Andalucía has long been Spain’s most tax-friendly autonomous community for high-wealth foreign residents and owners. The 100% bonification on the regional Wealth Tax is a headline reason many UK, German, French and US residents choose Marbella over Mallorca, Madrid or the Costa Brava. But the picture in 2026 is more nuanced than “no wealth tax in Andalucía”. The national Solidarity Tax (ITSGF) — originally framed as temporary — has been extended and likely made permanent, putting a floor under the regional bonification for net wealth above €3M. This is the 2026 working guide for foreign Andalucía residents and non-residents owning Spanish assets.
The two layers — regional vs national
Wealth tax in Spain has a two-layer architecture in 2026:
| Layer | Who sets the rate | Andalucía treatment |
|---|---|---|
| Regional Wealth Tax (Impuesto sobre el Patrimonio) | Autonomous community sets brackets and bonifications | 100% bonification — practical liability €0 |
| National Solidarity Tax (ITSGF) | Central government (Madrid) sets brackets and minimums | Applied in full — regional bonification doesn’t shield from it |
Pre-2022, only the regional layer existed. The Andalucía bonification meant zero wealth tax, full stop. Madrid Community had the same structure. Spain’s central government, irritated that the wealthiest taxpayers were paying nothing, introduced ITSGF in late 2022 as a “temporary solidarity contribution” — a national tax overlay that the autonomous communities can’t bonify away.
Originally set to expire end-2024, ITSGF was extended in late 2024 and is now expected to be permanent. The political consensus that it’s here to stay has shifted wealth-planning priorities: the Andalucía bonification is now most useful for owners with net wealth between €700K and €3M; above €3M, ITSGF dominates the planning question.
ITSGF — what it actually costs
The ITSGF brackets for 2026 (unchanged from 2024):
| Net wealth tranche | ITSGF rate |
|---|---|
| Up to €3,000,000 | 0% |
| €3,000,001 to €5,347,998 | 1.7% |
| €5,347,999 to €10,695,996 | 2.1% |
| Above €10,695,996 | 3.5% |
Same €700K personal allowance, but the main-home allowance is restricted (only €300K, residents only).
A worked example. UK pensioner resident in Marbella, total worldwide net wealth €4.5M (Spanish villa €1.8M, UK investments €2.5M, cash €200K).
- €700K personal allowance → taxable wealth €3.8M
- €300K main-home (Marbella villa) → taxable wealth €3.5M
- ITSGF: 0% on first €3M = €0; 1.7% on €0.5M = €8,500
- Regional Wealth Tax (Andalucía): would be ~€80K → bonified 100% → €0
- Total wealth tax 2026: €8,500
If the same person were resident in Catalonia (which has no bonification), they’d pay roughly €80K in regional wealth tax. Andalucía wins by €71,500.
If the same person had €15M instead of €4.5M:
- ITSGF: 0% on €3M + 1.7% on €2.347M + 2.1% on €5.348M + 3.5% on €3.305M = ~€266K
- Regional Wealth Tax (would be) ~€350K → bonified 100% → €0
- Total wealth tax 2026: ~€266K
The bonification removed €350K but ITSGF charged back €266K. Net benefit shrank dramatically.
Non-residents — the EU/EEA election
Pre-2023, non-residents owning Spanish wealth-tax-able assets paid only the state-level tax — they couldn’t access regional bonifications. The Constitutional Court ruled this discriminatory in 2022, and Law 38/2022 fixed it: EU/EEA residents who own Spanish assets can elect to apply the autonomous community’s rules.
In Andalucía’s case, the election means the 100% bonification applies — regional liability €0. ITSGF still applies on Spanish-located wealth above €3M (with €700K allowance, no main-home shelter for non-residents).
UK residents post-Brexit are NOT in the EU/EEA election. UK non-resident owners pay state-level Spanish wealth tax with no bonification, plus ITSGF — a noticeable post-Brexit cost we covered in our UK Owners Selling Spanish Property guide. For UK retirees with €5M+ net worth, this can mean €40-80K/year in additional Spanish wealth tax that an equivalent French neighbour avoids.
How assets are valued
The valuation rules are technical but consequential. For each asset class:
| Asset | Valuation rule |
|---|---|
| Spanish real estate | Highest of: cadastral value, ITP value at purchase, last declared value (e.g. inheritance), or valor de referencia (post-2022 purchases) |
| Foreign real estate | Higher of acquisition cost or current market value (for residents — no foreign-property shelter) |
| Listed shares | Closing price on 31 December of tax year |
| Unlisted shares | Generally net asset value (or higher if recent transactions support it) |
| Cash and deposits | Balance on 31 December |
| Insurance contracts | Surrender value on 31 December |
| Rights in usufruct or bare ownership | Discounted by life-expectancy tables |
| Vehicles, art, jewelry | Market value (subject to inspection) |
Liens reduce the gross value: mortgages, secured loans, registered charges. An unencumbered €2M villa adds €2M to wealth; the same villa with a €700K mortgage adds €1.3M.
