IP definition
Impuesto sobre el Patrimonio is an annual, direct and progressive tax on individuals (residents and non-residents) who hold assets in Spain on December 31 of each year. If you have substantial assets in Spain, you may be affected.
Who should declare the IP?
- Spanish tax residents are taxed on their worldwide wealth, i.e. the assets they own in Spain and in other countries.
- Non-residents are taxed only on the assets they own on Spanish soil.
What are the tax thresholds?
The PI is governed by theWealth Tax Act and is calculated on the value of the assets and rights you own, minus your debts. Not everyone pays it, as it only applies to those whose assets exceed a minimum exemption amount, which varies from one Autonomous Community to another.
- General national allowance: you are not taxed below €700,000 (net worth). 500,000 in Catalonia.
- Spanish tax residents can benefit from an exemption on their main residence (max €300,000).
As always in Spain, taxation varies greatly from one autonomous community to another. We advise you to consult a tax expert for a precise analysis of your situation.
Which assets are concerned?
- Real estate (residential and rental properties, garages, premises, land, second homes)
- Bank accounts and deposits (the higher of the balance at December 31 and the average balance for the last quarter)
- Shares in listed or unlisted companies
- Intellectual property rights
- Works of art, jewelry and antiques
- Life insurance policies with cash surrender value
- Vehicles, boats, etc.
Outstanding debts relating to these assets are deductible.
If the total value of these assets exceeds the minimum exemption set by your Autonomous Community, you will have to pay tax in accordance with its regulations.
Assets held by companies such as SLs are excluded from the partner's personal assets. See our full article on SLs and our fact sheet on how to set up an SL (to be linked when published).
National scale
TheImpuesto sobre el Patrimonio tax scale is progressive: the more you earn, the more you pay.
- Net assets = Total assets and rights - Payables and deductible expenses.
- Minimum exemption: most communities set the threshold at €700,000, but as we have said, there are exceptions.
- Graduated scale: ranging from 0.2% to 3.5%, depending on the total amount of assets.
| Assets (taxable base after allowance) | Rate applied |
| Between €0 and €1,67129 | 0,2% |
| From €1,67129 to €334,252 | 0,3% |
| From €334,252 to €668,499 | 0,5% |
| From € 668,499 to € 1,336,999 | 0,9 |
| From €1,336,999 to €2,673,999 | 1,3 |
| From €2,673,999 to €5,347,998 | 1,7 |
| From €5,347,998 to €10,695,996 | 2,1 |
| Beyond | 3,5 |
Impuesto sobre el patrimonio: special regimes
| Autonomous Community | Exemption threshold (2025) |
| Madrid | Total exemption |
| Andalusia | Total exemption (since 2023) |
| Catalonia | Exemption under €500,000 |
| Valencian Community | Resident threshold raised to 1 million (2025) |
| Balearic Islands | Resident threshold raised to 3 million (2024) |
A concrete example
For an owner whose tax residence is in the Valencian Community and whose gross asset value is €1,650,000
Calculation of net asset value
Principal residence: €600,000
- Second home: €800,000
- Bank account: €100,000
- Works of art: €120,000
- Car: €30,000
= Gross total: €1,650,000
- Deductible debts (remaining mortgage on second home) €200,000
= 1 450 000 €
Exemptions in force in 2025
- Exemption on principal residence: €300,000
- Valencian Community allowance for residents: €1,000,000
Net taxable assets
1 450 000 €
- 300,000 € (RP)
= 1 150 000 €
1 150 000 €
- 1,000,000 (regional allowance)
= €150,000 taxable
Application of the scale
Since the tax base is €150,000, only the first bracket is affected:
Bracket 0-167,129 € → 0.2% rate
Tax due = 150,000 × 0.2% = €300
💡 Terreta's tip: you can use this simulator provided by the tax authorities to get a clearer picture of your situation.
Legend: IP simulator
Source: Agencia Tributaria
Solidarity tax on large fortunes (ITSGF)
In 2023, Spain introduced a solidarity tax on large fortunes. Initially temporary, it was extended indefinitely to 2025.
It supplements the PI and is applicable throughout the country, even in communities that are exempt from PI.
- It applies to net assets in excess of 3,700,000 euros (3M threshold + the 700,000 of the PI).
- The scale is progressive.
| Heritage | Rate applied |
| From €3M to €5.35M | 1,7% |
| From €5.35 M to €10.7 M | 2,1% |
| Beyond | 3,5% |
Declaration procedure
ATTENTION
If your assets exceed 2 million euros, you are obliged to declare them, even if your autonomous community grants exemptions: the tax authorities require you to declare your assets.
The IP declaration is made online, at the same time as the Renta (tax return) declaration, via the dedicated Renta web page.
As a general rule, it must be completed between April and June of each year.
- In concrete terms, you need to fill in form 714 , available online on the Agencia Tributaria website, along with your cl@ve number and your certificado digital.
- Don't forget to deduct your debts (outstanding mortgages).
Sample form 714
Advice from Terreta Spain's experts to optimize your IP
- Check your PI base before investing in Spain.
- Consider setting up an SL if your assets justify it.
- Check the regional regulations governing the properties you are considering before investing.
- Consult a tax expert to simulate the tax impact of your investments.
Delaguia Luzon can help. Contact them here. Our lawyers speak French and English and specialize in international matters.
