May.05 2024

Temporary solidarity tax on large fortunes (ITSGF)

Many non-resident owners of real estate property in Spain are worried about the implementation of this new tax which is supposed to be a temporary one and addressed to large fortunes.

Even though this tax has been very recently approved, in this article we may be able to provide a brief overview of its configuration.


What is the temporary solidarity tax on large fortunes?

Actually, the ITSGF is a direct tax that supplements the Property Tax and levies on the properties of a legal person which are superior to €3.000,000.00.

However, many taxpayers might think it is a copy of the Wealth Tax, not only because of its legal base or ground, but because it is related in many cases to the actual Wealth Tax Act (such as taxable persons, territorial scope, exemptions, taxable and payable bases, etc.). The difference is that the payment made in concept of Wealth Tax may be deduced.

How will non-residents pay their tax?

They will pay according to the wealth and rights they have in Spain, which is defined by law as real taxation statement.

It must be pointed out that there is a substantial difference between a resident and a non-resident. Non-residents do not have the €700,000.00 exemption that residents do, which is applicable to both residents and non-residents in the Property Tax, meaning an important difference between both linked taxes.

Which taxation rates will apply?

The taxation rates will be seen as follows:

  • From €0 to €3.000,000.00: 0%.
  • From €3.000,001.00 to €5.347,998.03: 1.7%.
  • From €5.347,998.04 to €10.695,996.06: 2.1%.
  • From €10.695,996.06 onwards: 3.5%.

This tax being so recent, we hope to be able to provide further information in a near future. However, it is important to keep in mind the existence of this tax when the moment comes to purchase your property in Spain and take the necessary steps accordingly.

Lastly, please remember that the objective of this article is to provide you with practical information to understand the way this tax system works, but it does not replace a customized legal or tax advice, and therefore our office shall not accept any liability in this regard. Should you wish to have customized information please click here to ask for an appointment:  E-porcel.