No More Wealth Tax ?

CHANGES IN WEALTH TAX LAW
MESSAGE ONLY FOR THOSE WITH A PROPERTY IN SPAIN PURCHASED PRIOR TO 31-12-2008.

Over the course of this year, I have received numerous queries from our clients asking about the abolition of Wealth Tax (Impuesto del Patrimonio) in Spain. We promised to send further information to everyone as soon as this law was published.

This year, the Spanish government indeed studied the possibility of withdrawing its Wealth Tax. Subsequently and by means of Law 4/2008 of December 23, published in the OSG of 25/12/2008, the Spanish Wealth Tax was finally abolished.
Until now, non-residents have been required to present the Form 214, the so-called "wealth tax return". The official name of this Form 214 is "Impuesto sobre el Patrimonio y sobre la Renta de No Residentes" ("Wealth and Income Tax Return for Non-Residents").

As its name suggests, this form was used to tax non-residents in regards to Wealth Tax and Income Tax. Th e form itself is divided into two clearly separate sections.

Following approval of this law, those non-resident individuals who have one or more properties in Spain are no longer required to pay Wealth Tax. However, they are still required to pay the Income Tax for Non-Residents.

Therefore, the publication of this law means the following for non-residents with property in Spain:
1) They are no longer required to present Form 214 as of 01 January 2009.
2) They are required to present a new form: Form 210 regarding Income Tax for Non-Residents.
3) A reduction to taxes due: the amount to be paid to the Spanish Tax Authorities (Hacienda) by means of the new form will be less than the amount resulting from the previous Form 214 given that only the Income Tax for Non-Residents is now applicable and the Wealth Tax has been abolished.
4) Deadlines for presentation: the period for filing this tax return runs from 01 January to 30 June of the fo llowing year . In other words, the deadline for paying taxes corresponding to 2008 is 30 June