Tax · non-residents · 2026

Wealth tax Spain for non-residents (incl. Mallorca)

What do foreigners with a property in Spain or the Balearic Islands pay? Allowances, rates, the Mallorca special rule — and why a mortgage can substantially lower the tax burden.

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In short

Do foreigners with a property in Spain pay wealth tax?

Yes. The national allowance is €700,000 per person; in the Balearics €3m (€6m for a couple), in Andalusia effectively 0.

Spanish wealth tax: how does a mortgage lower it?

It is calculated on net wealth (property minus mortgage). Important, per the Tribunal Supremo (167/2023): the mortgage must have been taken out for the purchase or for renovation.

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What is the solidarity tax?

The Impuesto de Solidaridad (since 2023) applies from €3m of net wealth; in regions without a rebate it does not apply.

The regions →

Do Germans with a property in Spain pay wealth tax?

Yes — as a non-resident you pay Spanish wealth tax (Impuesto sobre el Patrimonio) on your net assets in Spain, essentially the property value less debts. A general allowance of €700,000 per person applies; a couple each holding half in the land register effectively doubles it. Only above that does a progressive rate begin. Crucial and often overlooked: a mortgage reduces the taxable net wealth, because the loan is deducted from the property value — financing instead of paying cash lowers the tax base. Rates and allowances vary by region; some autonomous regions grant relief, others (such as the Balearics) levy it in full. Your exact liability depends on your tax status — that is tax advice, not a blanket statement. The financing point, though, is clear: borrowed capital works twice, as a liquidity lever and as a reduction of the wealth-tax base.

The basic principle

Wealth tax on Spanish property assets

Anyone who owns a property in Spain as a non-resident is subject to the Spanish Impuesto sobre el Patrimonio — this is what people mean when they search Spain wealth tax, Spanish wealth tax for non residents, wealth tax Spain non residents, or non resident wealth tax Spain. What is taxed is the net wealth located in Spain — that is, the property value less any mortgage. This is the most important reason why mortgages can be strategically attractive even when you have capital available.

Allowances by region

Regional differences in 2026

Highest allowance

Balearics (Mallorca, Ibiza, Menorca)

€3m per person. For married couples €6m. Wealth tax applies only above that. In force since 2023.

Effectively 0%

Andalusia (Marbella)

100% rebate — the tax formally exists but is reduced to zero at the regional level. For Marbella buyers, one of the most important advantages over Mallorca.

National standard

Other regions (Costa Brava, Valencia, Canaries)

National allowance €700,000 per person. Above that, graduated from 0.28% to 3.45%.

Not the same thing

Wealth tax vs. Modelo 720

The wealth tax (Impuesto sobre el Patrimonio) is often confused with Modelo 720 — but that is a different obligation. Modelo 720 is a pure reporting duty for assets held abroad (accounts, property, securities) above certain thresholds, not a tax of its own. It concerns people tax-resident in Spain with assets outside Spain — not non-residents with a property in Spain, for whom the wealth tax above applies. Details on Modelo 720.

The mortgage as a tax lever

How a mortgage lowers wealth tax

Example · Costa Brava

With vs. without a mortgage

Item	Amount
Property value	€1,200,000
Without a mortgage: net wealth	€1,200,000
Catalonia allowance	€700,000
Taxable	€500,000
With a €700,000 mortgage: net wealth	€500,000
Taxable	€0 (below the allowance)

Simplified calculation. Actual tax rates and the calculation are graduated. It only works if the mortgage was taken out for the purchase or for renovation (Tribunal Supremo, judgment 167/2023 of 13.02.2023) — a mortgage raised later on the same property is not deductible. Consulting a Spanish tax adviser is recommended.

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Model calculations without guarantee. Not binding offers. Terms vary depending on credit profile, property and bank. No tax or legal advice.

Assessment

Which value is used — and which debts may be deducted

Two questions decide the actual burden, and both are usually skipped in overview articles.

