Wealth tax in Andalucia removed
The regional government has just announced that starting from the 2023 tax year, the wealth tax in Andalucia will no longer be in effect. This decision aims to attract new wealthy residents to our region. Additionally, there will be a reduction in income tax for those in the lower earnings brackets.
So, how will the abolition of wealth tax in Andalucia work?
The regional government has decided to grant a 100% exemption on wealth tax, effectively relieving all taxpayers from this obligation. As a result, starting from the 2023 tax year, no wealth tax will be collected in Andalucia.
You might be wondering why the regional government has chosen to abolish this tax.
The main objective is to alleviate the fiscal burden on wealthy individuals and encourage them to become residents of Andalucia. It is estimated that this measure will attract approximately 7,000 new residents next year.
Now, let's talk about the rest of Spain.
The abolition of wealth tax in Andalucia is quite exceptional. Alongside Madrid, Andalucia joins the list of regions that no longer levy this tax. However, it's important to note that all other regions, except the Basque Country which operates under a different fiscal regime, still impose wealth tax. This tax applies to the worldwide assets of residents and to the property assets in Spain belonging to non-residents.
You may be wondering how much you will save on wealth tax in Andalucia as a result of this measure.
Currently, (2022) wealth tax is charged on a sliding scale ranging from 0.2% to 2.5% based on the value of your assets, whether they are located worldwide or in Spain, depending on your residence status. However, certain exemptions apply, including:
- An allowance of up to €700,000 on personal assets, excluding your main residence.
- An allowance of up to €300,000 on the fiscal value of your main residence.
Thanks to these allowances, most people are already exempt from paying wealth tax. In fact, only around 16,700 individuals in Andalucia paid this tax in 2020, according to the latest available data. With the latest measure, everyone will now be exempt from wealth tax.
The measure will come into effect starting from the 2023 tax year. But what about wealth tax in Andalucia for 2022? Yes, unless you qualify for an exemption as mentioned above, you will still be required to pay wealth tax for the current year."