Modelo 714 Wealth Tax: What Non-Residents with Property in Mallorca Need to Know

Modelo 714 Wealth Tax — The Short Answer

Spanish Wealth Tax (Impuesto sobre el Patrimonio) affects not only residents but also non-residents with assets in Spain — declared via Modelo 714. For many owners of a single holiday property, no Wealth Tax payment arises due to the high Balearic allowance of €3,000,000. Nevertheless, a Modelo 714 filing obligation can exist if the value of the assets to be declared in Spain exceeds €2,000,000 — even if no tax is ultimately due. This is precisely where mistakes regularly occur in practice, causing many non-residents to pay more tax than necessary.

What Is Wealth Tax and Who Is Affected?

Wealth Tax taxes an individual's net assets as of 31 December of a given year. Unlike Modelo 210 (income tax on property income), this concerns the asset holding itself, not ongoing income.

Key difference between residents and non-residents:

Status	Taxable base
Spanish tax residents (obligación personal)	Worldwide assets
Non-residents (obligación real)	Only assets located in Spain (e.g. Spanish property)

For most owners, this means: only the value of the Spanish property (and any other Spanish assets) counts — not assets in your home country.

Which Property Value Counts?

Property is not automatically valued at market value. Since the reform, the Catastro's Valor de Referencia is the relevant minimum value, where one exists. Only if no Valor de Referencia exists does the highest of the remaining tax values apply: cadastral value, an administratively determined/verified value, or acquisition value. Especially for high-value properties, the applicable value should therefore be established clearly before assessing Modelo 714.

When Do You Need to File Modelo 714?

A filing obligation generally exists if:

• Your gross assets located in Spain exceed €2,000,000 (regardless of whether tax is ultimately due), or
• Your tax liability is positive after applying allowances and deductions

This means: even if you end up owing no tax (because the allowance applies), a filing obligation can exist purely based on the level of gross assets. This is a common trap: if a Balearic property is worth, say, €2.5 million, Modelo 714 must be filed even though the €3 million allowance means €0 tax is ultimately due.

Allowances: Why Choosing the Right Regime Matters

Wealth Tax is a regionalised tax — each autonomous community sets its own allowances and, in some cases, its own tax rates. For non-residents, one point is particularly important and frequently leads to incorrect or excessive taxation in practice:

For non-residents: applying the regional (autonomous community) regime is an option that must be actively exercised on Modelo 714. Without an explicit election in the tax return, the state allowance of €700,000 applies automatically. Non-residents who own property in the Balearic Islands must explicitly tick box [3] and indicate the autonomous community in which the majority of their assets are located (box [8]) — only then does the Balearic allowance of €3,000,000 per person apply.

Regime	Allowance (Balearic property)	Requirement
State default regime	€700,000	Applied automatically if no option is selected
Balearic regional regime	€3,000,000 per person	Must be actively elected (boxes 3 + 8 on Modelo 714)

Allowance for married couples: For a couple with 50/50 ownership and no other relevant Spanish assets, Wealth Tax liability under Modelo 714 generally only arises once each person's proportional net asset value exceeds the €3,000,000 allowance. Arithmetically, for a 50/50 share, this corresponds to a total property value above €6,000,000. However, a filing obligation may arise earlier, once the value of the assets to be declared per person exceeds €2,000,000.

Important legal development (TEAC decision of 24 September 2025, RG 2959/2023): Non-residents from third countries (outside the EU/EEA — e.g. UK, USA, Switzerland) were already entitled to choose the regional regime from tax year 2021 onwards (introduced by Ley 11/2021). For years before 2021, the Spanish tax administration continued to deny third-country residents this option — only EU/EEA residents had it since 2015 (Ley 26/2014). On 24 September 2025, the TEAC ruled that this unequal treatment also breached EU law for years before 2021, and that equal treatment must apply retroactively. TEAC decisions are binding on the tax administration but are not legislation and do not have the same status as a Supreme Court ruling.

Practical consequence: Non-residents tax-resident in third countries who were taxed under the less favourable state regime for years before 2021 — despite owning property in the Balearic Islands — may file a claim for correction of their self-assessment (rectificación de autoliquidación) for years not yet time-barred. For years from 2021 onwards, the option was already available.

Tax Rates

Wealth Tax is progressively tiered. In the Balearic Islands, the regional scale starts at 0.28% and reaches up to 3.45% on net assets above the allowance. The exact brackets should be verified with a local tax adviser before application, as regional rates can change.

The Supreme Court's Landmark Ruling (October/November 2025)

Alongside the TEAC decision on the regional regime, there is a second, independent legal development: Spain's Supreme Court (Tribunal Supremo) ruled in two judgments dated 29 October 2025 (ECLI:ES:TS:2025:4849) and 3 November 2025 (ECLI:ES:TS:2025:4846) that excluding non-residents from the so-called "Límite Conjunto" (combined income tax/wealth tax cap) is not justified. The AEAT has adopted this position in its 2025 Manual Práctico de Patrimonio and applies the cap to taxpayers under obligación real (non-residents) as well.

What does this mean in practice?

Article 31 of the Spanish Wealth Tax Act caps the combined tax burden from income tax and Wealth Tax at 60% of the income tax taxable base. If this threshold is exceeded, Wealth Tax liability can be reduced accordingly, up to a maximum reduction of 80%.