First, the value. What is assessed is not the market price an agent quotes, but the highest of the officially prescribed reference values — the cadastral value, the value established on acquisition, or the purchase price. If you do not know your property's cadastral value, you do not know your taxable base. It appears in the cadastral extract and equally on the bill for the IBI.

Second, the debts. Deductible are liabilities connected with the assets located in Spain. This is exactly where the Tribunal Supremo drew the line: a mortgage taken out to acquire or renovate the property reduces the net wealth — a mortgage raised later on the same property for another purpose does not. That is not a detail but the difference between effect and no effect, and it is why the order matters: financing at purchase is something different from raising capital years later.

Different considerations therefore apply to mortgaging an already paid-off property — see releasing capital from Spanish property. This is not tax advice; the application in your case belongs with a Spanish tax adviser.

Context

The wealth tax is not the only recurring obligation

It stands alongside several other items that concern owners without Spanish residence every year. Know only one of them, and you plan the holding costs too low:

Modelo 210 — the non-resident tax. It is due even if the property is used exclusively by you and never let.
IBI — the municipal property tax, regardless of use and residence.
Plusvalía — on a sale, on the increase in land value, levied by the municipality.
Capital Gains Tax in Spain — the state tax on the gain when you sell, withheld at a flat rate from every non-resident seller.
Modelo 720 — a pure reporting duty, and in the other direction: it concerns Spanish residents with assets abroad, not non-residents with a Spanish property.
Inheritance and gift tax — regulated very differently by region and, when planning the handover, often the bigger item than the wealth tax itself.

Because all of these diverge regionally, the choice of region is no side issue for buyers with room to choose. What separates the individual regions is under regions and financing; the costs of the purchase itself are worked out by the purchase costs calculator for each autonomous community.

FAQ

Frequently asked

What is the wealth tax in Mallorca and the Balearic Islands?

The Balearic Islands (Mallorca, Ibiza, Menorca, Formentera) apply the highest allowance in Spain: €3m per person, €6m for a married couple, before wealth tax is due at all — compared to €700,000 nationally. It applies equally to residents and non-residents, and is calculated on net wealth (property value minus any outstanding mortgage).

Do foreigners with a property in Spain have to pay wealth tax?

Yes. Non-residents with property assets in Spain are subject to Spanish wealth tax. The national allowance is €700,000 per person. In the Balearics it is €3m, in Andalusia effectively 0 (100% rebate).

How does a mortgage lower wealth tax?

Wealth tax is calculated on net wealth (property minus mortgage). A €700,000 mortgage on a €1.2m villa reduces the taxable wealth to €500,000. In a standard region that is below the allowance — no tax is due. Important, per the Tribunal Supremo (judgment 167/2023 of 13.02.2023): the mortgage must have been taken out for the purchase or for renovation — a mortgage raised later on the same property is not deductible.

Does the Mallorca allowance also apply to non-residents?

Yes. The Balearics allowance (€3m) applies to all persons — residents and non-residents alike — with assets located in Mallorca. For married couples the allowance doubles to €6m.

What is the difference between wealth tax and the solidarity tax?

The solidarity tax (Impuesto de Solidaridad) was introduced nationally in 2023 to offset regional rebates on wealth tax. It applies from €3m of net wealth. In regions without a rebate (e.g. Catalonia) the solidarity tax does not apply — it is only relevant where the regional wealth tax has been reduced.

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Read on

Strategy

Why a mortgage instead of cash?

Understand the tax lever.

Costs

Purchase costs

ITP and all the line items.

Region

Mallorca

The Balearics with the highest allowance.

Content by Siegfried Perini — local brand representative since 2019, active in real estate since 1992, entered in the German intermediary register (§ 11a GewO) as a person directly involved in brokerage and advice. Point of contact for German-speaking buyers in Spain and Portugal. Brokerage by Olga Nikushkina, mortgage credit intermediary under §34i German Trade Regulation (GewO); in Portugal through a locally licensed intermediary.

Last updated: July 25, 2026

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