Andalusia's 100% Wealth Tax Bonus: How to Leverage It in 2026 Without Triggering the Solidarity Tax

The Wealth Tax (IP) is a state tax ceded to the regional governments. Each region may approve bonuses on the autonomous quota, which has caused notable disparity: Catalonia reaches 3.48% for high brackets, while Madrid and Andalusia apply a 100% bonus, leaving the quota at zero.

Article 25 of the Consolidated Text of Provisions on Ceded Taxes of Andalusia (Legislative Decree 1/2018, modified by Decree-Law 7/2022) establishes the 100% bonus on the autonomous gross quota for all Andalusian tax residents. The regulation sets no upper limit: it applies equally to wealth of 2 million or 100 million euros.

For non-residents with assets in Andalusia, the situation differs. They are taxed only on assets located in Spanish territory under limited bonus options. This difference particularly incentivises converting an NLV into Andalusian tax residency once real estate wealth has been consolidated.

The Spanish Government passed in 2022 the Temporary Solidarity Tax on Large Fortunes (Law 38/2022), applicable to net wealth above €3 million with rates of 1.7% to 3.5%. Its philosophy was precisely to neutralise regional bonuses like the Andalusian one. However, the regulation includes a deduction for amounts already paid under IP, so in practice it only taxes the difference.

Although Andalusia maintains the 100% bonus, the state-level ITSGF does tax the Andalusian resident from €3M, but at significantly lower rates and with a more generous tax base: €3M exempt minimum (vs €700,000 of the state IP base), additional €700,000 exemption for primary residence, and exclusion of family businesses and corporate holdings meeting the requirements.

For net wealth of €8M, an Andalusian resident will pay approximately €35,000/year under ITSGF —considerably lower than the €158,000 the same wealth would pay in Catalonia or Valencia. This gap alone justifies fiscal relocation to Andalusia in many cases.

First, consolidate Andalusian tax residency. This requires staying more than 183 days per year in Andalusia, or demonstrating that the centre of vital economic interests resides in the region. Documenting the move (municipal registration, IRPF tax return, banking ties, children's schooling) is critical in case of a future tax inspection by AEAT.

Second, identify ITSGF-exempt assets. The primary residence (up to €700,000), shareholdings in family businesses meeting Article 4.Eight LIP requirements, and pension plans enjoy specific exemption. Correct portfolio classification can exclude between 30% and 50% of computable wealth.

Third, evaluate the convenience of Spanish holding companies. Interposing a Spanish patrimonial company between the resident and foreign assets may generate additional ITSGF deductions if business shareholding rules are met. This option requires case-by-case analysis and planning at least one tax year in advance.