Tax Planning in Spain 2025 – Tips and Changes

The Spanish tax laws can be confusing for newcomers. But with proper planning, financial benefits can be achieved. In 2025 there are several changes worth a closer look. In addition to nationwide rules, autonomous regions like the Balearic Islands offer additional adjustments to tax rates and allowances. It's worthwhile to review your tax strategy annually to ensure it reflects all new developments. In particular, families should take care not to incur unnecessary burdens on inheritances or transfers of assets. A local financial advisor can help you make the most of regional tax advantages.

Income Tax in Spain 2025

Income tax in Spain is divided into two categories: general income and capital income. From 2025, savings and capital income are subject to progressive tax rates of up to 30%. In the Balearic Islands, taxation of general income remains stable and ranges from 18.5% for low incomes up to 49.25% for higher incomes from €300,000 in annual earnings. It is always advisable to obtain regional advice, as autonomous communities can implement their own adjustments.

Wealth Tax and Solidarity Tax

Inheritance and Gift Tax

In the Balearic Islands, reforms introduced from 2023 allow spouses and direct relatives such as children to inherit or receive gifts completely tax-free. Other relatives benefit from reduced rates of up to 50%, depending on the relationship to the donor or deceased. If you plan to pass assets to people outside the immediate family, careful planning is required.

Strategic Tax Planning for Expats

Smart tax planning can help you significantly optimize your financial position in Spain. With a good local advisor you can develop strategies to reduce your tax burden while creating long-term financial security for your family. Even high tax rates are often manageable through clever investments or restructuring your income and assets.