In recent months you have probably heard a lot about Wealth Tax, however, you may not know what it is or how it is applied. This is normal, as it works differently depending on the autonomous community and this leads to confusion.

From Unicasa & Home we would like to clarify the main points of the Wealth Tax so that you never have doubts again.

?Qué es?

It is defined by the Tax Agency as a direct tax that “taxes the net wealth of individuals, that is to say, the set of assets and rights of economic content of which they are the owner, with deduction of the charges and taxes that reduce their value, as well as the debts and personal obligations for which the owner is responsible”

It is regulated by Law 19/1991, of 6 June, but as its management is autonomous, it is necessary to take into account certain particularities that may affect us.It is important to stress that Wealth Tax is not the same as Personal Income Tax, as the latter is levied on income obtained during the year, whereas Wealth Tax is calculated taking into account the value of almost all the assets owned, without distinguishing whether they were obtained in that year or not.

?How is it calculated?

The assets held by the individual on 31 December will be taken into account. The assets that form part of the same, in general, are real estate, bank deposits, shares or equity interests, real rights and administrative concessions, among others. The Tax Agency establishes multiple exceptions that are not subject to Wealth Tax such as the taxpayer's habitual residence (up to 300,000 euros), household goods, certain works of art…

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Who pays it

This tax is not payable in all autonomous communities nor is it applicable to all individuals, who will have to file form 714 when they exceed a certain amount determined by each community.                         You could ask for bonuses and deductions depending on the case and in some places, as in the community of Madrid, it is 100% bonus.

Generally only those people who exceed a value of 700,000 euros (remember, it may vary depending on the community) or whose main residence exceeds 300,000 euros will have to pay this tax.

It must be taken into account that in the case of marriages in community of property, these assets must be divided between 2, so if they own a home worth 350,000 euros, each one really owns 175,000 euros, so they will not be subject to Wealth Tax.

Wealth Tax will not be applied in this case.

In short, this tax has many particularities depending on the autonomous community and assets that are exempt, so we recommend that you go to a tax advisor who can advise you for your specific case.

If you have any questions, please contact us.