Spanish wealth tax, Modelo 720 and the solidarity tax: what Brits in Andalusia pay

Most Brits in Málaga will never pay a cent of wealth tax, but plenty of them still have forms to file.

The short version

• Spain has an annual wealth tax (Impuesto sobre el Patrimonio). Andalusia gives a 100% relief on it, so most people with assets in the region pay nothing [3][8].
• The national solidarity tax on large fortunes (ITSGF) applies to net wealth above EUR 3 million (about £2.5 million). It's still in force for 2026, and what you pay to Andalusia is deducted from it [2].
• Residents must still file a wealth tax return if their gross assets are over EUR 2 million (about £1.67 million), even when nothing is due [9].
• Spanish tax residents with more than EUR 50,000 (about £41,700) in any of three categories of foreign assets, such as UK bank accounts or shares, file the Modelo 720 declaration by 31 March [4].
• The old, crushing Modelo 720 penalties were struck down in 2022. Ordinary penalties now apply, but the duty to file hasn't gone away [5][6].

Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = EUR 1.20).

Wealth tax: the basics

Back home in Blighty there's no annual tax just for owning things. Spain has one. The national framework is the 1991 wealth tax law, but the regions (comunidades autónomas) set their own reliefs, so where you live, or where your Spanish assets sit, makes all the difference [2].

Under the national rules [2][9]:

• Spanish tax residents are taxed on their worldwide net assets: the flat in El Palo, the semi in Stockport, the ISA, the share portfolio and the bank balances.
• Non-residents are taxed only on assets in Spain, such as a holiday home in Benalmádena or a Spanish bank account.
• The first EUR 700,000 of net wealth (about £583,000) is exempt.
• Residents can also exempt up to EUR 300,000 (about £250,000) of the value of their main home.
• The rates run up a scale, from 0.2% on the lowest band to 3.5% at the top.

Andalusia's 100% relief

Since 2022, Andalusia has given a 100% relief (bonificación) on the wealth tax bill [3][8]. It was introduced by the Junta de Andalucía's Decree-law 7/2022, alongside a wider package of tax cuts. While the national solidarity tax is in force, the Agencia Tributaria explains that the 100% relief is replaced by one equal to the difference between your wealth tax and what the solidarity tax would take, so for the very wealthiest the money is paid to Andalusia rather than to Madrid (more on that below) [8].

For most Brits in Málaga province, that means a wealth tax bill of zero.

Non-residents with Spanish assets can usually apply the rules of the region where most of those assets are, so a British owner of a Marbella villa who lives in Surrey generally gets the Andalusian relief too [9]. A tax adviser who knows both countries can check how that works for you.

Who still has to file

Paying nothing isn't the same as filing nothing. You must file a wealth tax return (Modelo 714) if [9]:

1. there's still tax to pay after deductions and reliefs, or
2. the gross value of your assets, before deducting debts such as a mortgage, is more than EUR 2 million (about £1.67 million), even if nothing is due.

The return is filed online with the Agencia Tributaria during the main income tax campaign, which runs from April to the end of June [2]. If you're resident and sitting on a decent UK pension pot, a house and some investments, that EUR 2 million gross figure isn't as far away as it sounds.

The solidarity tax on large fortunes

In late 2022 the Spanish government brought in the Impuesto Temporal de Solidaridad de las Grandes Fortunas (ITSGF), partly as a response to regions such as Andalusia and Madrid cutting wealth tax to nothing [2]. It was meant to be temporary for 2022 and 2023, but it has been extended, and it applies in 2026 [2].

How it works [2]:

Because of the EUR 700,000 exempt amount, in practice a bill only starts somewhere around EUR 3.7 million of net wealth, or about £3.1 million (higher with the main home exemption) [2].

The neat trick is the credit. Andalusia changed its relief so that people above the threshold pay the region an amount equal to what the solidarity tax would have taken. The solidarity tax then deducts it, so they pay once, not twice, and the money stays in Andalusia [3]. There's also an overall cap that limits income tax, wealth tax and solidarity tax together to a share of your income, with a floor below which the bill can't fall [2].

For the vast majority of British retirees on the Costa del Sol, none of this bites. If your net worth is in the millions, it's time for a specialist, not a guide.

