There’s an important tax update you should be aware of: the tax authority of the Valencian Community has doubled the tax-free threshold for the Wealth Tax (Impuesto sobre el Patrimonio), raising it from €1,000,000 to €2,000,000.
What has changed
Through Law 5/2026, of July 31, published on August 10, 2026, the Valencian Community has raised the Wealth Tax exemption threshold, effective for the 2026 tax year. This means the change will benefit residents of the Valencian Community when they prepare their Wealth Tax return in June 2027.
This is the second increase to the exemption threshold in under two years. The threshold rose from €500,000 to €1,000,000 in 2025, and now increases again from €1,000,000 to €2,000,000 for the 2026 tax year.
What this means in practice
If your net worth in Spain is below €2,000,000, you will owe nothing under the Wealth Tax in Valencia. If your net worth exceeds that amount, you will only be taxed on the portion above €2,000,000, according to Valencia’s own regional tax scale (with progressive rates ranging from 0.25% to 3.5%).
Why this matters for foreign residents in Valencia
For our clients who have already settled, or are planning to settle, anywhere in the Valencian Community, this change will significantly reduce the tax cost of maintaining residency in the region.
Foreign investors who already own, or are planning to acquire, property in the Valencian Community will also benefit from this increased exemption, since that property will not be taxed until their total net worth in Spain exceeds two million euros.
This increase in the exemption strengthens Valencia’s position as one of the most tax-friendly regions for residents with medium-to-high net worth, alongside other autonomous communities such as Madrid and Andalusia.
If you have questions about whether this change affects your filing obligations, please don’t hesitate to contact us to review your situation.
