Spanish ‘Wealth Tax’ has been abolished with effect from 1 January 2008.
Since this tax was imposed, based on assets held on 31 December of a given year, the tax for 2007 will hence be payable as usual in 2008. Anyhow no wealth tax will be payable for 2008 itself during 2009.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. Without doubt the move, made known after the re-election of the Spanish PSOE administration, is intended to alleviate the damage to the Spanish construction business and housing market in the current economic decline.
Even though Wealth Tax has been abolished, the other property owners’ tax called the Attributed Income Tax, also yearly, shall remain valid. Non residents and residents alike pay 2% of the “valor catastral”, an officially rated value, of their second-home property attributed to them as a sort of made-up income. In case the property rated value has been recently raised property owners pay 1.1 percent.
Even though Wealth Tax has been abolished, the other property owners’ tax called the Attributed Income Tax, also yearly, shall remain valid. Non residents and residents alike pay 2% of the “valor catastral”, an officially rated value, of their second-home property attributed to them as a sort of made-up income. In case the property rated value has been recently raised property owners pay 1.1 percent.
