impuesto sobre el Patrimonio affects them too once the property value exceeds 700,000 euros, and since 2024 non-residents can generally choose between the national and the Balearic rate. A quick check with a Gestoría can quickly save four-figure sums here.
Many buyers also underestimate the valuation trap: if you declare a higher purchase price on your deed to pay more AJD (stamp duty), the Patrimonio value for the coming years will be correspondingly higher. Conversely, an undervalued price invites questions from the ATIB.
Solidarity Levy ISGF
The Impuesto Temporal de Solidaridad sobre las Grandes Fortunas was introduced in 2023. It is a time-limited national tax that is being extended indefinitely. It is explicitly aimed at regions that previously offered high exemptions, such as Andalusia and Madrid.
Key facts:
- Allowance of 3 million euros per person (plus 700,000 euros deducted at the base level).
- Rates of 1.7 percent, 2.1 percent, and 3.5 percent for tiers above 5.3 million and 10.7 million euros respectively.
- Regional wealth tax already paid is credited against the ISGF.
- Filed via Modelo 718, deadline July.
For Balearic residents the ISGF generally only applies if worldwide net assets exceed around 3.7 million euros. Below that threshold you only pay the standard wealth tax, if at all. For non-residents without a domicile in Spain only the property on Mallorca counts, not global wealth, so the ISGF very rarely applies to them.
Warning
The ISGF and Patrimonio are not the same thing, even though they work similarly. Anyone who does not document the credit properly can easily end up paying twice. Make sure your Gestoría plans both forms together.
Filing and Deadlines
The wealth tax (Modelo 714) is usually filed together with the income tax return (Modelo 100) between April and the end of June. Deadlines for 2026:
- Start of the filing period: 3 April 2026
- End of filing with direct debit: 26 June 2026
- End of filing without direct debit: 1 July 2026
- Deadline for ISGF (Modelo 718): July 2026
For a clean filing you need:
- Bank and investment portfolio balances as at 31 December
- Purchase prices and cadastral values for all properties including ancillary costs
- Vehicle values according to the official table
- Life insurance policies at surrender value
- Shareholdings in companies with proportional equity
If you have a very straightforward asset situation (only a bank account and a simple apartment), you can fill in Modelo 714 yourself. For all cross-border cases, business assets, or shareholdings it is worth getting advice from a lawyer or tax adviser. The service directory lists several German-speaking Gestorías that regularly handle Patrimonio filings.
Strategies
Optimising taxes in Spain is less rocket science and more homework. What works in practice:
- Document cleanly. Record every change to your assets (sale, purchase, gift) in your annual folder. The tax office loves evidence.
- Spread allowances across a couple. Joint ownership can unlock double allowances, provided both spouses are residents.
- Define your main residence clearly. The 300,000 euro allowance applies only to the main residence, evidenced by your empadronamiento certificate and utility bills.
- Check business assets. Shareholdings in companies can under certain conditions be 95 percent exempt.
- Keep the property valuation realistic. No artificial inflation of the purchase price, and no under-the-table deals.
- Meet deadlines. Late Modelo 714 filings quickly attract fines.
Particularly for new residents, a one-off strategy session with a Gestoría and a lawyer before the first full tax year makes sense. The investment of two to three hours almost always pays off because it prevents valuation errors and incorrect classifications. Anyone arriving with larger assets should also read Exit Taxation and the Double Taxation Agreement Germany-Spain before the first deadlines arrive.