Wealth Tax in Spain for Non-Residents: Modelo 714 Explained

What the wealth tax is and why a non-resident pays it

The Impuesto sobre el Patrimonio is a direct, personal tax on the net wealth of individuals, created by Ley 19/1991 and still governed by that law. It taxes the ownership of assets on a single day, 31 December (art. 29), and it is strictly individual: there is no joint return, and a married couple who own a villa together are two taxpayers with two returns and two exempt minimums.

Spanish residents pay by obligación personal on their worldwide net wealth. Anyone else is caught by obligación real (art. 5.Uno.b): a non-resident is taxed only on the assets and rights that are located in Spain, can be exercised in Spain or must be fulfilled in Spain — the apartment in Torrevieja, a Spanish bank account, a car registered here — and the exempt minimum, the scale and the return are all applied to that Spanish slice alone. Your house, pension and portfolio back home are invisible to Spain.

Two details of the law catch people out. First, shares in an unlisted company are treated as located in Spain when at least 50% of its assets, directly or indirectly, are Spanish real estate — so holding the villa through a foreign company does not remove it from the tax (art. 5.Uno.b, second paragraph). Second, a resident who moves abroad may elect, in the first return after leaving, to keep being taxed by obligación personal (art. 5.Uno.a); it is rarely attractive, but it exists. Workers under the special inbound regime of art. 93 of the income tax act are likewise taxed on a real basis only, although they live in Spain.

Residence itself is decided by the income-tax tests, to which art. 5.Dos refers: more than 183 days in Spain in the calendar year, or the centre of your economic interests here, makes you a resident and moves you to obligación personal on everything you own. Our guide on modelo 210 explains those tests in detail.

The €700,000 exempt minimum — and why the €300,000 home exemption is not yours

Article 28 fixes the exempt minimum. Where a region has not set its own figure, the taxable base is reduced by €700,000 (art. 28.Dos), and art. 28.Tres states expressly that this amount applies to non-residents taxed by obligación real. It is a reduction per taxpayer, not per property: a couple owning a €1,300,000 house in equal shares each report €650,000 and each deducts €700,000, leaving nothing to tax.

The €300,000 exemption that Spanish residents enjoy on their vivienda habitual (art. 4.Nueve) is a different thing. The law defines the habitual home by reference to art. 68.1.3.º of the income tax act — the dwelling where the taxpayer actually and permanently lives. A non-resident, by definition, has that home outside Spain, so a holiday flat in Benidorm, a second home in Jávea or a rental villa in Orihuela Costa can never qualify. Do not add €300,000 on top of the €700,000; only the exempt minimum is available to you.

Other exemptions of art. 4 do reach non-residents when the asset is in Spain: household contents and personal effects (ajuar doméstico, art. 4.Cuatro) are exempt, as are pension-plan rights (art. 4.Cinco) and securities whose yields are exempt under the non-resident income tax law (art. 4.Siete). Jewellery, cars, boats and works of art, on the other hand, count at market value (arts. 18 and 19).

How your Spanish property is valued (art. 10)

Real estate is not valued at what you think it is worth. Art. 10.Uno takes the greatest of three figures: the cadastral value, the value the Administration has determined or checked for another tax, and the price, consideration or acquisition value. For most foreign owners the purchase price is the highest of the three, and it stays fixed while cadastral values creep up over the years.

The second figure matters more since Ley 11/2021: the transfer-tax base on a purchase is now the Catastro’s valor de referencia, or the price if higher (art. 10.2 of the transfer-tax law). If the reference value used for your ITP exceeded the price you paid, that higher figure is the one that counts for wealth tax. Property under construction is valued at the amounts actually invested up to 31 December plus the plot (art. 10.Dos), and timeshare-type rights follow either the ordinary rule or the price paid for the certificates (art. 10.Tres).

Ownership is attributed under civil-law rules (art. 7): assets common to both spouses are split in half unless another share is proved, and where the title is unclear the Administration may treat as owner whoever appears in a public or tax register — in practice the Registro de la Propiedad and the Catastro. Usufruct and bare ownership are valued with the transfer-tax formulas (art. 20), which is why an inherited usufruct over a Costa Blanca home does not count at the full value; our usufruct calculator applies those rules.

Deductible debts: the mortgage counts, most other debts do not

The taxable base is net wealth: assets minus charges and debts (art. 9.Dos). For a non-resident the deduction is narrower than for a resident. Art. 9.Cuatro allows only the charges and encumbrances that burden the Spanish assets themselves, and the debts incurred for the capital invested in those assets. A mortgage taken to buy the apartment is deductible; a personal loan in your home country for something else is not, even if you paid the Spanish community fees with it.

Debts are valued at their nominal amount on 31 December and must be properly documented (art. 25.Uno): the bank’s year-end certificate showing the outstanding capital is the standard proof. Guaranteed amounts do not count until the guarantor is actually called upon, and the mortgage security itself is not the deductible item — the deferred price or the secured loan is (art. 25.Dos). Debts contracted to buy exempt assets are never deductible (art. 25.Tres).

