Wealth tax is often levied as an annual charge against the worldwide assets of affluent and high-net-worth expats – and is also commonly overlooked since there is no directly comparable tax in the UK or many countries.
Understanding how wealth tax is calculated, the threshold values of assets, investments and properties and what this might mean for your ongoing tax obligations is important, particularly if you are comparing various destinations or planning a relocation abroad.
Let us clarify which EU countries charge wealth taxes, to whom this applies, and why calculating your liabilities in advance is key to long-term financial planning.
Which European Countries Impose Wealth Taxes?
Wealth taxes are payable by wealthy residents in Spain, with comparable taxes in France and Portugal, although these only apply to property ownership rather than other assets. Belgium has a solidarity tax that can be perceived as a type of wealth tax, but this is restricted to securities accounts.
One of the many complexities is that, depending on where you live, you could be exposed to wealth tax even if you have a relatively modest income or are financing your retirement from pension savings – if you have a high-value property that exceeds the taxable wealth threshold.
Preparation, as always, is key. We’ve summarised below how each of these taxes works and the current thresholds and payable rates.
Wealth Taxes in Spain
Tax residents living in Spain may be required to pay an annual wealth tax based on their capital assets. Note that this tax system is based on assets such as investments, savings, vehicles, real estate and art rather than your income.
Like much of the Spanish tax system, wealth tax varies between regions. Some provinces have a higher tax-exempt value than others, and each autonomous community can set their own allowances and exemptions – the standard wealth tax rate varies from 0.2% to 3.5%.
Most tax residents are liable to pay wealth tax if their worldwide net assets less liabilities exceed €700,000. Non-residents are also expected to pay wealth tax if their assets within Spain exceed this threshold. However, they are always taxed according to the general tax rates.
Properties that act as primary residences are exempt up to €300,000, and married couples can combine this allowance.
Spanish Wealth Tax Rates
| Taxable Assets Above Threshold | Wealth Tax Rate |
| Up to €167,129 | 0.2% |
| €167,129 to €334,253 | 0.3% |
| €334,253 to €668,500 | 0.5% |
| €668,500 to €1.337 million | 0.9% |
| €1.337 million to €2.674 million | 1.3% |
| €2.674 million to €5.348 million | 1.7% |
| €5.348 million to €10.696 million | 2.1% |
| €10.696 million and above | 3.5% |
There is a cap on the maximum tax liabilities each individual is expected to pay, with income and wealth taxes combined restricted up to 60% of the individual’s taxable income.
Wealth Tax in France
France’s wealth tax system was reformed in 2018 and applies only to property assets based on worldwide real estate ownership of €1.3 million and above. Non-residents are only normally subject to this taxation if they own a property in France over the threshold.
This tax, the Impȏt sur la fortune Immobilière or IFI, is calculated on 1st January each year and applied to residential properties rather than commercially owned buildings.
While tax residents are subject to IFI on properties worth over €1.3 million, the tax itself is calculated against worldwide real estate assets from €800,000 and above, beginning at 0.5% and extending to 1.5% for those with portfolios worth over €10 million.
Some exclusions exist, depending on the taxpayer’s original country of residence and arrival date in France. Expats who relocated to France after 6th August 2008 and were categorised as non-residents for the previous five years are exempt from IFI for five years until the 31st December following the fifth year since their arrival.
Wealth tax in France differs from other jurisdictions in that it applies to households rather than individuals; therefore, if two spouses or partners are considered one household, all family-owned real estate assets will be assessed for wealth tax.
French Wealth Tax Rates
| Household Real Estate Ownership | Wealth Tax Rate |
| Up to €800,000 | 0% |
| €800,000 to €1.3 million | 0.5% |
| €1.3 million to €2.57 million | 0.7% |
| €2.57 million to €5 million | 1% |
| €5 million to €10 million | 1.25% |
| Over €10 million | 1.5% |
Wealth Taxation in Portugal
The Portuguese tax authorities do not levy a wealth tax, per se, but impose a property tax, which is often regarded as a similar form of taxation. The Adicional Imposto Municipal Sobre Imóveis (AIMI) is payable by any property owners – whether tax residents or non-residents – with real estate assets in Portugal worth €600,000 or more.
The tax calculation is based on the assessed value of the property or portfolio. Married couples can combine their tax-free allowances, meaning property ownership is exempt from AIMI up to €1.2 million.
This taxation has two brackets – the standard rate is 0.7% for individuals, increasing to 1% for real estate portfolios worth €1 million or above.
Wealth Taxes Payable in Belgium
Like Portugal, Belgium does not have a wide-scope wealth tax but levies a solidarity tax against taxpayers who hold securities accounts worth €1 million or more. Taxpayers are subject to a 0.15% tax rate on taxable assets.
Understanding Your Wealth Tax Liabilities as an Overseas Expat
Tax planning is essential to preparing for a relocation and ensuring you know how your income, assets and estate may be taxed in an overseas country. While wealth taxes are not uncommon, they can be complex, particularly for expats living overseas with properties in multiple countries.
Our teams in France, Portugal, Spain and Belgium are well-versed in local and municipal tax schemes and can provide tailored advice and suggestions to ensure your move is well-planned. Understanding alternative taxes, including gift taxes, income tax against pension benefits and tax liabilities linked with investment income, will ensure you have complete oversight.
Should you require further information about any of the tax regimes we have discussed here, the opportunities to structure your assets tax-efficiently, or calculating your long-term tax obligations in a European country, please get in touch with your nearest Chase Buchanan office at your convenience.
*Information correct as at February 2024