My mother is becoming a Spanish resident. What taxes is she liable for?

My mother in law moved to Spain when she retired. She plans to stay there and has become a resident. She is Spanish but lived in the UK for 40 years and then went back to Spain when she retired. At present we complete her UK tax returns each year to pay her taxes. We are struggling to find out information regarding Spanish wealth tax, inheritance tax and other taxes that she may need to pay now that she is resident in Spain. We get contradicting information. One place said that wealth tax has been abolished and one said it hadn't. She has UK pensions and property and not so many assests in Spain. I know that we can complete a double taxation form to allow Spain and England to decide which country she should pay her taxes. However, we feel that the decision would be to Spain and that she would end up having to pay out so much more in taxes i.e. wealth tax, inheritance tax and other taxes on income etc... We have tried the Spanish embassy and others but no one actually seems to know. We would be very grateful for you time and help

Dear Madam,

Let me just clarify, without sounding pedantic, that taking up residency and becoming a fiscal resident in Spain are two different legal concepts which you seem to be using indistinctly.

Whether your agree to it or not, on spending more than 183 days in Spanish territory in any given year you become fiscal resident in Spain for Spanish tax purposes. Meaning your worldwide income is taxable and falls within the reach of the Spanish Tax man (!). It also has it's advantages such as on selling property you will waive a retention of 3% on account of your CGT liability.

1.- Technically Wealth tax hasn’t been abolished, it has been put on hold. For practical purposes this translates as if it had been abolished as there’s no longer a need to pay for it. That’s why you will read it has been “abolished� as from the 1st of January 2008 although this term strictly speaking is incorrect. Perhaps "surpressed" would be a more appropriate form to describe it.

You can read further in our blogs and articles (just click on the blue links below):

Property Wealth Tax, at last Suppressed -10th September 2008

2.- As for Spain’s always overrated Inheritance tax you may want to read my article on the matter which has useful links to other related articles on Spanish inheritance matters:


Spanish Inheritance Tax: Advantages of Making a Will in Spain – 3rd September 2009


3.- Regarding the taxes your mother-in-law is liable for on owning Spanish property they would be as follows:

Yearly Taxes and Fees on Property Ownership - 4th of January 2000

As I advise in my next article, it is advisable she sets as a standing order against your Spanish bank account (utility companies do not accept as standing orders overseas accounts btw) all the following:

• IBI tax. Paid once a year (akin to UK’s Council tax).
• Garbage collection. Paid twice or once a year depending on the Town Hall.
• Utility bills (invoiced quarterly in the case of water and monthly with electricity)
• Community Fees (only if you’ve purchased in a Commonhold). Usually quarterly but can vary.


If you still have queries after reading all the above, come back to me and I will gladly explain further.

I take the opportunity to offer her our Fiscal Representative Service which takes away all the hassle of calculating and filing annual tax retruns such as imputed property income tax.

Fiscal Representation

Yours faithfully,
Raymundo LarraÃ*n Nesbitt