Now that the Income and Wealth tax campaign has started (this year from April 11 until June 30, 2023), the usual doubt arises as to the limits above which we must also file Wealth Tax (form 714).
It is important to verify these limits, especially if our wealth has undergone some important change with respect to the previous year, for example as a result of an acceptance of inheritance or the receipt of a significant bonus and its investment.
Article 37 of Law 19/1991, of June 6, 1991, on Wealth Tax, on the persons obliged to file a tax return, states the following:
“Those taxpayers whose tax liability, determined in accordance with the rules regulating the tax and after applying the appropriate deductions or allowances, is to be paid, or when, not being given this circumstance, the value of their assets or rights, determined in accordance with the rules regulating the tax, is greater than 2,000,000 euros, are obliged to file a tax return.”
In other words, if you meet any of the following, you will be obliged to file the Wealth Tax return:
- The value of your assets or rights results in more than 2,000,000 euros.
- The tax liability for this tax is to be paid.
When the value of the assets or rights exceeds 2,000,000 euros.
For the application of this limit, all the assets and rights of the taxpayer must be taken into account, whether or not they are exempt from tax, without considering the charges and encumbrances that reduce their value, or the debts or personal obligations for which the taxpayer is liable.
For non-residents who are taxed by real obligation, only the value of the assets and rights that are located, could be exercised or would have to be fulfilled in Spanish territory must be taken into account.
When the tax liability for Wealth Tax is to be paid.
In cases where the total value of their assets or rights is less than 2,000,000 euros, there is an obligation to file the Wealth Tax return if the resulting tax liability is payable.
This happens when the taxable base, i.e., the value of the taxpayer’s net worth is higher than the exempt minimum:
Exempt limits applicable to Wealth Tax:
- The habitual residence is exempt with a maximum amount of 300,000 euros.
- In general: 700,000 euros.
- In addition, different autonomous communities establish other limits:
- Andalusia: 1,250,000 euros with a degree of disability equal to or higher than 33% and 1,500,000 euros with a degree of disability equal to or higher than 65%.
- Aragón: 400,000 euros.
- Catalonia: 500,000 euros.
- Extremadura: 500,000 euros in general, 600,000 euros with a degree of disability equal to or greater than 33%, 700,000 euros with a degree of disability equal to or greater than 50% and 800,000 euros with a degree of disability equal to or greater than 65%.
- The Valencian Community: 500,000 euros in general and 1,000,000 euros with a degree of mental disability equal to or greater than 33% or with a degree of physical or sensory disability equal to or greater than 65%.
- Navarra: 550,000 euros in general, being the exempt amount for habitual residence of 250,000 euros and a value of goods and rights, superior to 1,000,000 euros for obligatory nature of this tax.
- In the Basque Country: 800,000 euros in general, and the amount exempted for principal residence is increased to 400,000 euros.
- In addition, in the Autonomous Communities of Andalusia and Madrid there is a 100% rebate in the Wealth Tax quota, that is to say, that only those who have a wealth of more than 2,000,000 euros, although without income, will have to file this tax return.
If you have any doubts, you can consult with our team of tax experts or contract the online declaration.
