The Spanish tax regime is quite different from the UK’s and can be complicated. When moving to and living in Spain, it is essential to adjust your tax planning to suit the local tax rules and opportunities. Here we look at what has changed for 2025 as well as over recent years.
It is always worth reviewing your tax planning once a year to ensure it is up to date. Establish if any tax reforms in Spain or the UK impact you and how you can protect yourself and your family from paying more tax than necessary. Consider too whether any changes in your personal circumstances mean you should adjust your financial planning.
Since the Spanish autonomous communities can adjust tax rates, allowances and exemptions for regional taxpayers, tax liabilities can vary significantly across Spain. Try and find a wealth management adviser living locally in your region to guide you on your Spanish tax planning. Blevins Franks has offices and long-established advisers in Andalucía, Murcia, Comunidad Valenciana, the Balearic Islands and Canary Islands, as well as covering Madrid and Cataluña. We also have Spanish tax specialists based in our UK office and are perfectly placed to help you plan your move to Spain and set up home there.
Income tax
In Spain, income is split into general income and savings income and subject to different progressive tax rates.
Tax on savings income
Savings income consists of interest and dividend income, capital gains made on the sale or transfer of assets, income derived from life assurance contract and pensions annuity income.
The rates have been modified for 2025, with the top rate increasing to 30%. The 2025 savings rates are as follows:
| INCOME | TAX RATE |
| Up to €6,000 | 19% |
| €6,000 to €50,000 | 21% |
| €50,000 to €200,000 | 23% |
| €200,000 to €300,000 | 27% |
| € 300,000 onwards | 30% |
These savings tax rates do not vary per region.
Personal income tax rates (general income)
All other income is classed as general income and the scale rates applied are made up of state tax rates and regional tax rates, so that there are some variations over the regions. So far, only the Canary Islands and Cataluña have adjusted their rates for 2025 income.
| Region | Starting from | Up to |
| Andalucía | 19% for income up to €12,450 | 47% for income over €300,000 |
| Balearics | 18.5% for income up to €10,000 | 49.25% for income over €300,000 |
| Canaries | 18.5% for income up to €12,450 | 50.5% for income over €300,000 |
| Cataluña | 19% for income up to €12,450 | 50% for income over €300,000 |
| Madrid | 18% for income up to €12,450 | 45% for income over €300,000 |
| Murcia | 19% for income up to €12,450 | 47% for income over €300,000 |
| Valenciana | 18.5% for income up to €12,000 | 54% for income over €300,000 |
Download our free Spain tax guide for the full rates for each region.
Wealth and solidarity taxes
Spain applies two taxes on those with higher levels of wealth, the standard ‘wealth tax’ and the newer ‘solidarity tax on large fortunes’. The latter was initially introduced for the 2022 and 2023 tax years, but it remained in place for 2024 and now also for 2025. You do not pay both taxes, as any wealth tax paid is deducted from the solidarity tax liability.
Taxpayers must file if they owe tax after deductions or if their assets exceed €2,000,000. The progressive rates for standard wealth tax at state level start at 0.2% up to 3.5% for wealth over €10,695,996. These can vary a little across regions. Each individual benefits from a €700,000 allowance plus another €300,000 for the main home if they are resident.
Note that many regions have significantly adjusted the allowances –
- Andalucía & Madrid – apply at 100% credit, so that residents do not have any liability to this tax.
- Murcia – increased the individual allowance to €3,700,000
- Balearics – increased the individual allowance to €3,000,000
- Valenciana & Cataluña – reduced the individual allowance to €500,000
Solidarity tax rates and allowances cannot be adjusted by the regions. However. it only applies to those with net wealth above €3 million, and since the state individual and main home deductions apply here too, in reality it only impacts those with induvial wealth above €4 million.
A taxpayers’ combined solidarity, wealth and income tax liability cannot exceed 60% of the sum of the personal income taxable base. If it does, the tax liability will be reduced until the 60% threshold is reached (maximum reduction 80%).
Succession taxes
Madrid has created a 50% tax relief between siblings. Otherwise, for other regions, there are no changes to Spanish succession and gift tax rates or allowances for 2025 (as at 31 March 2025).
However, over recent years many regions have made this tax much for favourable when spouses and children inherit assets.
Andalucía – Spouses, descendants and ascendants benefit from both a 99% tax relief and a €1 million tax free allowance on inheritances (but not gifts).
Balearic Islands – spouses, children, grandchildren and parents do not pay any succession tax on inheritances and lifetime gifts. Other relatives may benefit from a 50% or 25% reduction if there is no immediate family.
Canary Islands – succession tax liability is reduced by 99.9% for inheritances received spouses, children, grandchildren, parents, siblings, nieces, nephews etc. Spouses, descendants and ascendants also benefit from this reduction on lifetime gifts.
Madrid – Spouses, descendants and ascendants benefit from a 99% reduction on both inheritances and gifts. Siblings, uncles/aunts, and nephews/nieces get a 50% tax relief.
Murcia – a 99% relief applies on inheritances and lifetime gifts received by spouses, descendants and ascendants.
Valenciana – spouses, children, grandchildren and parents benefit from a 99% reduction on both inheritances and gifts.
Take personalised, local advice to ensure your wealth management is set up to take full advantage of these regional allowances. Extra careful planning will be required if you wish to leave assets to other relatives or unmarried partners and stepchildren.
Spanish tax planning
Reviewing your wealth management and tax planning from time to time can prove rewarding. The way you hold your assets can make a significant difference to how much tax you have to pay, and as well as impact your estate planning.
Don’t let headline rates of tax discourage you from becoming resident in Spain. With specialist advice and strategic financial planning, you may be able to significantly improve your tax position.
Blevins Franks celebrates its 50th anniversary this year, with the company having been founded in 1975. We have built up a wealth of experience advising UK nationals on their Spanish tax planning and protecting their wealth. Our advisers are cross-border specialists, with deep knowledge of both the Spanish and UK tax regimes and how they interact. They will be happy to review your financial planning to ensure you are taking advantage of the tax planning opportunities living in Spain has to offer.
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