How Spain's wealth tax keeps billionaires without driving them away.
Spain is one of the few countries collecting a wealth tax on the super-rich, and its approach offers important lessons for other nations considering similar measures. Introduced in 1978, Spain’s wealth tax targets individuals with assets over €3 million, with rates ranging from 1.7% up to 3.5% for fortunes above €10 million. The tax applies to worldwide assets but includes exemptions: the first €700,000 and €300,000 for a primary residence are excluded, and combined income and wealth taxes cannot exceed 60% of income to protect asset-rich but cash-poor taxpayers.
Regional governments can reduce or even eliminate their wealth tax rates to attract wealthy residents (Madrid and Andalucía have done this) causing some local revenue loss. To counter this, the central government introduced a “solidarity tax” in 2022 that collects revenue lost by regions, ensuring a steady overall tax intake. In 2023 and 2024, the combined wealth tax revenues reached about €2 billion, supporting public services like healthcare without stalling economic growth.
Despite fears, Spain has not seen billionaires flee. In fact, the number of Spanish billionaires increased from 26 in 2021 to 34 in 2024, with families like Zara founder Amancio Ortega continuing to invest heavily in property and businesses. Experts say the tax encourages fairer wealth distribution and reduces excessive political influence by the ultra-rich.
However, some large exemptions, especially for “family companies,” reduce tax revenue and complicate the picture. While these exemptions protect many family-owned businesses, they also allow the richest to shelter assets.
Spain’s model shows that carefully designed wealth taxes can raise funds, promote fairness, and keep billionaires investing domestically - valuable insights for countries like the UK debating new levies on the super-rich.
Regional governments can reduce or even eliminate their wealth tax rates to attract wealthy residents (Madrid and Andalucía have done this) causing some local revenue loss. To counter this, the central government introduced a “solidarity tax” in 2022 that collects revenue lost by regions, ensuring a steady overall tax intake. In 2023 and 2024, the combined wealth tax revenues reached about €2 billion, supporting public services like healthcare without stalling economic growth.
Despite fears, Spain has not seen billionaires flee. In fact, the number of Spanish billionaires increased from 26 in 2021 to 34 in 2024, with families like Zara founder Amancio Ortega continuing to invest heavily in property and businesses. Experts say the tax encourages fairer wealth distribution and reduces excessive political influence by the ultra-rich.
However, some large exemptions, especially for “family companies,” reduce tax revenue and complicate the picture. While these exemptions protect many family-owned businesses, they also allow the richest to shelter assets.
Spain’s model shows that carefully designed wealth taxes can raise funds, promote fairness, and keep billionaires investing domestically - valuable insights for countries like the UK debating new levies on the super-rich.