Important: For non-residents, the practical application should be reviewed individually — particularly which foreign income tax and comparable taxable base should be included in the 60% calculation, and how this can be evidenced. The calculation may differ depending on whether the taxpayer has own-use income, rental income, or other sources. The AEAT generally accepts the application of the Límite Conjunto to non-residents but notes that the practical calculation must be assessed case by case.

What Does This Mean in Practice for Owners?

• Most owners of a single holiday property in Mallorca remain below the allowances and are not affected — provided the regional regime is correctly elected
• For multiple or very high-value properties, Wealth Tax can become relevant — particularly if the Solidarity Tax on Large Fortunes (Modelo 718) also applies. This tax is structured at state level and, unlike Modelo 714, is not regionalised. The Balearic regional regime is not simply applied there as a separate regional allowance; possible interactions with regular Wealth Tax should be reviewed separately
• Two independent legal developments from 2025 potentially open the door to refund claims: the TEAC decision on the regional regime (for third-country non-residents, years before 2021) and the Supreme Court ruling on the "Límite Conjunto"
• Modelo 714 is independent of Modelo 210 — both declarations may be required in parallel depending on asset levels

Deadlines

Modelo 714 is filed annually between April and 30 June of the following year — alongside the Spanish income tax season. For tax year 2025, the filing period runs from 8 April to 30 June 2026; for payment by direct debit (Domiciliación), it ends on 25 June 2026. In other years, the specific start and direct debit dates may vary slightly.

Common Confusions and Mistakes

Modelo 714 vs. Modelo 720: Modelo 720 is the foreign asset reporting obligation for Spanish tax residents — it generally does not apply to non-residents. Modelo 714 is the standalone Wealth Tax return for assets located in Spain, which can also apply to non-residents.

Modelo 714 vs. Modelo 210: Modelo 210 taxes ongoing income (rental income or Renta imputada). Modelo 714 taxes the asset holding itself. Both are independent of each other and can apply in parallel.

Missing election of the regional regime: the most common and costly mistake in practice — if the regional regime is not explicitly elected, the less favourable state default regime with a significantly lower allowance applies automatically.

FAQ

Do I automatically owe Wealth Tax as the owner of a holiday apartment in Mallorca? No. Due to the high Balearic allowance (€3,000,000 per person), most owners of a single holiday property remain below the tax threshold — provided the regional regime is correctly elected in the return.

I am tax-resident in the UK, Switzerland, or the USA and own a property in Mallorca — do I automatically get the high Balearic allowance? Not automatically. The regional regime with the higher allowance must be actively elected on Modelo 714 (boxes 3 + 8). The option for third-country residents has existed since tax year 2021 (Ley 11/2021). The TEAC decision of September 2025 specifically concerns years before 2021, for which this option had previously been denied.

What is the difference between Modelo 714 and the Solidarity Tax (Modelo 718)? Modelo 714 is the regular, regionalised Wealth Tax. Modelo 718 is an additional state tax for very high net worth (from approx. €3,000,000 net), which can apply in parallel, particularly in regions with low regional Wealth Tax.

Can I benefit from the new rulings as a non-resident, even if I'm not from the EU? Yes, potentially from both 2025 legal developments: the TEAC decision on the regional regime explicitly applies to third-country residents as well (for years before 2021), and the Supreme Court has also extended the "Límite Conjunto" to non-residents in principle. The practical application in individual cases should be reviewed separately.

What do I do if I've overpaid Wealth Tax in recent years? Both current legal developments potentially open the door to refund claims via an application to correct the self-assessment (rectificación de autoliquidación) — particularly for years before 2021, if the regional regime was denied at the time. The limitation period is generally four years from the end of the relevant filing deadline. Fiscaro recommends individual advice from a tax adviser specialising in Wealth Tax.

Is Wealth Tax the same as the annual Modelo 210? No. Modelo 210 concerns ongoing property income and is relevant to practically all non-residents with Spanish property. Modelo 714 only concerns owners with assets above the relevant regional allowances.

Sources

• Ley 19/1991 (Spanish Wealth Tax Act), Fourth Additional Provision
• Ley 26/2014 (introduced regional regime option for EU/EEA residents from 2015)
• Ley 11/2021 (introduced regional regime option for third-country residents from 2021)
• TEAC, Resolution of 24.09.2025, RG 2959/2023
• Supreme Court, ruling of 29.10.2025, ECLI:ES:TS:2025:4849
• Supreme Court, ruling of 03.11.2025, ECLI:ES:TS:2025:4846
• Agencia Tributaria: Manual Práctico de Patrimonio 2025 — taxpayers under obligación real
• ATIB: Balearic allowance of €3,000,000 (Decreto-ley 5/2023)

Conclusion

For many owners of a holiday property in Mallorca, Wealth Tax remains irrelevant due to the high Balearic allowance of €3,000,000 per person — for married couples with 50/50 ownership, generally only significantly later. For higher property values or multiple properties, however, a closer look is worthwhile, particularly regarding whether the regional regime was correctly elected. Two important legal developments from autumn 2025 have significantly improved the legal position of non-residents and can, in certain cases, open the door to refund claims.

For Wealth Tax review, we recommend consulting a specialised tax adviser. For your ongoing Modelo 210 declaration, Fiscaro is here to help.

→ Calculate your Modelo 210 tax now