The new Solidarity Tax (Impuesto Temporal de Solidaridad de las Grandes Fortunas) will operate as an additional wealth tax for individuals whose taxable wealth exceeds ?3m.

Spain already has a wealth tax (Impuesto sobre el Patrimonio) which is fully devolved to the 17 Autonomous Regions (Comunidades Autónomas) of Spain, with each Region having the authority to set their own wealth tax rates, allowances and reductions.

Madrid applies a 100% tax credit for wealth tax purposes, meaning that wealth tax has effectively been abolished in that Region. Andalucía recently announced that it will follow in the footsteps of Madrid and eliminate wealth tax with effect from 31st December 2022. Murcia has also declared it is considering doing the same, and Galicia has increased the wealth tax credit from 25% to 50%.

The new Solidarity Tax will be a national tax governed by the central Government; it will therefore not be ceded to the Autonomous Regions. This will prevent the Autonomous Communities from modifying the tax rates or introducing additional allowances and tax credits. One of the principal aims of the new Solidarity Tax is to harmonise the rules across the Autonomous Communities in relation to the taxation of wealth.

In many Autonomous Communities where wealth tax still applies (and where the wealth tax rates are the same as the Solidarity Tax rates), the Solidarity Tax will not create an additional tax burden on individuals who live there, as any wealth tax liability can be credited against the Solidarity Tax.

It will mainly affect individuals who live in the Autonomous Communities of Madrid and Andalucía, where a 100% wealth tax credit applies, effectively reducing wealth tax to zero in those Regions.

However, it will also affect individuals resident in Regions which have marginal rates of wealth tax that are lower than the rates of Solidarity Tax or where the top rate of wealth tax is lower than the 3.5% top rate tax of Solidarity Tax (such as in Asturias, the Balearics, Cantabria, Cataluña and Murcia). Individuals with high levels of wealth who are resident in those Regions could end up paying an additional amount of Solidarity Tax over and above the wealth tax they currently pay.

Main highlights

  • The new Solidarity Tax is intended to be a temporary tax that will apply for two tax years.
  • It will only affect individuals whose taxable wealth exceeds ?3m.
  • The tax will be assessed at 31st December each year.
  • The legislation needs to be approved by Parliament before it enters into force. If approved by 31st December 2022, it is possible that it may be introduced for 2022 and 2023. Otherwise, it will take effect from 31st December 2023.
  • Although it is intended to be a temporary tax, there is a clause which allows for the tax to be evaluated at the end of the two year period and either maintained or abolished. There is therefore a possibility that the tax may become permanent.
  • The main principles of the tax will follow that of wealth tax, for example, in terms of who is liable, the exemptions that apply and how to determine the taxable value of an asset.
  • Each individual resident in Spain will be entitled to an allowance of ?700,000, plus ?300,000 against the value of the main home, as for wealth tax.
  • The value of an individual's business will be exempt in the same conditions and with the same requirements as for wealth tax.
  • The scale rates will be as follows:

Taxable Wealth (?)

Tax Band

Tax Rate

Tax on Band

Cumulative Tax

0 - 3,000,000





3,000,000 - 5,347,998





5,347,998 - 10,695,996





Over 10,695,996


  • The combined total of an individual's income tax, wealth tax and Solidarity Tax liabilities cannot exceed 60% of the individual's taxable income, subject to paying a minimum 20% of the Solidarity Tax.
  • Where an individual is liable for both wealth tax and Solidarity Tax, the wealth tax liability will be credited against the individual's liability to Solidarity Tax for the year.
  • Overseas wealth taxes paid on the same assets are deductible against the Solidarity Tax.
  • Individuals who are not resident in an EEA country will be obliged to appoint a fiscal representative for the purposes of filing the relevant return.

Mitigating Wealth Tax and Solidarity Tax

There are various ways in which you can mitigate potential liabilities to wealth tax and Solidarity Tax, which may involve a simple restructuring of assets and income. We would recommend you seek professional advice tailored to your specific circumstances.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.