Modelo 720: declaring your UK assets

This is the one that catches ordinary Brits. Once you're tax resident in Spain, you have to tell the Agencia Tributaria what you own abroad. It's a declaration, not a tax. The FCDO's Living in Spain guide puts it plainly: "You must declare all assets you hold outside Spain" [1].

Who files

You file Modelo 720 if, on 31 December, you were Spanish tax resident and the value of your foreign assets in any of these three categories was more than EUR 50,000 (about £41,700) [6]:

Each category is tested on its own. EUR 49,000 in UK accounts and EUR 200,000 of UK property means you declare the property but not the accounts.

When and how often

1. First year: file between 1 January and 31 March for the assets you held on 31 December of the year before. The deadline is 31 March [4].
2. Later years: you only file again if a category has gone up by more than EUR 20,000 (about £16,700) since your last declaration, or if you've sold or closed something you'd declared [6].
3. How: online only, with a digital certificate or Cl@ve. Most Brits use a gestor or tax adviser for the first one.

Crypto held abroad goes on a separate form, Modelo 721. And moving everything into Spanish banks doesn't remove the duty to declare your UK property, so keep a list.

The penalties: what changed

Modelo 720 used to be notorious. Late filers could face penalties of up to 150% of the value that should have been declared, and Hacienda treated undeclared assets as untaxed income with no time limit [5]. On 27 January 2022 the Court of Justice of the European Union ruled those rules disproportionate, and Spain's Law 5/2022 replaced them with the ordinary penalty regime for information returns, in articles 198 and 199 of the General Tax Law [6]. In June 2022 Spain's Supreme Court cancelled a Modelo 720 penalty as disproportionate for the first time [5].

Under the ordinary regime, the penalties for not filing on time are now [7]:

Penalties are now much smaller, especially if you file late before the taxman comes knocking. But they still exist, and a missing Modelo 720 can be how Hacienda spots UK income that should have been on your Spanish income tax return. File it, and file it right.

How this links up with the UK side

• Your UK ISA is tax-free in the UK but not in Spain. It counts as a foreign asset for Modelo 720 and as part of your wealth, and the income in it is taxable in Spain once you're resident. Our guide to ISAs when you move abroad has more.
• UK property you keep stays within UK inheritance tax and UK tax on rental income, whatever Spain does. See UK income while you live abroad.
• UK pensions have their own treatment, and pension transfers need regulated financial advice. Never move a pension because of a Spanish declaration.
• The UK–Spain double taxation agreement deals with income tax, not wealth tax or Modelo 720.

None of this is fun, but it's very doable. Plenty of members of our community group for Brits in Spain have filed their first Modelo 720 and are happy to say who helped.

A quick checklist

1. Decide when you became Spanish tax resident (usually more than 183 days in a calendar year).
2. List everything you own outside Spain at 31 December, in the three Modelo 720 categories.
3. If any category is over EUR 50,000, file Modelo 720 by 31 March.
4. Add up your worldwide gross assets. If they're over EUR 2 million, you'll need a wealth tax return even with Andalusia's relief.
5. If your net wealth could be anywhere near EUR 3.7 million, get specialist advice on the solidarity tax.

Sources

1. GOV.UK (FCDO): Living in Spain (updated 3 July 2026)
2. Guía Fiscal: Impuesto Temporal de Solidaridad de las Grandes Fortunas 2026 (updated 25 July 2026)
3. Guía Fiscal: Impuesto sobre el Patrimonio, Andalucía, 2026
4. TaxDown: Las sanciones relacionadas con el modelo 720
5. 11Onze: The Supreme Court ratifies the death of Model 720 (July 2022)
6. Agencia Tributaria: Modelo 720, preguntas frecuentes (sanctions page updated 8 September 2026)
7. BOE: Ley 58/2003, General Tributaria, artículo 198
8. Agencia Tributaria, Manual práctico de Patrimonio 2025: bonificación autonómica de Andalucía
9. Agencia Tributaria: Manual práctico de Patrimonio 2025

Keep reading

• Spain taxes for Brits
• Spanish inheritance tax and wills for Brits in Andalusia
• Double taxation agreements and reliefs
• ISAs when you move abroad