Where a Spanish bank account is part of your Spanish assets, art. 12 values it at the year-end balance or, if higher, the average balance of the last quarter; funds withdrawn to buy assets that appear in the return or to repay debts are left out of that average, and a loan paid into the account in the last quarter is neither counted in the average nor deducted as a debt. A large December transfer to fund the deposit on a new purchase therefore does not distort the figure.

The state scale (art. 30) and a worked example

Once the exempt minimum is deducted, the taxable base is charged at the scale approved by the region or, failing that, at the state scale of art. 30.2, which is the one that applies by default to non-residents (art. 30.3). It is progressive with eight bands, starting at 0.2% and reaching 3.5% above €10,695,996.06 — the table below reproduces the consolidated BOE text.

Worked example: a Norwegian owner’s apartment in Alicante is recorded at €1,200,000, held in her sole name, with no mortgage. Taxable base €1,200,000 minus €700,000 = €500,000. The band starting at €334,252.88 carries a fixed €835.63, and the remaining €165,747.12 is taxed at 0.5%, that is €828.74. Total wealth tax: €1,664.37 — about 0.14% of the property’s value, roughly what a year of community fees costs.

Because the scale is applied per person, the same apartment held 50/50 would give each spouse a base of €600,000, under the minimum, and no tax at all. Splitting ownership between spouses at the time of purchase is therefore the single most effective wealth-tax decision a non-resident buyer makes — and it has to be made before the deed is signed, not in April.

The tax is ceded to the regions: the non-resident’s option (DA 4ª)

The wealth tax is a state tax whose revenue, and part of whose rules, are ceded to the autonomous communities (art. 2.Dos and the first additional provision of the LIP, under the financing law Ley 22/2009). Within the cession the regions may set their own exempt minimum, their own scale and their own deductions and bonuses — which is why the tax is effectively zero in some regions and higher than the state scale in others.

Originally a non-resident was always taxed under the state rules. The fourth additional provision, in the wording given by Ley 11/2021, now grants every non-resident, wherever they live, the right to apply the rules of the region in which the greatest value of their Spanish assets is located. AEAT’s own manual describes this as an option that may be exercised or not: you pick the more favourable set of rules on the return itself, and nothing obliges you to take the regional one.

The choice is made for the whole return, not asset by asset. An owner with a flat in Benidorm and a smaller one in Murcia looks at where the higher value sits — the Comunitat Valenciana — and compares the Valencian package (minimum, scale, bonuses) against the state package. Because the Solidarity Tax on Large Fortunes was created precisely to neutralise regional bonuses above €3,000,000, the regional route is most valuable in the band between €700,000 and €3,000,000.

What the Comunitat Valenciana does (Ley 13/1997, arts. 8-9)

The Valencian rules live in Ley 13/1997 of the Generalitat. Art. 8 sets the exempt minimum at €1,000,000, but its wording is precise: it applies to taxpayers by obligación personal who habitually reside in the Comunitat Valenciana. A non-resident does not meet that description, so the safe reading is that a British or Dutch owner of a Costa Blanca home keeps the state minimum of €700,000 even when opting for the Valencian rules. Treat any promise of the €1,000,000 figure to non-residents with caution and ask for individual advice.

Art. 9 sets a Valencian scale that is higher than the state one in every band except the last: 0.25% instead of 0.2% on the first €167,129.45, 0.37% instead of 0.3% on the next, 0.62% instead of 0.5% and so on, up to the same 3.5% top rate. The temporary scale that applied in 2023 and 2024 has been repealed. The comparison table below places both scales side by side.

The consequence for the typical non-resident is counter-intuitive: opting for the Valencian rules normally costs more, not less. On the €500,000 taxable base of the example above, the state scale gives €1,664.37 and the Valencian scale €2,063.81. Unless a future Valencian bonus changes the picture, most non-residents with Costa Blanca property simply stay on the state rules — and the DA 4ª option, being optional, lets them do so.

Modelo 714: who must file, when and how

The return is modelo 714. Art. 37 obliges you to file in two cases: when the tax works out as payable after deductions and bonuses, or — even with nothing to pay — when the value of your assets and rights, measured under the law’s rules and before deducting debts or the exempt minimum, exceeds €2,000,000. Keep the two tests apart: a non-resident with a €1,500,000 villa and a €900,000 mortgage owes nothing and, being under €2,000,000, files nothing; the same villa recorded at €2,100,000 must be declared even though the tax may be zero.

The filing window is the same as for the annual income-tax return each year. For the 2025 tax year — assets at 31 December 2025 — AEAT set the window from 8 April to 30 June 2026, with 25 June 2026 as the last day if you pay by direct debit from a Spanish account. Modelo 714 is filed electronically on the AEAT sede with a digital certificate, Cl@ve or through an authorised collaborator such as your tax adviser.

Art. 6 requires non-residents to appoint a representative resident in Spain when they operate through a permanent establishment or when AEAT so requires because of the size and nature of their Spanish assets, and to notify the appointment before the filing deadline; failure is a serious infringement fined €1,000. Separately, the non-resident income tax rules require residents outside the EU/EEA to appoint a representative in several situations, so in practice most non-EU owners already have one — the same person should handle modelo 714.

