Under Valencian Law 5/2026, enacted on 31 July 2026, the tax-free allowance for Wealth Tax in the Valencian Community has doubled from €1 million to €2 million. This means that, for taxpayers who are tax residents in the Valencian Community—which includes the provinces of Castellón, Valencia and Alicante—the first €2 million of net wealth is exempt from Wealth Tax. Please note that this provision applies only to tax residents.
The new €2 million threshold applies from the 2026 tax year and will therefore affect the Wealth Tax return filed in 2027.
In practical terms, a person with net wealth of, for example, €1.8 million would fall below the new tax-free threshold and would not have to pay Wealth Tax in the Valencian Community.
If net wealth exceeds €2 million, the amount subject to tax will depend on the applicable rules, including any exemptions and deductions. However, the tax-free allowance and the obligation to file a tax return are not the same thing. Under the applicable Spanish state rules, a taxpayer may still be required to file a Wealth Tax return if the total value of their assets and rights exceeds €2 million, even if no tax is ultimately payable.
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