The taxation of wealth remains one of the most debated issues in European tax systems. However, the term “wealth tax” encompasses very different models.
Spain currently occupies a distinctive position. While most European countries do not apply a general and recurring tax on the net wealth of individuals, the Spanish tax system continues to include the Wealth Tax and, for certain high-net-worth individuals, complements it with the Temporary Solidarity Tax on Large Fortunes.
This situation calls for an analysis not only of how much wealth is taxed, but also of how wealth taxation is structured and which factors taxpayers with significant assets should take into account.
Spain in the European context
A comparison published in August 2026 by Tax Foundation Europe identifies Spain, Norway and Switzerland as the three European countries included in its analysis that maintain a general and recurring tax on net wealth.
This does not mean that the rest of Europe has stopped taxing wealth.
Countries such as France, Italy, Belgium and the Netherlands retain taxes affecting certain assets, investments or property, but their structure differs from a tax based on an individual’s overall net wealth.
This distinction is important because any international comparison should take the tax system as a whole into account, rather than focusing solely on the formal existence of a particular tax.
How the Spanish model works
The Wealth Tax, governed primarily by Law 19/1991 of 6 June, taxes the net wealth of individuals.
As a general rule, it is calculated by reference to the value of the taxpayer’s assets and rights of economic value, taking into account any charges, encumbrances, debts and liabilities that are deductible under the applicable legislation.
The Law also provides for a number of exemptions. These include, subject to the statutory requirements, an exemption for the taxpayer’s main residence up to a maximum amount of €300,000.
From a wealth-planning perspective, certain exemptions relating to business and professional activities and shareholdings in entities are also particularly relevant.
Specifically, the legislation provides for the possible exemption of certain assets and rights required for the carrying on of a business or professional activity, as well as certain shareholdings where the statutory requirements are met.
These exemptions, commonly associated with the concept of the family business, may have a significant impact on the wealth taxation of business owners and family groups, although their application requires careful analysis of the relevant requirements in each case.
As regards the tax-free allowance, the autonomous communities may enact their own rules. Where no specific regional legislation applies, the general State rules provide for a €700,000 reduction in the taxable base.
Accordingly, an individual’s gross wealth does not, by itself, determine their effective tax liability.
The role of the autonomous communities
One of the features that particularly distinguishes the Spanish system is the significant role played by the autonomous communities.
Wealth Tax is a devolved tax, and the autonomous communities under the common regime have certain legislative powers in relation to matters such as the tax-free allowance, the tax scale and certain deductions and allowances.
This may result in significant differences depending on the taxpayer’s tax residence.
As a practical consequence, two individuals with a similar asset composition may face different tax outcomes depending on the autonomous community whose rules apply.
For this reason, referring to a single Spanish “wealth tax rate” gives an overly simplified picture of the actual position.
The Solidarity Tax on Large Fortunes adds a second dimension
An analysis of wealth taxation in Spain can no longer be limited to Wealth Tax alone.
Law 38/2022 of 27 December introduced the Temporary Solidarity Tax on Large Fortunes (ITSGF) as a State-level, direct tax complementary to Wealth Tax.
A technical clarification is relevant here.
The Law defines the taxable event by reference to ownership of net wealth exceeding €3 million, but the effective operation of the tax cannot be reduced to the simple proposition that any wealth above that amount is automatically taxed.
The legislation provides for a €700,000 tax-free allowance and a tax scale under which the first €3 million of the taxable base is subject to a 0% rate. In addition, the exemptions and other rules laid down by the legislation must also be taken into account.
It is therefore more accurate to state that the ITSGF is aimed at high-net-worth individuals and that the effective tax burden will depend on the composition of the taxpayer’s wealth, the applicable exemptions and the rules governing the determination of the taxable base and tax liability.
Although originally introduced as a temporary measure, its application was extended by Royal Decree-Law 8/2023 of 27 December, pending a review of wealth taxation in the context of the reform of Spain’s regional financing system. This extension is expressly incorporated into the current wording of Law 38/2022.
The tax remains applicable in practice in 2026. Order HAC/652/2026 of 26 June amended Form 718 for the tax and provided for its first application to the form corresponding to the 2025 tax year, for which the filing period began on 1 July 2026.
The coexistence of both taxes means that they must be analysed together when considering the taxation of high-value estates.
Why have other countries adopted different models?
Developments across Europe show that there is no single approach to taxing wealth.
France, for example, currently taxes certain forms of real estate wealth instead of maintaining a general tax on net wealth. Italy also applies taxes to certain categories of assets, including certain financial assets and real estate located abroad.
Switzerland retains a wealth tax whose structure depends to a significant extent on the cantons, while Norway also maintains a general tax on net wealth under its own system.
These differences show that the issue cannot be reduced to identifying which countries “have” or “do not have” a wealth tax.
A rigorous analysis requires simultaneous consideration of the taxation of income, capital gains, real estate, inheritances, investments and corporate structures.
The importance of tax residence and the composition of wealth
For taxpayers with significant assets, the increasing internationalisation of investments, businesses and personal residence makes it particularly important to consider these issues as a whole.
Tax residence, the location and nature of assets, business shareholdings, the possible application of family business exemptions, deductible debts and regional legislation can all have a substantial impact on the final outcome.
It is also necessary to distinguish between residents and non-residents, as the rules governing liability to Wealth Tax differ depending on the taxpayer’s circumstances.
For this reason, wealth-planning decisions should not be based solely on a particular tax rate or on an isolated comparison with another country.
A tax environment that requires careful planning
The relatively distinctive position of the Spanish system within the European landscape does not, in itself, allow us to predict how it may evolve in the future.
What it does highlight is the need to approach wealth taxation from a comprehensive perspective.
For individuals, families and business owners with significant assets, appropriate planning requires an understanding not only of the legislation currently in force, but also of the interaction between different taxes, regional powers, available exemptions and the potential consequences of transactions with an international dimension.
In a context of increasing mobility of individuals and capital, legal certainty and advance analysis are just as important as the applicable tax rate itself.
At Solium Legal, we advise individuals, families and businesses on tax and wealth planning matters, including situations with both domestic and international elements.