Each owner files their own return with their own NIE and their own €700,000. If you have never filed and should have, regularising voluntarily before AEAT writes to you means paying the late-filing surcharge of the General Tax Law rather than a penalty; the limitation period is four years.

The Solidarity Tax on Large Fortunes (Ley 38/2022)

Since 2022 a second, state-only tax sits on top of the wealth tax: the Impuesto Temporal de Solidaridad de las Grandes Fortunas, created by art. 3 of Ley 38/2022. It taxes net wealth above €3,000,000, uses the same valuation rules and the same 31 December accrual, and applies to non-residents by obligación real on their Spanish assets, exactly like the wealth tax.

The base is reduced by a €700,000 exempt minimum, which Real Decreto-ley 8/2023 confirmed for residents and non-residents alike, and the scale has three effective bands: 1.7% between €3,000,000 and €5,347,998.03, 2.1% up to €10,695,996.06 and 3.5% above. Crucially, the wealth tax actually paid for the same year is deducted from the solidarity tax, so for a non-resident on the state scale the second tax usually adds nothing: it bites only where regional bonuses have wiped out the wealth tax.

The tax was announced for two years, but Real Decreto-ley 8/2023 extended it indefinitely, until wealth taxation is reviewed within the reform of regional financing. It is filed on modelo 718 in July of the following year, and only by those whose tax works out as payable. With the €700,000 minimum and a 0% first band that means, in practice, net Spanish wealth from roughly €3,700,000 upwards.

IBI, modelo 210 and modelo 720: how the obligations fit together

A non-resident owner on the Costa Blanca lives with a small set of recurring taxes, and it helps to see them together. IBI is the municipal property tax: it accrues on 1 January, whoever owns the property that day owes the whole year, the rate is set by each ayuntamiento in its ordenanza fiscal, and in most of Alicante province the receipt is issued by SUMA Gestión Tributaria. Our free IBI simulator estimates it by municipality; the cadastral value it uses is the starting point for the two state returns.

Modelo 210 is the annual non-resident income tax: deemed income on a property at your disposal, rental income, or the gain on a sale. Modelo 714 is the wealth tax on the same property, but on its value rather than its income, and only above €700,000. They are filed separately, on different calendars, and one does not replace the other. The cadastral value on the IBI receipt drives the modelo 210 base and sets the floor for the modelo 714 valuation, so the three documents must tell the same story.

Modelo 720 — the informative return on assets held abroad — is the one non-residents do not file. It is an obligation of Spanish residents with foreign accounts, securities or property above the reporting thresholds. The day you become resident the picture flips: you file modelo 720 for the assets you left behind, you pay wealth tax on your worldwide wealth by obligación personal, and the €300,000 main-home exemption and the regional minimum finally become yours. Our modelo 720 guide covers that transition.

The 60% income-wealth cap and the foreign-tax credit: residents only

Residents enjoy a safety valve in art. 31: the sum of their wealth tax and income tax may not exceed 60% of their income-tax bases, and where it does the wealth tax is reduced, by up to 80%. The provision is drafted expressly for taxpayers by obligación personal. A non-resident cannot invoke it: with little or no Spanish income, the wealth tax on a large Spanish property is paid in full, whatever the ratio to income.

The same is true of art. 32, which lets residents deduct wealth taxes paid abroad: it applies only to obligación personal. A non-resident who also pays a wealth tax at home on the same Spanish property gets no credit in Spain; relief, if any, comes from the home country’s own rules or from the double-tax treaty, and only where that treaty covers taxes on capital. Several home countries — the United Kingdom among them — have no wealth tax at all, in which case there is nothing to credit and the Spanish tax is simply a cost of ownership.

The only bonus in the state rules is the 75% reduction for assets in Ceuta and Melilla (art. 33), irrelevant to Costa Blanca owners. Everything else — the Valencian deduction for investment in emerging companies, for instance — belongs to the regional package and only reaches you if you opt for it under DA 4ª and meet its conditions.

Why non-residents delegate modelo 714 to a tax representative

Wealth tax is an annual decision as much as an annual return. Every year someone has to check the three property values, obtain the bank’s mortgage certificate, decide whether the regional option is worth taking, confirm that the gross-assets test has not been crossed after a new purchase, and coordinate the figures with modelo 210 so that AEAT sees one consistent cadastral value across returns. Most of that is in Spanish and most of it needs a digital certificate.

A representative in Spain also receives AEAT’s notifications. Wealth-tax queries often arrive years later, when the Administration cross-checks a sale, an inheritance or a return filed by a relative, and a letter to an empty Spanish address is deemed delivered. Having a resident representative on file is the difference between answering a request and discovering a penalty.

spainfiscal prepares and files modelo 714 for non-resident owners across the Costa Blanca and the Comunitat Valenciana, models the state-versus-Valencian choice, coordinates it with modelo 210 and the IBI, and acts as your appointed tax representative before AEAT — so the villa stays a holiday home and not a tax problem.