The filing period for the Temporary Solidarity Tax on Large Fortunes for the 2025 tax year is now open. The return must be filed using Form 718 between 1 and 31 July 2026. Where the taxpayer chooses to pay by direct debit, the deadline is 28 July.
Although the tax applies to net wealth exceeding €3 million, exceeding that threshold does not automatically mean that an amount will be payable. To determine the final position, it is necessary to value assets and rights correctly, apply the relevant exemptions and coordinate the result with Wealth Tax.
This year, Form 718 also includes a particularly relevant change for non-resident taxpayers and for those taxed in Spain under limited tax liability.
What is the Temporary Solidarity Tax on Large Fortunes?
The Temporary Solidarity Tax on Large Fortunes, known in Spanish as the ITSGF, is a state-level, direct tax that complements Wealth Tax. It applies to the net wealth of individuals when it exceeds €3 million.
It was introduced at the end of 2022 as an initially temporary measure. However, its application has been extended until wealth taxation is reviewed as part of the reform of Spain’s regional financing system. It therefore remains in force for the 2025 tax year.
The tax accrues on 31 December each year. The return filed in July 2026 must therefore analyse the composition and value of the taxpayer’s wealth as at 31 December 2025.
Who is required to file Form 718?
The tax applies only to individuals. Companies and other legal entities are not taxpayers for ITSGF purposes, although the value of shares or interests held by an individual in those entities may form part of their wealth.
In general terms, the following individuals may be subject to the tax:
· Spanish tax residents, in respect of all their assets and rights, regardless of the country in which they are located.
· Non-residents, in respect of assets and rights located, exercisable or enforceable in Spain.
· Certain taxpayers who apply the special tax regime for workers, professionals, entrepreneurs and investors relocating to Spain, who are taxed under limited tax liability for Wealth Tax purposes and, by extension, for ITSGF purposes.
The return is always individual. There is no joint return for this tax. In marriages subject to the community property regime, each spouse must include the portion of the assets and rights corresponding to them under the applicable ownership rules.
However, Form 718 only needs to be filed where net wealth exceeds €3 million and the resulting tax liability, after applying the relevant deductions and allowances, is positive. If the final liability is zero, it will not be necessary to file a return for this tax.
How is the Large Fortunes Tax calculated?
The starting point is the taxpayer’s net wealth: the value of their assets and rights, less any charges, encumbrances, debts and obligations that may be deducted under the applicable rules.
As a general rule, the valuation rules and exemptions provided for Wealth Tax apply. This requires an individual review of real estate, bank accounts, investments, shares or interests in companies, insurance policies, vehicles, works of art and other assets.
A tax-free allowance of €700,000 applies to the taxable base. In addition, the taxpayer’s main residence may be exempt up to a maximum amount of €300,000, provided that the property meets the legal requirements to qualify as such.
The tax scale is progressive. The first €3 million of the taxable base is taxed at 0%. Above that amount, rates of 1.7%, 2.1% and, for the highest brackets, 3.5% apply.
The resulting liability may be reduced, among other items, by the Wealth Tax effectively paid. In this way, the ITSGF operates as a complementary tax and not as an automatic duplication of Wealth Tax.
The importance of valuing assets correctly
A significant part of the work before filing consists of checking whether the values included in previous returns remain correct.
In the case of real estate, for example, the reference value must be the highest of the cadastral value, the value determined or verified by the tax authorities for other tax purposes, and the price, consideration or acquisition value. The existence of a cadastral reference value may have relevant effects on this calculation.
Bank balances, investment portfolios, interests in unlisted companies, rights in rem, outstanding loans and the effective ownership of each asset as at 31 December 2025 should also be reviewed.
An apparently minor difference in the valuation or attribution of an asset may affect the taxable base, the application of an exemption or the final outcome of the return.
Business assets and family businesses: two exemptions that require detailed analysis
For business owners, professionals and shareholders in family businesses, one of the most relevant issues is to check whether certain assets or company interests may qualify for the exemptions provided under Wealth Tax, which also apply to the ITSGF.
Assets and rights used in a business or professional activity may be exempt where the activity is carried out on a regular, personal and direct basis and constitutes the taxpayer’s main source of income. As a general rule, this main source of income is considered to exist where at least 50% of the taxpayer’s general and savings taxable base for Personal Income Tax purposes comes from that activity.
