Spanish Wealth Tax Abolished

In line with an electoral promise made 4 years ago, Spain's socialist government has abolished the Spanish wealth tax liability, Impuesto sobre el Patrimonio or patrimonio for short. It has been decreed that, with effect from 1st January 2008, liability for this tax will cease. The Spanish wealth tax, which is collected by regional governments, was introduced 30 years ago requiring all property owners, both residents and non-residents alike, to pay an annual wealth tax based on the net value of their taxable assets in Spain, after certain allowable deductions, e.g. mortgages. Whilst this news is extremely welcome, it does not mean that those filing tax returns during 2008 will benefit immediately, since the payment is still due for 2007, the tax year for which the 2008 declarations relate. Advice should be sought from fiscal representatives to ensure that the correct tax is paid in 2008, and further that records are amended in readiness for the 2009 declarations.

 

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