Wealth tax in Menorca: who pays it and from what amount

In the Balearic Islands, wealth tax is only payable by those whose net wealth exceeds €3,000,000, an exempt threshold far above the €700,000 set by Spanish state rules as a general default. For most owners of a property in Menorca, this means there is no tax to pay, although in some cases a return must still be filed.

What is Spain's wealth tax and who does it affect?

It is an annual tax on the net wealth of individuals as at 31 December each year. Companies and other legal entities are not subject to it: only individuals pay.

• Spanish tax residents: taxed on a personal basis, meaning on their worldwide wealth
• Non-residents: taxed on a real basis, only on assets and rights located in Spanish territory (typically, the Menorca property)

Net wealth is calculated by deducting allowable debts from the value of the assets, including any outstanding mortgage on the property.

What is the exempt threshold in the Balearics?

Since 1 January 2024, the exempt threshold in the Balearic Islands is €3,000,000 per person, set by regional Law 12/2023 on the autonomous community's budget. That figure is considerably higher than the €700,000 default under state rules.

On top of this, the main residence is exempt up to a value of €300,000 per taxpayer.

It's worth remembering the threshold applies per taxpayer: a property bought 50/50 by two people is split between them, which in practice doubles the threshold applying to that property.

How is a Menorca property valued for this tax?

The property is declared at the highest of these three values, under article 10 of Law 19/1991:

1. The cadastral value shown on the IBI receipt for the relevant year
2. The value determined or verified by the tax authorities for other taxes (for example, the Cadastre's reference value where it was used as the taxable base for ITP transfer tax or inheritance and gift tax)
3. The purchase price or acquisition value, including the costs and taxes inherent to the purchase (notary, land registry, ITP or VAT)

Since cadastral values are usually below market price, for recent purchases the figure that drives the return is almost always the acquisition price.

Do non-resident owners have to file in Menorca?

Yes, if the value of their Spanish assets reaches the filing thresholds — though they may opt to apply the Balearic regional rules. A ruling by Spain's Central Economic-Administrative Court (TEAC) of 24 September 2025 confirmed that this option is also available to residents outside the European Union and the European Economic Area, not just EU residents as was previously the case.

In practice, a non-resident owner able to apply the Balearic €3,000,000 threshold will have a regional liability of zero if their net wealth in Spain falls below that figure.

When is form 714 required?

A return must be filed in two situations: when tax is due, or when the gross value of assets and rights exceeds €2,000,000, even if nothing is payable. In the second case, the return is filed showing a zero liability.

Form 714 is submitted to the Spanish tax agency within the same window as the annual income tax return, between April and June of the year following the tax year being declared.

What is the solidarity tax on large fortunes?

It is a complementary state tax, created by Law 38/2022, on net wealth above €3,000,000, with rates from 1.7% to 3.5%. Regions cannot grant credits against it, but wealth tax already paid is deductible from it, so full double taxation does not arise. It applies both to residents (on worldwide wealth) and non-residents (on wealth located in Spain).

Frequently asked questions

Do I pay wealth tax simply for owning a house in Menorca?

Only if your taxable net wealth exceeds the applicable exempt threshold, which in the Balearics has been €3,000,000 per person since 2024.

Does a mortgage reduce the taxable base?

Yes. The tax applies to net wealth, so allowable debts, including any outstanding mortgage on the property, are deducted from the value of the assets.

What property value should be declared?

The highest of three: the cadastral value, the value determined or verified by the tax authorities for other taxes, and the purchase price or acquisition value including its costs and taxes.

Is a property bought through a company taxed?

Legal entities are not subject to wealth tax; what is taxed, where applicable, is the individual's shareholding in that company, under the relevant valuation rules.

When is the return filed?

Between April and June of the year following the tax year declared, using form 714, within the same window as the income tax return.

Understanding the tax side of ownership helps you plan a purchase in Menorca realistically, particularly for higher-value transactions or those with several owners. The information in this article is general in nature: each situation should be reviewed with a tax adviser. At Fincas Venalis we support buyers and sellers throughout the sales process on the island, and point you toward what's worth checking in each case.

Discover more properties for sale in Menorca at venalismenorca.com.