Shares or interests in a family business may also benefit from the exemption, but merely being a shareholder in a company is not enough. Among other requirements, the entity must carry out a genuine economic activity; the holding must be at least 5% individually or 20% together with certain family members; and effective management functions must be performed, with remuneration exceeding 50% of the taxpayer’s income from employment and economic activities.
In addition, the exemption does not necessarily apply automatically to the full value of the company. Where there are assets not used in the economic activity, the exempt portion must be calculated in proportion to the value of the assets actually linked to the business.
For this reason, it is advisable to review the company structure, the nature of its assets, management functions, remuneration and the documentation that can evidence compliance with the requirements.
The main change in 2026: the tax liability limit for non-residents
Order HAC/652/2026 has amended Form 718 applicable to the 2025 tax year to incorporate a relevant change in the treatment of taxpayers subject to limited tax liability.
Until now, the form limited the application of the full tax liability cap to taxpayers subject to unlimited tax liability. However, several Supreme Court judgments relating to Wealth Tax found it discriminatory that non-residents were unable to apply this limit. The Central Economic-Administrative Tribunal subsequently extended this criterion to the Temporary Solidarity Tax on Large Fortunes.
As a result, the new Form 718 allows the full tax liability cap to be applied both by taxpayers subject to unlimited tax liability and by those taxed under limited tax liability.
This change may be particularly relevant for non-residents who own real estate, company interests or other assets in Spain, as well as for taxpayers applying the special inbound expatriate regime. It does not necessarily lead to a reduction in every case, but it does make it necessary to review the calculation using the new form before filing the return.
What should be reviewed before filing Form 718?
Before preparing the self-assessment, it is advisable to draw up a complete inventory of the wealth held as at 31 December 2025, distinguishing between assets located in Spain and assets and rights located abroad, their ownership and the applicable valuation rules.
It is also necessary to check which debts may be deducted, whether the main residence meets the requirements for the exemption, which assets are actually used in an economic activity and whether business interests meet all the required conditions.
Where wealth has an international dimension, it is also important to analyse tax residence, applicable tax treaties, the location of assets and the possible obligation to appoint a representative in Spain.
Finally, the calculation must be coordinated with Wealth Tax, taking into account the tax effectively paid, the joint limit and the new possibility for taxpayers subject to limited tax liability to apply that limit.
Deadline and filing method for Form 718
Form 718 for the 2025 tax year must be filed between 1 and 31 July 2026.
Filing is exclusively electronic and may be carried out using an electronic certificate or through the Cl@ve system. Where the return results in an amount payable and the taxpayer chooses to pay by direct debit, the return must be filed by 28 July 2026 at the latest, and the payment will be debited on 31 July.
Given the complexity of the valuation rules and exemptions, it is not advisable to limit the review to completing the form. The return should be based on a prior analysis of the composition of the taxpayer’s wealth, their family and corporate situation and, where relevant, their international circumstances.
Tax and wealth advice at Certus Legal Firm
At Certus Legal Firm, we advise residents and non-residents on the analysis and filing of the Temporary Solidarity Tax on Large Fortunes.
Our work includes reviewing the obligation to file, valuing assets and rights, applying exemptions, analysing business interests and family business structures, coordinating the calculation with Wealth Tax and reviewing international situations or cases involving the special inbound expatriate regime.
An individual review makes it possible to determine not only how to file Form 718 correctly, but also which elements of the wealth structure should be taken into account to avoid future tax contingencies.
Frequently asked questions about the Large Fortunes Tax
Who must file Form 718 in 2026?
Individuals whose net wealth exceeds €3 million and whose tax liability, after applying the relevant deductions and allowances, results in an amount payable.
What is the deadline for filing the Large Fortunes Tax?
The return for the 2025 tax year may be filed between 1 and 31 July 2026. The deadline is 28 July where the taxpayer chooses to pay by direct debit.
Is the main residence exempt?
The main residence may be exempt up to a maximum amount of €300,000, provided that the property meets the necessary requirements to qualify as the taxpayer’s main residence.
Is a family business exempt from the tax?
Shares or interests may be fully or partially exempt where the entity carries out an economic activity, the minimum holding percentages are met and effective, remunerated management functions are performed. The exemption must be analysed according to the actual composition of the company’s assets.
Do non-residents have to file Form 718?
They may be required to file where they own assets or rights located or exercisable in Spain and the resulting tax liability is positive. From the form corresponding to the 2025 tax year onwards, they may also apply the full tax liability cap provided for this tax.
Informative note: this content is general in nature and does not replace tax advice tailored to the specific circumstances of each taxpayer.
