Spain’s Wealth Tax in a European Context: A Clear Breakdown

Only one out of 27 European Union countries has a wealth tax network that targets individual people after debts are deducted: Spain. The rest of the bloc either lacked such a tax or has abolished it in recent years. In truth, this is a very distinctive levy, one that can only be meaningfully compared to similar concepts in Turkey, Norway, and Switzerland, which feature the highest rates. Experts such as Valentí Pich, president of the General Council of Economists, describe it as a tribute with serious, lasting consequences for the economy. Juan Corona, Professor of Public Finance at Abat Oliva University and Jean Monet Professor of European Financial Integration, emphasizes its uniqueness from a comparative standpoint.

wealth tax, among the wealthy reform or abolition

Both there and in other nations, a conference gathered to examine this tax, a figure that gained visibility after the 1970s and 1980s. While Spain shares this concept with a few countries that levy taxes on assets beyond personal income, some places like France and Sweden discontinued it for reasons deemed technical rather than political manipulation. In Sweden, arguments centered on equality, efficiency, and capacity. They concluded that double taxation occurs when wealth is taxed both as property and as income, a finding noted by a professor who specializes in taxation.

Some argue that wealth taxes produce less than ideal outcomes for investment and savings. In terms of adequacy, the revenue raised does not always justify maintaining the tax. There is also a concern that such levies could push capital into offshore arrangements.

The White Paper on Tax Reform, prepared for the Finance Ministry, notes that some countries with lower rates collect more revenue from wealth taxes than others with higher rates. Luxembourg, for example, taxes companies and achieves a share well above 7% of total tax revenue, while Switzerland collects over 4%. Spain, by contrast, brings in around 0.5% of total revenue from wealth tax, and Norway about 1.5%. Spain holds some of the highest rates, reaching up to 3.75%, while other nations with lower rates and fewer exemptions are expanding their reach.

Spain

For assets exceeding €700,000, the wealth tax applies at rates ranging from 0.2% to 3.75%, with the tax redistributed so those with more pay more. The main residence up to €300,000 is exempt. Administration falls to autonomous communities, which can grant deductions or bonuses and adjust rates beyond the exempt minimum. In practice, regions like Aragon lowered the exemption to €400,000, Catalonia, Extremadura, and Valencia set exemptions around €500,000, and other communities have experimented with thresholds that influence the number of filers. In recent years, Andalusia signaled a major shift by announcing a 100% quota cut, echoing Madrid’s long-standing approach. Galicia offers a 25% discount, with plans to raise it to 50%. The wealth tax was introduced in 1977 as an extraordinary levy, reintroduced in 2011 to boost revenue in the wake of the 2008 crisis, and later permanently consolidated in the 2020 budget framework. Roughly €1.2 billion is collected nationwide, with a large share concentrated in Catalonia. In response to regional dynamics led by the PP, the government considered a temporary solidarity tax on assets over €3 million for 2023 and 2024, targeting regions that do not participate in the inheritance tax.

Switzerland

The wealth tax in Switzerland, called Vermögenssteuer, is collected by cantons and applies to assets held by residents worldwide. Created in 1840, it expanded gradually to all cantons by 1970 and remains decentralized at cantonal and municipal levels, with state harmonization only at higher levels. Taxable individuals are natural persons, and municipalities may add fees to the cantonal levy. Exemptions vary by canton and family circumstances, typically ranging from €65,000 to €185,000. Rates are generally low and progressively structured, from about 0.03% to 1.09%, and the system collects roughly 4% of the total tax revenue in the country.

Norway

Norway imposes a wealth tax where assets above roughly €195,000 are taxed at about 0.95%. In households with assets surpassing around €2.4 million, the rate rises to 1.1%. The tax has existed since 1892 and is split between national and municipal levels, the latter at about 0.7% and the national portion at 0.15%. Installments are paid quarterly, and the levy accounts for roughly 1.5% of annual tax revenue for the country.

France

France abolished the solidarity wealth tax in 2018, replacing it with the real estate wealth tax (IFI) that applies when real estate assets exceed €1.3 million. The rate can reach 1.5% for high-value properties. This is a centralized tax with the real estate as the taxable subject, including ownership rights attached to real estate or related shares. The maximum combined rate scenarios can push the total tax burden from real estate and income taxes, with the HE base for 10 million euros pushing the rate up further. In terms of revenue, the IFI contributes around 0.2% of the total tax intake.

Italy

Italy currently taxes certain assets abroad at 0.76% for real estate and 0.2% for financial investments. A one-off levy of 0.6% was imposed in 1992 to address debt and Maastricht Treaty commitments, targeting deposits and securities held by residents. Since 2012, two ongoing taxes on assets abroad persist: real estate abroad (0.76%) and a 0.2% tax on certain financial assets. The measures were designed to generate additional revenue during fiscal stress and curb tax evasion, yet the resulting revenue remains a point of debate.

Belgium

Belgium introduced a 0.15% tax on securities accounts exceeding €1,000,000, applicable to both resident and non-resident holders. It replaced a prior regime struck down in 2019 for equity concerns, with the new tax covering the average value of securities accounts across all assets, including fixed income, equities, derivatives, and cash. The levy represents a small share of total tax revenue, while the broader financial system remains the focal point for reform.