Exempt asset categories
Some asset categories are fully exempt from wealth tax (and from ITSGF):
- Business assets in active business activity, owned by an individual (sole trader / autónomo) where the business is the owner’s main activity and source of income. Strict tests apply.
- Family-business shares in a company where: at least 5% is held individually (or 20% with family group), the holder or family member exercises management functions, and management remuneration exceeds 50% of personal income from work and business.
- Pension rights — Spanish PPI (planes de pensiones), occupational pensions, social-security pension rights.
- Intellectual property kept in the author’s patrimony.
- Cultural goods declared of cultural interest.
The family-business exemption is the most powerful planning lever for HNW Andalucía residents. Restructuring assets through a Spanish family-business holding company that meets the active-management and main-income tests can move significant net wealth out of the wealth-tax base. It’s a structure we work on extensively for €10M+ net-worth clients — but it requires real economic substance (genuine business activity, real management roles), not paper reorganisation.
Modelo 714 — the filing
Wealth tax is filed on Modelo 714 alongside the annual income tax return, between 4 May and 30 June for the prior calendar year. Filing thresholds:
- Net wealth above €700K (above €1M for non-residents pre-Law-38/2022 — now aligned)
- Total assets value above €2M (regardless of net wealth — important if you’re heavily mortgaged)
Either trigger requires filing. The €700K is per person (married couples can each have €700K, so a couple has €1.4M combined personal allowance).
ITSGF is filed on Modelo 718 in the same window. If you owe ITSGF, you must file Modelo 714 too even if regional Wealth Tax is bonified to zero.
Late filing triggers:
- 5–20% surcharges (depending on lateness)
- Interest at the legal rate
- Estimated tax liability assumed by AEAT if you don’t file
For non-residents with Spanish-only wealth, the filing is via your Spanish lawyer or gestor. Many non-residents discover at sale or inheritance time that they should have been filing for years — the AEAT then claims back-taxes plus penalties. The 4-year statute of limitations applies, so worst case is 4 years’ back-filing.
Strategic levers — what actually moves the bill
For HNW residents and non-residents owning Spanish wealth, the levers in order of typical impact:
1. Mortgaging the Spanish property
The Spanish property is the wealth-tax-attracting asset. A €1.5M unmortgaged villa = €1.5M of taxable wealth. The same villa with a €1M mortgage = €500K. Spanish mortgage rates for non-residents in 2026 are ~3.8–5.0% — sometimes the carrying cost of the mortgage is offset by the wealth-tax savings, especially for €5M+ owners.
2. Family-business holding company
For owners with significant Spanish-located business assets, restructuring through a qualifying empresa familiar removes those assets from the wealth-tax base entirely. Material benefit for owners with €5M+ wealth where the wealth is partly business-related.
3. Andalucía 99% donation regime — lifetime gifts to children
Andalucía’s 99% bonification on Donations Tax (Decreto-Ley 7/2022) means lifetime gifts from parents to children pay roughly 1% donation tax on gifts to close family. Combined with the gradual transfer of wealth out of the parent’s name, this can reduce the wealth-tax base over years. CGT on the gift (deemed disposal at market value) is the cost — the trade-off needs modelling.
4. Andalucía vs other regions
For €3M+ net worth, the Andalucía bonification still beats most regions but the gap has narrowed. Madrid’s bonification + lower personal-income-tax brackets is a closer competitor. For some profiles, Portugal’s NHR (Non-Habitual Resident, now ending) or Italy’s flat-tax offer better outcomes — though both are politically uncertain.
5. Pension/insurance wrapper structures
Wrapping liquid wealth into Spanish-recognised pension or insurance products defers or eliminates wealth-tax inclusion for some asset classes. Limited room for the very wealthy but useful at the margin.
Common wealth-tax pitfalls
- Believing ‘Andalucía has no wealth tax’ — true for most profiles, but ITSGF kicks in above €3M and the messaging hasn’t caught up
- Non-residents not filing because no tax due — the €700K threshold triggers filing even at €0 tax
- Cadastral undervaluation assumed — the AEAT cross-checks against valor de referencia and ITP-paid value; the highest wins
- Mortgages on foreign property used to reduce Spanish wealth tax — only mortgages directly secured against the Spanish asset reduce its taxable base
- Family-business exemption claimed without active-management evidence — the AEAT challenges these every year, and challenges that lose mean back-tax for 4 prior years
Related articles
- Andalucía Inheritance Tax — 99% Bonification Explained
- Spain Property Taxes for Foreign Owners
- Capital Gains Tax — Non-Resident Property Sale
- Modelo 720 — Foreign Asset Reporting
- UK Owners Selling Spanish Property — Post-Brexit CGT
- Spain Beckham Law — Tax Optimization
If you’re considering Andalucía residency, owning Spanish property as a non-resident with €700K+ Spanish-located wealth, or restructuring an existing wealth position around the Andalucía 100% bonification + ITSGF reality, book a free consultation. The wealth-tax architecture in 2026 rewards modelling the full picture — regional + national + interaction with CGT and inheritance — rather than any single rule.
