Please see below the latest financial update from Blevins Franks
Please do not hesitate to contact Paul should you have any questions related to this or other financial matters.
https://www.blevinsfranks.com/spanish-tax-in-2025/
Spanish tax in 2025
By Paul Montague, Partner, Blevins Franks
928 433 411 | canaryisles@blevinsfranks.com | www.blevinsfranks.com
The Spanish tax regime is quite different from the UK’s and can be complicated. When moving to and living in the Canary Islands, 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 the Canary Islands, Spain as a whole 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.
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.
The Canary Islands income tax rates for 2025 start at 18.5% for income up to €12,450, rising to 50.5% for income over €300,000.
Succession tax
Over recent years many regions have made this tax much for favourable when spouses and children inherit assets.
Here in the Canary Isles, the 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.
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.
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.
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 individual 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%).
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.
Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com.
Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.
Blevins Franks Wealth Management Limited (BFWML) is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists. Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of trusts, retirement schemes and companies. This promotion has been approved and issued by BFWML.
