Blogging from the Murcia region of Spain until early June, when I return to
the Highlands of Scotland for a few months

'Fair and softly goes far' - Miguel de Cervantes

Thursday, 22 May 2008

Spanish wealth tax abolished effective 2009

Spanish 'Wealth Tax' has been abolished with effect from 1 January 2008. As this tax was levied based on assets held on 31 December of a given year, the tax for 2007 will therefore be payable as usual during 2008. However no wealth tax will be payablle for 2008 itself during 2009. (There's another useful link here.)

The tax treatment for residents and non-residents is different. Residents pay this tax on their worldwide assets, less various exemptions. Non-residents pay the tax only on assets held in Spain, but there are no exemptions.

Undoubtedly the move, announced after the re-election of the Spanish PSOE government, is designed to mitigate the damage to the Spanish housing market and construction industry in the wake of the current economic downturn (aka 'credit crunch'); it may also encourage some people to re-locate to Spain if 18 per cent income tax is the only tax they will have to pay.

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