Solicitor Valencia

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THE SPANISH WEALTH TAX HAS BEEN ABOLISHED

In the electoral campaign of April 2008, the Socialist party announced that the Wealth Tax would be abolished. After the elections, the new finance minister formally declared in the media that the year 2008 will be the last time in the history of Spain that the Wealth Tax is paid.

On the 23rd of December 2008 the law to abolish the Wealth Tax was approved. Therefore, in 2009 neither residents or non residents will have to pay the Wealth Tax.

Non resident owners of a property in Spain will now only pay two taxes instead of the three previous taxes, these two taxes are:

- The Local Rates Tax paid to the Town Hall will continue to be paid.

- The presumed income of the property paid to the Spanish Tax Department (in most cases 0,198% of the value of the property) is also to be paid.

The largest part of the taxation charge was the Wealth Tax and the abolishment of this tax means a considerable saving for many people.

In addition, the Wealth Tax was considered an important obstacle for many people who wished to be residents in Spain. With the abolishment of the Wealth Tax it will result more tax efficient for many non residents in Spain to become residents and consequently pay their taxes as residents.