Taxes and fiscality
Last updated on 21.05.2026Recently, the Spanish Supreme Court (Tribunal Supremo, TS) issued two important rulings (29 October and 3 November 2025), confirming that non-residents in Spain may benefit from the “límite conjunto” (combined limit) between Wealth Tax (IP – Impuesto sobre el Patrimonio) and Income Tax (IRPF). This eliminates a discriminatory element that until now resulted in non-residents being taxed disproportionately.
These rulings have major implications for people who live outside Spain but hold assets in the country, such as real estate. In this blog, I explain what exactly has changed, what the practical impact is, and I answer the most important questions (FAQ).
What exactly does the ruling say?
1. 60% combined tax limit (“límite conjunto”)
According to Article 31.1 of the Wealth Tax Law (Ley 19/1991), the sum of IRPF + IP cannot exceed 60% of your relevant taxable income.
2. Maximum reduction of IP
If this limit is exceeded, Wealth Tax may be reduced by up to 80% of the original IP tax due.
3. Application to non-residents
Until now, this limit was effectively only granted to Spanish tax residents (“obligación personal”).
With the new rulings, the TS confirms that non-residents who pay Wealth Tax on assets located in Spain (“obligación real”) have the same right to this limit.
4. Legal basis
The Court states that excluding non-residents is discriminatory and violates:
EU law (free movement of capital), and
constitutional principles of equality and the non-confiscatory nature of taxation.
5. Consequences for the Tax Authority (Hacienda)
The decision is a setback for the Spanish tax administration, which always argued that the limit applied only to residents. The Court rejects this interpretation and confirms that the differential regime is unjustified.
Practical impact for non-residents with assets in Spain
• Lower Wealth Tax:
Non-residents owning property or other assets in Spain can significantly reduce their Wealth Tax (IP), especially if their income (in their home country) is relatively low.
• Equal treatment:
The ruling ensures fiscal equality between residents and non-residents, which is particularly relevant for foreigners who own real estate in Spain.
• Possible refunds:
Individuals who paid Wealth Tax in previous years without applying this limit may be able to request corrections or refunds (subject to statutory deadlines and personal circumstances).
• Importance of tax planning:
Given the change, reviewing your Spanish tax position with a tax advisor or lawyer is now more important than ever. Proper planning can lead to substantial savings.
FAQ – Most Frequent Questions About the Ruling
1. What exactly is the “límite conjunto” in Spanish Wealth Tax?
It means that the combined burden of IRPF and IP cannot exceed 60% of your relevant income.
2. Why did this limit not apply to non-residents before?
Technically, the LIP only applied the limit to residents (“obligación personal”). Non-residents were excluded.
3. What has the Supreme Court decided?
That non-residents are entitled to the same tax limit, because excluding them is discriminatory and violates EU rights and constitutional principles.
4. To which non-residents does the ruling apply?
To non-residents who pay Wealth Tax on assets located in Spain (“obligación real”).
5. How much can I save on Wealth Tax?
Depending on your income, the IP payment can be reduced by up to 80% if the combined IRPF + IP would exceed the 60% cap.
6. Do I need to take any steps to apply this ruling in my tax return?
Yes. You may need to revise your Wealth Tax return, file an objection, or request a correction with Hacienda—ideally with help from a Spanish tax advisor.
7. Does this ruling apply retroactively?
This depends on your specific case and the statutory deadlines. A Spanish tax lawyer can determine whether a correction or refund is possible.
8. Does the ruling affect other taxes?
No. The ruling specifically concerns the IRPF + IP “combined limit.” Other taxes remain unchanged.
9. Is the ruling relevant for both EU and non-EU citizens?
Yes. The ruling is based on EU free movement of capital.
For non-EU citizens, applicability may depend on tax treaties or information exchange agreements.
10. What should I do now?
Have your tax situation reviewed by a Spanish advisor.
Check past Wealth Tax returns for potential refunds.
Optimise your tax planning in light of the ruling.
Conclusion
The recent rulings of the Spanish Supreme Court are highly favourable for non-residents paying Wealth Tax in Spain. They affirm that non-residents have the same right to the tax limit previously available only to residents. This may lead to substantial savings but requires action: tax review, possible objections, and updated tax planning.