Spanish wealth tax (Modelo 714) for non-residents: who is concerned

Every so often, a newspaper article about Spain's wealth tax worries owners of holiday flats. For the vast majority of them, the worry is unfounded: the tax only reaches non-residents whose assets located in Spain exceed a substantial allowance. But owners of large villas, several properties or significant Spanish savings should know how it works, because, unlike Modelo 210, nobody will remind them.

This guide gives the outline. It is deliberately cautious: the wealth tax combines State rules, regional variations and a newer solidarity levy, and anyone close to the thresholds should take advice on their own figures.

Two taxes on net wealth

Tax	Form	Who, for non-residents	Threshold
Impuesto sobre el Patrimonio (wealth tax)	Modelo 714	Non-residents with assets located in Spain	Allowance of €700,000
Impuesto temporal de solidaridad de las grandes fortunas (temporary solidarity tax)	Separate return	Non-residents with large Spanish wealth	Applies above €3 million

Both are personal and annual. Both look at the situation on a fixed date each year rather than at income.

Who is concerned as a non-resident

A non-resident is taxed only on the assets and rights located in Spain or exercisable there. For a typical foreign owner, that means mainly:

• the Spanish home or homes, valued under the rules specific to this tax;
• money held in Spanish bank accounts;
• other Spanish assets, such as shares in Spanish companies.

Assets held in your country of residence are not included. A British owner with a large pension and a house in Surrey, but only a modest flat in Spain, is assessed on the flat alone.

The allowance works per person

The €700,000 allowance applies to each taxpayer. A couple who own a villa in equal shares are two taxpayers, each with their own half. A property worth €1.2 million for wealth-tax purposes, owned 50/50, gives each spouse €600,000 of Spanish assets: below the allowance. The same property owned by one person alone would exceed it.

That is one reason why the way a property is held matters, and why changing it should never be decided for this tax alone.

How property is valued

The wealth tax does not simply use the cadastral value that drives Modelo 210. Property is valued under specific rules that look at several figures, including the cadastral value and the price paid, and generally retain the higher. For an owner who bought recently at market price, the purchase price is therefore often the relevant figure, not the much lower cadastral value. Ask an adviser to establish the right value for your case.

Regional rules and the solidarity tax

Wealth tax is a State tax whose management and many reliefs have been passed to the autonomous communities. Some regions apply it in full, others offer large reductions. How these regional rules apply to a non-resident depends on where the assets are located and on the rules in force for the year; this is exactly the kind of question to put to a specialist.

The temporary solidarity tax was introduced to catch large fortunes in regions where wealth tax had been reduced. It applies above €3 million of net wealth and is coordinated with the regional wealth tax so that the same wealth is not taxed twice in full. Its continuation is reviewed periodically, so check its current status.

Does it change my Modelo 210?

No. Modelo 210 is an income tax, due every year on the imputed income of a home you do not let, or on the rent of a home you let, whatever your wealth. The wealth tax is a separate, additional obligation that only some owners have. Paying one does not discharge the other. The complete Modelo 210 guide explains the income tax side.

A quick self-check

1. List your assets located in Spain: property, Spanish bank balances, Spanish investments.
2. For each property, note your ownership share, the cadastral value and the purchase price.
3. Estimate your share of the total, using the higher of the property values as a first approximation.
4. If your share is clearly below €700,000, the wealth tax is very unlikely to concern you.
5. If it is close to or above that figure, or if you hold property through a company, consult an adviser before the next filing campaign.

Common misunderstandings

• "Owning property in Spain means paying wealth tax." No. Most holiday-home owners are far below the allowance.
• "The cadastral value is used." Not necessarily; a higher value can apply.
• "My spouse and I share one allowance." No. Each owner has their own.
• "My home country's wealth tax replaces the Spanish one." Not automatically. Treaties and home-country rules must be checked.

FAQ

I own a flat worth €250,000 in Spain. Do I need to worry about Modelo 714?

Very unlikely. With assets in Spain well below the €700,000 allowance, a non-resident would normally have nothing to pay. Your obligation remains the yearly Modelo 210.

Does my home country's wealth tax count?

It may interact with the Spanish tax through a treaty or through credits in your country. Ask in both countries, as the rules differ widely.

Can a mortgage reduce the amount?

Debts can affect net wealth under conditions. This is a technical point to check with an adviser, using the figures for the relevant year.

Who files Modelo 714 for a non-resident?

The taxpayer, often through an adviser or a representative in Spain. Given the stakes, it is rarely a return to prepare alone. Our page on choosing a gestor or an online service helps compare options.